Microsoft New Commerce Experience (NCE)

Microsoft has made it mandatory for the cloud service providers (CSPs) to purchase new product subscriptions and renew the existing ones on the New Commerce Experience (NCE). The company is not going to offer any incentives to Silver and Gold partners for legacy solutions.

Are you ready for the changes to Microsoft NCE terms and conditions, pricing increase, and migration from the legacy CSP program to the New Commerce Experience?

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What is Microsoft New Commerce Experience (NCE)?

If you are still not aware of the Microsoft New Commerce Experience (NCE), it is the right time for you to understand it and meet the new requirements.

Microsoft NCE was first announced as part of the CSP program in 2019 for Azure. Now, it is coming to other solutions, including Microsoft 365, Office 365, Dynamics 365, Windows 365, and Power Platform. Microsoft says that its motive with NCE is to offer customers more choices and flexibility in buying cloud services, while providing CSPs better growth opportunities.

However, it brings some devastating challenges for sellers in the way they manage subscriptions.

*NCE has become generally available in January 2022. From 10th March 2022, all the Microsoft partners will need to purchase new subscriptions on Microsoft New Commerce Experience.

microsoft new commerce experience nce explained

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Microsoft NCE Changes and New TnC Explained

Here is the breakdown of all the changes and terms & conditions coming to Microsoft New Commerce Experience in 2022 and 2023.

New Billing Terms

NCE brings new billing terms and options for customers. For a 1-month subscription, they have to pay for the full month. For a 12-month subscription, they can choose to pay on a monthly basis or pay the full amount. Whereas, for a 3-year subscription, they can pay on a monthly or annual basis or pay the full amount.

Cancellation Window

If customers cancel the subscription after 7 days of purchase, they will be charged for the full term. For cancellation after 24 hours, only a prorated refund will be provided. The full refund can be redeemed only within 24 hours of purchasing a solution. Earlier, the cancellation policy was available for 30 days, with a full refund within 30 days and prorated refund anytime during the term.

Upgrades & Downgrades

A customer can upgrade his subscription whenever required, regardless of the billing term he has opted for. However, once a subscription plan has been chosen, the customer is not allowed to downgrade it. Previously, both mid-term upgrades and mid-term downgrades were available.

Separate Add-ons

If a customer opts for any add-on to the base subscription, it will be listed as a separate product. The add-ons can now be purchased as separate products from base subscriptions. Previously, the add-ons were allowed to be sold as attachments to the base subscription, without showing in the catalogue.

No Billing Pause on Suspension

With the CSP legacy model, if a subscription was suspended, its billing was paused. However, with the Microsoft New Commerce Experience, the subscription billing will continue even after suspension. Billing will pause only if the subscription is canceled.

NCE Pricing Changes

As part of the CSP legacy model, whether the customer subscribes to a monthly or annual plan, the pricing was the same. However, Microsoft NCE provides customers with a 20% discount if they subscribe to an annual plan over monthly subscriptions.

Microsoft New Commerce Experience Price Increase

Along with new terms and conditions, Microsoft CSP New Commerce Experience also brings increased pricing for Office 365 and Microsoft 365 plans. Since January 2022, the seat-based offers for Windows 365, Microsoft 365, Dynamics 365, and Power Platform are generally available as part of the New Commerce Experience model changes.

You can see the new pricing for M365 and O365, impacting both business and enterprise plans.

Why Microsoft NCE Changes Are Challenging for CSPs?

Renewal Complexity

The biggest challenge for resellers with NCE is the complexity of managing renewals. Since a 20% premium is applicable on monthly subscriptions, the seller needs to confirm with the customer whether he wants to continue the subscription or cancel it.

Moreover, if a subscription plan is not cancelled after suspension in the mid-term, the seller will need to pay for the full term even if the customer leaves before term-end. With increased pricing for Microsoft 365 and Office 365, the renewal complexity can cost even higher for certain subscriptions.

If you have a large CSP business, then the scenario gets worse as you need to manage subscriptions and billing terms for numerous customers.

Complicated Subscription Management

With add-ons counted as separate products in CSP New Commerce Experience, the reseller needs to manage multiple subscriptions for a single customer. For instance, if a customer purchases Microsoft Azure and then purchases Office 365 after a few weeks, the anniversary dates will be different for both products.

Furthermore, the billing terms can be monthly for one product and annual for other products. The subscription management becomes complex as you need to manage multiple customers, each having different anniversary dates.

This will not only increase the need for resources and additional platforms, but also impact the bottom line of the business and the customer experience.

Time-Bound Shift to NCE

Microsoft has already released the timelines for the transition from the legacy CSP model to the New Commerce Experience model. The new model has already become generally available.

From 10th March 2022, all the new product orders will need to be placed on New Commerce Experience. Going forward to July 2022, the existing subscriptions will also be renewed on NCE, instead of the legacy model.

The worst scenario comes in October 2022 when Microsoft ultimately puts a hold on offering incentives to patterns selling through the legacy model. Both Silver and Gold partners will get incentives only if they sell with NCE.

For both small and large businesses in the Cloud Solution Provider (CSP) program, the timelines and deadlines are tight. Those unable to adapt to NCE may end up losing incentives.

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How CSP Experts at AppGallop Can Help You Tackle NCE Changes?

AppGallop is the leading cloud automation and subscription management platform built by cloud veterans. With a team of cloud experts working closely with Microsoft, as well as distributors and resellers, we help you avoid the nightmare coming with New Commerce Experience.

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