Beginning in January 2022, Microsoft introduced a new billing process for Cloud subscriptions, the "New Commerce Experience (NCE)", which is bringing about some changes for subscribing customers.
What is Microsoft's New Commerce Experience (NCE)?
The New Commerce Experience (NCE) refers to the new unified billing platform for Microsoft Cloud products, providing partners with new tools to simplify the management of customer subscriptions.
Current subscriptions associated with Microsoft Cloud products use the Legacy billing method while new subscriptions will be referred to as NCE.
The NCE billing method includes new customer commitment terms as well as price adjustments. The NCE terms and conditions will be phased in between January 1, 2022 and June 30, 2022 for all new subscription purchases and renewals.
The New Commerce Experience (NCE) does not currently apply to Non-Profit Organization (NPO) customers who have Non-profit licenses. These licenses will continue to renew in Legacy mode until Microsoft issues further guidelines.
The main changes brought about by the NCE
- New Subscriptions: Effective March 10, 2022, all new subscriptions associated with Microsoft products must be done in NCE mode with the applicable terms and conditions.
- New Subscription Term Options: NCE subscriptions will feature a 1-month, 12-month or 36-month commitment period, providing price protection for the period.
- Cancellation Policy: A customer will not be able to cancel or reduce the number of licenses of a subscription during the commitment period. However, customers will have 72 hours after license activation to cancel or reduce the number of licenses of a subscription.
- Monthly Term Subscription: Monthly term subscriptions will carry a 20% surcharge on the annual price but will provide flexibility for customers requiring a change in license quantity throughout the year, or for customers who do not wish to make a one-year commitment.
- Payment of Subscription Fees: Fees for new subscriptions, renewals or additions of licenses must be paid at the time of purchase for the full value of the commitment period.
- Renewal of Existing Subscriptions: Effective July 1, 2022, all expiring Legacy subscriptions must be replaced with NCE subscriptions with the applicable terms and conditions. Legacy subscriptions expiring prior to July 1 may also be replaced by NCE subscriptions.
Frequently asked questions about the New Commerce Experience (NCE)
1. Does the launch of NCE affect the terms and conditions of existing Legacy subscriptions?
No. The current terms and conditions of existing Legacy subscriptions will continue until their expiration date.
2. How do I know when my existing Legacy subscriptions expire?
Legacy subscriptions have a 12- or 36-month contract period that is not enforced by Microsoft. Contact your partner to find out your expiration dates.
3. Will there be any price changes with NCE?
Price increases are announced for certain products in March 2022.
There is no increase planned for Dynamics 365 and Power Platform suite products for annual and three-year subscriptions. However, a 20% surcharge is applied for monthly subscriptions. Prices remain subject to change in the future.
4. Can subscriptions with an annual or three-year commitment be paid monthly?
No. Only monthly subscriptions can be paid monthly. Annual and three-year subscriptions must be paid in full at the time of purchase prior to activation.
5. Why choose a subscription with an annual or three-year commitment period?
These types of subscriptions provide price protection for the duration of the commitment period and are more cost-effective than monthly subscriptions.
6. Can I reduce the number of licenses for a annual or three-year subscription?
License quantity for these subscriptions can only be reduced within 72 hours of activation or at the time of annual renewal. It is not possible to reduce the number of licenses in a subscription during the commitment period.
7. Can I add licenses to an annual or three-year NCE subscription during the commitment period?
Yes, licenses can be added at any time, and their commitment period will be aligned with other licenses for the same product. As such, an invoice will be issued to cover the duration between the activation date of the newly added licenses and the end date of the subscription commitment period. If licenses are activated mid-month, they will be billed on a pro-rata basis for the number of days remaining in the month plus the remaining months until the end of the commitment period.
8. Can I add licenses to a Legacy subscription?
Yes, licenses can be added to a Legacy subscription at any time at the same price as existing licenses, until the Legacy subscription expires.
9. Can I combine a monthly subscription with an annual or three-year subscription for the same product?
Yes. Monthly licenses are intended to provide subscription flexibility for seasonal businesses, enabling them to increase their number of licenses for a given period.
10. Will we continue to receive monthly billing?
Yes, for monthly subscriptions.
For annual and three-year subscriptions, these will be billed prior to their start or renewal date for the duration of the commitment period, i.e., 12 or 36 months. Note that each subscription has its anniversary date, and it is therefore possible that a customer has a mix of annual subscriptions with different anniversary dates in addition to monthly subscriptions. As a result, separate invoices are to be expected.
11. Will customers be required to sign a new Microsoft Customer Agreement (MCA) when transitioning from Legacy to NCE?
No. The MCA agreement accepted by customers when purchasing Legacy subscriptions will continue to apply.
12. Can a customer have both Legacy and NCE subscriptions simultaneously?
Yes. For example, a customer who has Dynamics 365 Sales licenses in Legacy subscription ending in October 2022 and who wishes to add Dynamics 365 Service licenses after March 10, 2022, these will have to be purchased in NCE mode while Sales licenses will continue in Legacy subscription.
13. Can a customer transfer their NCE subscriptions from one partner to another?
No. It will not be possible to transfer subscriptions to another partner. At the renewal date, the customer will be able to cancel their subscriptions with their former partner and activate new ones.
14. What happens if I don't renew my subscription before the end of my Legacy contract; do I risk having my service interrupted?
Until June 30, 2022, Legacy subscriptions will automatically renew if not transitioned to NCE mode, so there is no risk of service interruption.
As of July 1, Legacy subscriptions must be transitioned to NCE mode, and if this is not done, access to licenses could be suspended but data would not be erased. Upon activation of the new NCE subscriptions, access to licenses and data would be reactivated.
Given that annual NCE subscriptions must be paid for prior to their activation, it will be important to plan the transition with your partner several weeks before the expiration date of your subscriptions.
At Gestisoft, our team responsible for subscription renewals will contact each customer several weeks in advance to prepare a transition plan and therefore ensure that there will be no service interruption.
Note: The information in this document is based on information available at the time of publication. This information is subject to change without further notice. Gestisoft cannot be held responsible for customer decisions made based on this information.
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