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Microsoft Customer Agreements for Microsoft 365 are changing

By Nick Potter, Director | Published 20 Oct 2021

Microsoft agreements for Microsoft 365 Business Basic, Microsoft 365 Business Premium, Office 365 E1, Office 365 E3, Office 365 E5, Microsoft 365 E3 are changing, simplifying the process and allowing us to better meet your needs.

What does this mean for me?

Up until now, your agreements for Microsoft 365 have been purchased on a either a monthly rolling basis or annually, per seat, with the ability to scale seats up and down when required on Microsoft’s Cloud Solution Provider (CSP) program.

From March 2022 this will change, with Microsoft encouraging customers to move to the New Commerce Experience (NCE) program. There will be two licencing choices:

  • You can move to an annual agreement, where pricing will remain unchanged and locked during the subscription period. You will be able to choose between 12 or 36 months.
  • You can still have a monthly agreement, however prices are subject to change, and are approximately 20% higher than yearly agreements.

The NCE allows you to pick ‘n’ mix between annual and monthly agreements, creating greater flexibility. For example if you know that you only need a licence for a few months, you can select a monthly agreement. However, if you determine that the team member will be around for longer you can turn that licence into an annual agreement, reducing your costs.

Here’s a quick overview of the New Commerce Experience options:

When is this happening?

August 2021

Microsoft announced changes were coming to the CSP licencing program

January 2022

We can begin to move customers over to the NCE, locking in prices for the length of their agreement

March 2022

There is an approximate 20% prices increase to the below licences:

  • Microsoft 365 Business Basic
  • Microsoft 365 Business Premium
  • Office 365 E1
  • Office 365 E3
  • Office 365 E5
  • Microsoft 365 E3

New seats will only be available via the NCE.


All renewals will be moved to NCE.

Key information about the new agreements

Cancellation policy

Under the CSP, you had up to 30 days to cancel your licences, this is being updated to 72 hours.

Refund policy

Refunds will be available BUT only up to 72 hours.  If you don’t cancel within 72 hours of your purchase you cannot cancel and you’re tied in for 12 months for the quantity of seats you have ordered. 

The good, the bad and the ugly

Like with any change there are pros and cons, so we have made a simple list of what the changes will mean for your business:

Pros

  • Fixed pricing on annual agreements (1 or 3 years)
  • You can scale up with additional users at a pro rata rate easily
  • Able to upgrade seats licencing easily, the old program required you to suspend and repurchase licences
  • You are able to pick ‘n’ mix agreement types, depending on your needs
  • At renewal we are able to schedule changes to the number of licences and types of licences, the old program did not allow this
  • On CSP you could only upgrade Business licences, under NCE you can upgrade to Business and Enterprise licences
  • Simplicity and standardisation in the licencing model

Cons

  • You are unable to scale seats down – you will still be liable to pay for that seat until the yearly term has ended
  • Once a new seat has been added you only have 72 hours to make changes
  • Month by month licenses are still available, but will cost around 20% more than annual agreements

These changes are still evolving, so this information is subject to change. If you want to discuss your options in more detail, please get in touch.


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