Microsoft’s New Commerce Experience (NCE) FAQs
What is Microsoft’s New Commerce Experience (NCE)?
Microsoft’s new order, provision and billing platform for seat-based licenses in CSP. Includes Microsoft 365, Dynamics 365, Power Platform, and Windows 365.
How are NCE subscriptions priced?
Annual commitment pricing is aligned to historic legacy pricing, with monthly commitment being priced at a 20% premium.
When will legacy commercial licenses be retired?
Starting January 2024, Microsoft will begin to retire legacy commercial services at their next renewal date. These will be automatically migrated by Microsoft to NCE annual term commitment and be billed monthly, maintaining the same seat count. We’re advising customers to plan and migrate in advance of their automatic migration to allow them full flexibility and choice (inc. moving them to monthly term, starting a new term/keeping the current term, reducing/increasing license count etc).
There are several offers that will not be eligible to move to NCE. Microsoft are updating the list of offers not eligible to move to NCE monthly. Click here for the latest list.
Are public sector legacy licenses available on NCE?
In December 2023, Microsoft delayed public sector license availability, including Government, Education and Non-for-profit licenses from January 1st 2024 to March 1st 2024.
Licenses will be available on NCE in ‘waves’ from March 1st 2024. However, Microsoft are yet to confirm which non-commercial licenses will be included in each wave. Due to the delayed timings, the first two waves have been combined. Please refer to the table below for the wave dates.
Microsoft have advised the list of included licenses in each ‘wave’ will be released one month in advance. You can read their latest announcement here.
From 1st May 2024, Microsoft have confirmed you will not be able to purchase any new legacy offers.
Microsoft have also announced a new non-commercial offer, where you can get monthly-term non-commercial licenses for the price of annual term commitment. Click here for more info.
What are the refund policies for cancellation?
Microsoft advise a partner can receive a prorated refund of the initial subscription payment only within the first 168 hours (7 days) after the order is placed or renewed. After 168 hours of the term, the subscription cannot be cancelled and payment for the remainder of the term must be made.
Why do monthly term subscriptions cost more than annual-term ones in new commerce?
Microsoft advise the new monthly term subscriptions in NCE are billed by Microsoft at a 20% higher price than annual-term offers of the same type because they give the partner the ability to cancel on behalf of the customer at any time without incurring additional payments for the remainder of an annual term. The premium pricing is in line with standard practice in the Microsoft Web Direct program and in other industries – for example, an airline ticket with a higher price that’s refundable instead of a lower-priced non-refundable ticket.
Can customers on an annual subscription opt to pay monthly?
Yes, despite being on an annual subscription, customers can pay monthly.
Can I change an Annual Term commitment offer to Monthly commitment offer?
Microsoft advise this is only possible with the first 168 hours of placing an order for an Annual commitment offer and would require you to cancel the annual commitment offer within 168 hours of placing the order to receive a pro-rated refund for the annual commitment offer. You can then place the order for the Monthly commitment offer. You cannot switch from an Annual commitment offer to a Monthly commitment offer outside of the initial 168 hours until the next renewal.
When I transition legacy customers to new annual commitment offers in NCE, how can I explain why the cancellation policy will be enforced?
Microsoft state the cancellation-policy enforcement in the NCE is aligned with similar standard policies both within Microsoft and of competitors. In the new commerce experience, customers are rewarded with more favourable pricing for longer terms in which pricing is locked in for the entire term, as opposed to monthly term subscriptions that have a higher price at time of purchase and are subject to price increases month to month.
To which NCE offers should I transition my legacy subscription customers?
Microsoft advise that transitioning to NCE is the time to assess each customers needs and develop a holistic transformation strategy, including an opportunity to increase seat counts, plan for upgrades, and upsell other solutions and value-added services.
For example:
- Customers with a stable or expanding workforce will be attracted to annual term offers due to price predictability. Even with the enforcement of the new cancellation policy in the NCE, those customers will be able to cancel a subscription within first 168 hours of each annual term.
- Customers with variability in workforce due to seasonality or business uncertainty will likely prefer monthly term offers that allow cancellation or seat reduction in any mont
Will there be a provision to cancel an annual-term or multi-year subscription if a customer goes bankrupt or stops paying?
Microsoft encourage partners to perform credit-worthiness checks on customers and to advise customers with uncertain financial situations to consider purchasing monthly-term subscriptions. These best practices protect the partner from becoming liable for the total cost of an annual-term subscription in the NCE if the customer cannot pay for the entire term.
Can monthly term subscriptions be changed to annual term easily in NCE? Some businesses need subscriptions or additional seats only during peak times of year, for example.
Yes, a customer’s subscription can be changed from monthly term to annual term in NCE. However Microsoft have confirmed that this only applies so long as the subscription does not have a promotional offer applied (Microsoft restriction).
Can I suspend an Annual commitment offer in NCE?
Yes, Microsoft have advised Annual commitment subscriptions can be suspended. Please note it does not stop the billing.
Can I mix and match Annual commitment offers and Monthly commitment offers in NCE on the same customer?
Yes, an end customer could have both a monthly committed offer and annual committed offer for the same seat-based offer at the same time, with the appropriate number of seats in each committed term offer. For example, to accommodate its permanent and seasonal employees.
