[Please note that we are receiving updates from our vendors and from Microsoft. I will endeavor to keep this up-to-date and date-stamp any changes. Search on the keyword “Revised” to see changes.]
Microsoft has started using a new subscription model called New Commerce Experience, or NCE, for several Microsoft 365 services. They made significant changes in this new subscription model. I’ve spent the last month or so attempting to understand the ins and out of this new model and demystify it for you. Brass tacks: I believe most Wooden Spoon clients will elect to remain on a monthly Microsoft 365 subscription that’s similar to the one they have today. I’ll explain why below.
Microsoft is also raising the price of its Microsoft 365 services for the first time in a decade. As you can read in this article from Microsoft, they have continually worked to improve Microsoft 365 so the price hikes are understandable. The price changes will affect business users of certain Microsoft services in 2022. No changes in education or consumer pricing have been announced. Again, I’ll summarize Microsoft’s changes and our recommendations below.
What is Microsoft New Commerce Experience?
New Commerce Experience, or NCE, is Microsoft’s attempt to standardize their licensing platform across their various products, including Microsoft 365 services. Microsoft 365 provides most clients’ email service, Microsoft Office licensing, and a variety of other services such as Teams, Planner, Visio, etc.
Here’s a very brief summary of the NCE-related changes to Microsoft 365 subscriptions that I think will be of interest to Wooden Spoon’s clients:
Option to keep using monthly subscriptions
- Most Wooden Spoon clients already have this kind of subscription and may continue to use moving forward.
- Monthly subscriptions offer clients the greatest amount of freedom and flexibility.
- Clients may add or remove licenses at any time.
- [Revised 2/17/2022] Monthly subscriptions will have a small price change on 3/1/2022, then another change on 7/1/2022 when the initial grace period expires.
Discounted options for 1 and 3-year subscriptions
- 1 and 3 year subscriptions lock in pricing for that term (and for licenses added during the term).
- Microsoft is offering a 5% discount off current (legacy) pricing for all 1 and 3-year subscriptions purchased by 2/28/2022.
- Clients may increase the license count or upgrade to a higher-priced product during the subscription term; they may not decrease the license count nor downgrade to a lower-priced product.
- Wooden Spoon will offer 1 and 3-year subscriptions on a paid-up-front basis only
As I mentioned above, I think that most of our clients will opt for the convenience, simplicity, and flexibility of monthly licensing. While the 1 and 3-year plans lock in current pricing for a longer term, those plans are significantly more restrictive when it comes to changing license counts. For those clients interested in annual pricing, I’m happy to have a conversation to determine if that’s the course of action that best matches the client’s business needs.
There are additional nuances to NCE that I have not covered here. I omitted them either because they don’t apply to or I don’t think would be of interest to the majority of Wooden Spoon’s clients.
What changes is Microsoft making to prices for Microsoft 365 services?
At the same time that Microsoft is rolling out NCE, they are also raising prices. The table below shows, to the best of our knowledge, the changes that will go into effect on March 1, 2022.
**Wooden Spoon is offering up-front payment terms for 1 and 3-year Microsoft 365 subscriptions purchased through Wooden Spoon.
How can you see which products are you currently using?
You can see the list of products you’re currently using on your most recent invoice. Please check your invoice for the following 2 sections (you may have 1 or both of them):
Agreement [your company name] – M365 And Related Services
Most of the products listed in this section of your invoice are likely to match closely the products listed in the previous section. Calculating your current spend should be relatively straightforward.
Agreement [your company name] – Hosted Exchange
The products listed in this section of your invoice have slightly different names than the products listed in the previous section. These are older Microsoft SKUs that will be converted to NCE SKUs by 3/1/2022. Please contact me if you’d like estimate of the charges under NCE pricing.
What action do you need to take?
If you want the flexibility of a monthly subscription, then no action is required. Wooden Spoon will convert your existing legacy subscription to a monthly NCE subscription. You will see new pricing starting with your March invoice. [Revised 2/17/2022: We previously believed existing monthly subscriptions would not be converted to NCE until 7/1/2022, but that’s not the case; they will convert on 3/1/2022 and the initial price change will go into effect on the same date.]
If you want to take advantage of discounted pricing and are OK with the constraints of a 1 or 3-year license, then you have two options:
- By 2/28/2022, you may convert to a 1 or 3 year subscription and enjoy 5% off the current (legacy) pricing.
- Starting 3/1/2022, you may convert to a 1 or 3 year subscription and enjoy 20% off the new monthly NCE pricing.
If you want to use option 1, please contact me ASAP so that our team can get your license converted by the deadline. Option 2 will be available at any time after 3/1/2022.
NCE Subscription Timeline