All you need to know about Microsoft’s New Customer Experience and March 2022 price increase

As a part of improving customer engagement, Microsoft is rolling out the New Customer Experience (NCE), which will change the way customers purchase and manage their subscription-based licenses like Microsoft 365 and Dynamics 365 etc., through the existing Cloud Solutions Provider (CSP) program.

Microsoft has launched NCE with an objective to reduce the complexities involved with current licensing process and providing cost savings for long term commitments. This will also make the current CSPs a comparable alternative to the longstanding Enterprise Agreement (EA).

With the launch of NCE, Microsoft has also announced that there will be a price increase which will take effect from 1st March 2022 for all new subscriptions. Customers having existing subscription may continue enjoying current lower prices for another year, till February 2023. The price rise will be for following licenses:

License
Current Price
New Price
Office 365 E1 $8 $10
Office 365 E3 $20 $23
Office 365 E5 $35 $38
Microsoft 365 Business Basic $5 $6
Microsoft 365 Business Premium $20 $22
Microsoft 365 E3 $32 $36

How do I secure low prices for a year?

There are two ways to secure low prices till February 2023.

Restart your CSP subscription

You can work with your license provider to restart your current CSP subscription. For example, if your subscription started in May 2022 and will expire in May 2023, you can ask your license provider to restart it from February 2022. This will lock in your current subscription at the same prices, billing terms and CSP program terms till February 2023.

With this mode, you can continue enjoying the monthly billing and upgrade or downgrade quantities till February 2023 as usual. It is important to note that any new licenses that you add will end with your current subscription in February 2023.

Starting March 2023, you will be automatically migrated to NCE program where you will have to pay the subscription at March (2022) Product Price Increase rate, as well as have to make the decision to do an annual contract or a monthly contract that comes with a 20% premium price. Pay is required upfront for monthly and annual contracts. This is further explained in the following sections.

Move to NCE program

You may opt to move to the NCE program immediately without restarting your current CSP subscription. You will still be able to lock in the current subscription pricing and avoid the March price increase for another year. However, you will have to pay for subscriptions upfront for 1 year and you cannot reduce quantities during this period. On top of that, you will also be able to secure a 5% additional discount on the current pricing as an incentive to move to the NCE program. You may also opt for monthly billing, where you will not get 5% discount and the current pricing will be available only through June 2022. Starting July 2022, you will need to pay the new subscription price.

CSP vs NCE

Feature
CSP
NCE
Billing Monthly, Annual Monthly, Annual, 36-month
Mid term changes in billing cycle Yes Only for Monthly to Annual or 36-month, no downgrade
Cancellation Policy 30 days 72 hours
Full Refund Within 30 days Within 24 hours
Prorated Refund Anytime during the term Within 72 hours/td>
Billing Pauses on suspending licenses Yes No
Billing Pauses upon cancel Yes Yes(annual subscription price not refunded)

Understanding NCE billing

The illustration below will help you understand NCE billing terms if you decide to migrate to NCE or automatically get migrated to NCE after February 2023.

1-month subscription
12-month subscription
36-month subscription
Billing terms Monthly Monthly, Upfront Monthly, Annual, Upfront
Pricing +20% price premium March 2022 pricing March 2022 Pricing
Commitment Flexible Firm Firm
Cancellation Within 72 hours Within 72 hours Within 72 hours
Post 72-hours cancellation window Billed for full month Billed for full 12-month term Billed for full 36-month term
Price Lock 1 month 1 Year 3 Years
Midterm upgrades Allowed Allowed Allowed
Midterm downgrades Allowed Not Allowed Not Allowed
Availability All per user SKUs All per user SKUs (Except windows 365) Dynamics 365 Selected Microsoft 365 Licenses

What is not covered under price lock?

Any subscriptions that you do not already have would not be covered under price lock. For example, if you already have Microsoft 365 E3 licenses but no E1 licenses, any new / upgrades to E1 will be counted as a new subscription and will be charged as per March 2022 increased prices.

Takeaway

If you decide to continue being on the CSP by restart your current subscription period, you get flexibility to increase / decrease licenses (not new subscriptions) at the same cost, while enjoying monthly payment benefits for next one year. But this will stop you from getting 5% additional discount. This could be a preferred choice for customers who frequent increase / decrease their licenses.

You may want to move to NCE if you think you will not need to increase / decrease licenses for next 1 year and do not mind paying upfront for a year to enjoy the 5% additional discount.

Moving to NCE with a monthly subscription will be the least recommend choice as it only allows you to lock current prices till June 2022, after which you start paying 20% premium on the increase prices without getting any additional discount, though it gives you the liberty to perform mid-term downgrades.

Note: All the information provided above is for reference purpose only. For any additional details on pricing and the NCE program, please work with your license provider.

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