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Microsoft License Changes. What's happening, and what you need to know?!
Out with the old, in with the new. Microsoft is moving forward with the discontinuation of the legacy Cloud Solution Provider (CSP) program, replacing it with the New Commerce Experience (NCE) to offer more capabilities and flexibility.
They will begin to auto-migrate any existing Legacy subscriptions to NCE on or after their corresponding renewal dates starting September 2024 with increased prices. Starting August 1, 2024 new subscription purchases must be on new commerce.
The introduction of the New Commerce Experience (NCE) marks a significant shift in how Microsoft's Office 365 licenses are managed, purchased, and renewed. This guide is designed to navigate you through the transition to NCE, ensuring you're well-prepared for the changes ahead.
Key Dates for the Transition
September 1, 2024, Microsoft will commence the auto-migration of existing Legacy subscriptions to NCE, aligning with their corresponding renewal dates from September 2024 onwards. This means that your current licensing arrangements will transition to NCE standards without immediate action on your part.
August 1, 2024, any new subscription purchases must be made within the NCE framework.
Does this apply to me?
If a technology services partner, like Aqueity, manages your Microsoft Office 365 or Azure licensing, then this DOES apply to you. Contact Aqueity's Client Engagement team at sales@aqueity.com with questions.
What if I do nothing?
The auto-migration will transition existing subscriptions as follows:
- Subscription prices will increase based on the commitment and quantity.
- Subscriptions will be transitioned to an annual commitment and inherit the existing Legacy subscription billing term of annual or monthly.
- Subscriptions will be transitioned to the NCE version of the product and keep the same quantity.
- Subscriptions dependent on one another (base/add-ons) will all be migrated at the base subscription’s renewal date.
- Subscriptions will have a seven-day (167-hour) window to make any changes.
Understanding Subscription Changes with NCE
Licenses for products such as Office 365 E3 are User Subscription Licenses—you need one license for each user. These products are also known as seat-based offers or license-based services and include all the Office 365, Microsoft 365, Dynamics 365, and Windows 365 products. It’s these products that are now available to be transacted for commercial customers through the NCE.
If you have existing Microsoft CSP licenses that are being transitioned to NCE, here are some key differences to be aware of:- Your invoices will be aligned to a calendar month.
- You can only reduce licenses, or cancel subscriptions, within the first 168 hours after the order is placed or the subscription is renewed.
- There are 1-month subscriptions as well as 1-year subscriptions available for all products. You can purchase a combination.
Making Changes to Your NCE Subscriptions
Once a subscription has been created, changes may be made to it during its term. The following table summarizes which changes may be made midterm:
| Change | Allowed? |
| Add licenses | Yes, at any time |
| Remove licenses | Yes, in first 168 hours |
| Upgrade license type | Yes, to specific, eligible upgrades |
| Change term | Yes, to a longer term where available |
| Change billing frequency | Yes, in some cases |
| Turn auto-renew off | No |
| Adjust end date | No |
Billing frequency
The billing frequency is initially chosen when the licenses are transacted.
| Subscription term | Billing frequency options |
| 1 month | Monthly |
| 1 year | Monthly or annual |
Changes
You may be able to change the billing frequency midterm, dependent on the current billing frequency, the license term, and the billing frequency and license term you want to move to. In this case, changes are made immediately. If an option isn’t available, then you may be able to schedule the change to occur at renewal, as described in the following tables, as long as auto-renew is on the for subscription.
Changing license term only
| Original license term | Change to license term | |
| 1 month | 1 year | |
| 1 month | --- | Immediately, or at renewal |
| 1 year | At renewal only | --- |
| Original billing frequency | Change to billing frequency | |
| Monthly | Annually | |
| Monthly | --- | At renewal only |
| Annually | At renewal only | --- |
Changing license term AND billing frequency
| Original license term and billing frequency | Change to license term and billing frequency | ||
| 1 monthly, monthly | 1 year, monthly | 1 year, annually | |
| 1 month, monthly | --- | Immediately, or at renewal | Immediately, or at renewal |
| 1 year, monthly | At renewal only | --- | At renewal only |
| 1 year, annually | At renewal only | At renewal only | --- |
Guidelines for Cancellations and Upgrades under NCE
Cancellations and upgrades under NCE follow specific guidelines designed to minimize disruption and maintain consistency. Cancellations and seat reductions are permitted within the first 167 hours (about seven days) of a new or renewed subscription.
Upgrades, however, are permanent actions that can be processed at any time during the subscription term, allowing for a transition to a higher-tier product without initiating a new commitment term. This flexibility in upgrading ensures that businesses can adapt to changing needs without penalty.
What next?
In conclusion, the transition to Microsoft's New Commerce Experience represents a significant shift in how Microsoft licenses are managed, purchased, and renewed and it is important to stay informed and be prepared. Businesses should take this as an opportunity to audit their existing accounts to make sure they are licensed properly and understand what they are paying for, along with what future purchases look like.
Aqueity is helping current clients manage the transition. Contact Aqueity to discuss how we can help you.
