Effective March 1, 2022, prices for Microsoft products are increasing for the first time in many years. Microsoft is also implementing a new licensing model called New Commerce Experience (NCE), which they feel will simplify things in the long run. However, in the short term, NCE has caused substantial concerns particularly with Cloud Service Provider (CSP) partners, such as Total Networks.
CSPs have historically been the most flexible way to purchase from Microsoft because we offer month-to-month terms at the same price as annual agreements. This is changing with NCE. Microsoft will begin charging a 20% premium for month-to-month terms on top of the other increases from Microsoft. As one might imagine, Microsoft has seen tremendous push back from CSPs. Microsoft responded to the criticisms with some changes. As a CSP partner, it seemed like we got different answers daily.
However, at this point it seems clear that Microsoft will require an annual purchase commitment to get the best pricing, though you may continue to pay monthly. You can increase the number of licenses, but you may never decrease the number during the term. You can supplement your annual agreement with month-to-month subscriptions, if desired, at a 20% premium.
Annual term agreements (where you may still pay monthly) also changes how transitions between IT partners will work. When changing IT partners, the common current practice is to also change the entire Microsoft partner relationship. This will no longer happen. For annual purchases, you will remain “married” to the old IT partner for the remainder of the agreement for billing purposes only. Operationally, nothing changes. You can continue to “hand the keys” of your Microsoft account to the new IT partner and lock out the old IT.
In sifting through these changes, there appears to be a limited time deal if you act IMMEDIATELY (depending on your unique situation). Per discussions with our Microsoft distributor, we can lock in current pricing for one year if we act before March. On top of that, Microsoft has a limited time 5% discount promotion for us to do so. When I discovered this, it seemed too good to be true. But, as this article goes to print, I have received strong confirmation of this option. So, we will be offering our clients a limited time opportunity to delay the inevitable Microsoft price increases by one year by switching to an NCE annual agreement at 95% of what they are currently paying.
I am speaking from the perspective of a Microsoft CSP, which is how a great number of businesses get Microsoft products. Your situation and agreement with Microsoft may be different. If you have questions about this, or if you are interested in talking to us about your technology situation, please call 602-412-5025 for a complementary consultation.