About the 2022 Microsoft 365 price increases and “New Commerce Experience” (NCE)
Microsoft has announced in 2021 some pricing changes AND changes in how customers purchase and manage their 365 licenses through Cloud Solutions Providers like E Street.
In January 2022, Microsoft launched what they have termed the “New Commerce Experience” (NCE) with the stated goal of reducing complexity and providing consumers cost savings for long term commitments with 365 plans.
The NCE changes include a rate increase for monthly terms, the offering of annual term (and later in 2022 Microsoft will even offer a 36mo term), and additional guidelines Microsoft will impose on seat (license) changes for customer subscriptions.
What does this mean for me and my 365 plans?
The price changes affect the following six (6) 365 plans:
- Microsoft 365 Business Basic (formerly Office 365 Business Essentials)
- Microsoft 365 Business Premium (formerly Microsoft 365 Business)
- Office 365 E1, E3 and E5 (Enterprise plan)
- Microsoft 365 E3 (Enterprise plan)
In addition to the price increase on the plans above, with the launch of NCE 365 licensing agreements, NCE will contain the following terms:
With the NCE you will have the ability to purchase your Microsoft 365 licenses on a monthly basis without an annual commitment. Microsoft is now offering this to provide flexibility to customers that need to make monthly changes to their Microsoft 365 or Office 365 and seat counts. This subscription option does come at a 20% price increase across all license plans.
12 month subscriptions
Through the NCE, you’ll have the opportunity to commit to your licenses through an annual subscription. For E Street managed 365 customers choosing the annual option, this must be paid up-front with E Street. With the 12 month subscription, your pricing will be locked in for the entire term – allowing you to benefit from the additional cost savings of any price increases due in that time. This subscription will allow you to increase but not decrease the seat count. Any seats added to a given subscription mid-stream will co-term with the other licenses in that subscription.
When do NCE and the price increases launch?
Here are some of the key dates that you should be aware of:
- January 10, 2022 – The New Commerce Experience (NCE) launches, and Microsoft will release their introductory promotions. It’s advised that you look at committing to the new subscriptions to leverage the discounts available.
- March 01, 2022 – the price increases across Microsoft 365 licences are enacted. From March on, all new and renewing subscriptions will be purchased through NCE.
- October 01, 2022 – All customers will now have to purchase licenses through NCE.
What should you do about NCE?
It is recommended that you speak to E Street about the move to NCE before 1st March 2022 to possibly leverage any discounts available, and it is also a good opportunity to audit the current licenses you have to ensure you are not paying for licenses that are not needed or, paying a premium for features you’re not using.
So the bottom-line is… that if you do nothing and remain in the current monthly subscription, your MS 365 cost will increase between 20 and 35%. If you opt for a 12mo contract (paid in advance), your cost will only go up 15%.