As we first discussed back in August, Microsoft has been preparing partners and clients that price increases are coming in 2022. However, the new programs have been changing rapidly, sometimes multiple times a week, and news regarding the changes have been clear as mud. As some key changes appear on target for March, the news is starting to clear, though I’d estimate only as clear as skim milk at this point.
What we now know is that Microsoft’s goal with the New Commerce Experience (NCE) is to give clients as much flexibility as possible. However, when faced with so many options, it’s hard for business owners or decision makers to know how to best leverage the program. To date, many subscriptions have technically been annual agreements, but Microsoft has never really enforced them, allowing for subscription changes along the way. Starting with NCE, they will be enforced, so clients will have to choose between three subscription options:
1) Monthly Subscription – subscribers can change the number of licenses up and down month-to-month, but the flexibility comes with a premium of a 20% price increase.
2) Annual Subscription – the price will be locked in for 12 months, and while clients can add licenses to the subscription and have them co-terminate with the original licenses, if you choose to remove licenses, you will have to pay out the balance of the 12 month contract. This subscription can be invoiced either monthly or annually, but you have to choose before approving a quote.
3) 36-Month Subscription – price locks for the full 36-month term, but while you can add user count at any point during the term, you cannot remove licenses during the contract term. This can be billed monthly, annual, or upfront, but has to be selected prior to approving a quote. Any cancellation requires full payment of the complete 36-month term.
Currently Microsoft has yet to release skus to allow partners to begin quoting options to clients. However, it seems these will be the options available once released. Since most of our clients require flexibility more than anything else, we will be enrolling clients into the Monthly Subscription model by default once these options are released. If you want to consider Annual or 36-Month subscription options, please talk to a Suite3 rep to get you a proposal.