Can I adjust the amount of seats on an annual commitment in NCE?
Microsoft state within 168 hours of purchase you can reduce the amount of seats, but once this time has elapsed the seat count is locked for the term with only additions allowed. If you make additions during this time, you won’t be able to reverse the changes . At renewal of the term the 168 hours period for cancelations/seat reductions will come back into effect and you can make any changes. You will be able to schedule these changes in advance to automatically apply at renewal. Please note that for monthly term subscriptions, the seat count can be increased or decreased at any time (with decreases taking effect the following month).
What if a technical problem with Microsoft prevents me making changes to my licences before their initial 168 hour period ends? Who will be liable?
Microsoft have advised if a technical problem within the API/Processing process prevents changes within the 168-hour period, a support ticket can be raised with supporting evidence and Microsoft will review these on a case by case basis.
With NCE for seat-based subscriptions, when a customer purchases an annual-term subscription from Partner A, are they allowed to move that subscription to Partner B within that year’s term?
No, moving subscriptions across partners is not a supported feature. Partners can cancel subscriptions but must adhere to the cancellation policies regarding their committed term. For example, if the customer purchases a subscription from Partner B after the first 168 hours of the term of the subscription purchased from Partner A, then Partner A will not be able to cancel that original subscription on behalf of the customer and there will not be any refund for the remainder of the annual term of the subscription with Partner A. In that case, it would be best for the customer to wait until the time of renewal of the Partner A subscription to purchase the same subscription from Partner B, and then to not renew the subscription with Partner A.
While the above is correct when moving between partners that have different providers, Giacom have created a tool to move end customers between Giacom partners possible – Contact us for more information.
Does the NCE changes apply to all CSP partners worldwide?
Yes, all partner types in CSP (Indirect Provider, direct bill, indirect reseller) worldwide are affected by the NCE changes.
Will I need to sign or accept any new or different agreements?
The Microsoft Partner Agreement accepted by partners to activate their CSP tenants will continue to be the standard agreement. Customers will continue to accept the Microsoft Customer Agreement (MCuA) that governs their purchases from CSP partners.
Giacom have issued updated Subject Specific Terms (SSTs) to incorporate NCE changes made by Microsoft. Read more information and instructions on how to agree the updated SSTs.
How will the NCE affect partner profitability?
Microsoft advise NCE in CSP will help increase profitability for partners by providing a durable and scalable business model and improving operational efficiency in the CSP program. With the new cancellation policy and premium pricing for the new monthly term offers, the NCE encourages customers to commit to long-term subscription ownership and leverage the CSP program benefits, including the partners’ bundling of Microsoft offers with their own solutions, IP, and value-added services. Partners will also be able to monetise the flexibility of the monthly subscription term, and to increase customer lifetime value with the ability to upgrade to Enterprise subscriptions in the middle of the term (not enabled for Windows 365 offers). Finally, the NCE will improve subscription-management capabilities, optimise offer ingestion, and increase accounting efficiency.
Can I upgrade an annual commitment offer in NCE ie M365 Business Basic to M365 Business Standard?
Yes, full upgrades (all seats) to an upgraded offer are allowed. This upgrade feature is available as self-service in Cloud Market.
Can I downgrade an annual commitment offer in NCE ie M365 Business Standard to M365 Business Basic?
No, following the 168-hour period in which you can make changes, Microsoft advise the chosen offer is locked for the term.
What is happening to the commercial customers I have on the legacy platform today?
Starting January 2024 all CSP ‘legacy’ licenses will be migrated to NCE at their renewal.
When migrated by Microsoft, subscriptions will move to NCE annual term commitment and be billed monthly, maintaining the same seat count.
Microsoft are updating the list of offers not eligible to move to NCE monthly. Click here for the latest list.
Are there any changes to Azure?
The changes detailed in these FAQs effects M365/D365 and other seat-based subscriptions. Azure was the first service to move to NCE and as such the transition has already begun from legacy Azure to the new Azure Plan. All new customers for Azure must now purchase the Azure Plan. Those with Azure should already be aware of these changes, however if in doubt, please reach out to our team.
Can partner A and partner B sell an annual subscription for the same SKU to the same customer tenant?
Microsoft have confirmed that this is possible. However, the 300-seat limit on certain SMB SKUs applies to the aggregate of seats on a customer’’’s multiple subscriptions on that SKU, not to each subscription on that SKU.
What happens if a customer company is bought by another company and their businesses are consolidated?
Microsoft advise both customer entities will have to continue the existing terms of their respective subscriptions before consolidation
When I order a subscription with a monthly term, does the price at the time of order remain in effect as long as the subscription is active?
No, at each monthly renewal of the subscription on a monthly term, the price charged to the partner for the next month’s term will be the price in effect at the time of renewal, not the price in effect when the subscription was originally purchased. However, an annual term subscription’s pricing is locked for the entire year’s term; when that subscription renews, it will be charged at the price in effect at that time.
How do I migrate my customers from legacy to NCE?
We have free migration tools to help make the transition quick and simple for you. Reach out to your Giacom rep for more info.
Will there be any changes to the CSP Incentives I receive today?
Yes, there will be changes made to the CSP Incentives for licences on the NCE platform. Reach out to your Giacom rep for more info.