Microsoft has recently announced changes to its subscription model, along with several price changes and subscription term updates. If you are a little confused about what exactly changed and if you are affected by the changes, please continue to read below and contact us for any additional information.

Microsoft is changing the way that customers and partners can purchase licenses and is retiring its current subscription model called “Legacy”. The new purchase and billing platform will be called “New Commerce Experience or NCE” which starts on March 1, 2022. The monthly and annual billing will change as Microsoft is pushing their annual subscription model and will charge a 20% premium for those customers who like to keep the ability to increase and decrease seats for individual Microsoft plans and subscriptions on a monthly basis. The new billing terms apply to ALL plans and subscriptions and will take effect via your partner or individual subscription. In addition, Microsoft has changed prices for 6 SKUs (also effective March 1st, 2022), so please see the ‘price increase’ sections for those products.

New Microsoft Subscription Terms*

  1.  Month-to-Month subscription: change number of licenses month to month (increase or decrease), 20% more expensive than an annual subscription, month-to-month billing
  1. Annual subscription: 12-month commitment, no refunds on unused seats, upfront billing
  1. 36-month subscription: lock-in price for a full 36 months, upfront billing, only available for select few Microsoft products at this time, additional products will be announced by Microsoft at a later date

*you are allowed to combine annual and monthly term subscriptions, for example, if you wanted to keep a base number of employees on an annual term to save on the 20% premium, but wanted some flexibility for seasonal workers, new hires, contractual workers, etc. You are also allowed to move from monthly to an annual subscription, BUT you can not move from annual to monthly subscriptions. Customers are allowed to have seats with both monthly and annual commitments for the same subscriptions.

Billing Terms

All subscriptions will default to auto-renew, refunds on cancellations will only be allowed up to 7 days after the renewal date (full refund on day 1, pro-rated refund after). If you have or will have licenses on a monthly or annual subscription, please be aware that those will auto-renew, so please let your current Microsoft partner know of any adjustments ASAP before your subscription gets locked in for another term.

Price Increase**:

  1. Office 365 E1: $10 (from $8.00)
  2. Office 365 E3: $23 (from $20.00)
  3. Office 365 E5: $38 (from $35.00)
  4. Microsoft 365 E3: $36 (from $32.00)
  5. Microsoft 365 Business Basic: $6.00 (from $5.00)
  6. Microsoft 365 Business Premium: $22.00 (from 20.00)

 **effective March 1, 2022 and impacting all customers worldwide regardless of purchased via Legacy or NCE

 Timeline

  • February 28, 2022 – last day to take advantage of 5% discount on annual subscriptions for the 6 products listed above
  • March 1, 2022 – Price Increase for the SKUs listed above will take effect
  • March 10, 2022 – any new Microsoft subscriptions will be handled through NCE
  • July 1, 2022 – any existing monthly subscriptions will be required to be handled through NCE, any annual subscriptions that are due after July 1st will also be required to be handled via NCE at the time of renewal

 Microsoft Promotions

Annual subscription: Receive a 5% discount on any 12 months subscription purchased before March 1st

Monthly subscription: Through the end of June 2022 the 20% premium on new monthly subscriptions will be waived

Summary

If you do not take any action at this time, your Microsoft billing will remain the same until July 1, 2022 (except if you have one of those 6 products listed above). After July 1, 2022 your billing will increase by 20% if you remain on month-to-month billing terms. If you have any questions regarding the changes coming to Microsoft or if you would like some advice on annual vs. monthly commitments, please reach out to us.