Microsoft is making two significant changes which are getting conflated: price changes to Microsoft 365 seat-based subscriptions and the launching of the New Commerce Experience (NCE). Effective March 1, subscriptions will increase on average 15 per cent (depending on the SKU). At the same time as this increase, businesses will also need to adopt the NCE. This is the first significant price increase since Office 365 was released more than a decade ago. The price increase reflects the innovation that has been added over the years to support the constantly shifting needs of today’s businesses.
The NCE will help businesses prepare for future growth due to improved revenue predictability, reduced licensing complexity and multiple term options.
How are subscription terms changing?
Microsoft has historically offered flexible, monthly subscription terms. The company is moving to an annual commitment model, with a 20 per cent premium to maintain monthly terms.
Businesses can choose to commit to a one-year term while continuing to pay for subscriptions on a monthly basis. However, they will be unable to decrease the seat count or subscription type each month during the commitment period. Businesses can only do this at the time of annual renewal.
Customers can increase their subscription(s) seat count mid-term, which will take effect immediately. Any additional seats will be pro-rated to the original commitment term end date. However, they cannot decrease their subscription(s) seat count mid-term. Businesses will need to wait until subscription term renewal to reduce the seat count.
Customers may upgrade a subscription mid-term (partial/all). The effect will be immediate. The upgraded subscription will be pro-rated to the original commitment term end date. However, they cannot downgrade a subscription(s) mid-term. They will need to wait until the subscription term renewal to downgrade.
How Smart Dolphins is helping?
Education/Communication: Smart Dolphins is assisting each and every one of our clients understand the changes and select a term that best meets their needs. This makes it imperative that changes to your user count (employee onboarding/offboarding) are communicated to your IT support technicians or provider.
Consulting: There are some intricacies that can be considered depending on your business. For instance, if you are an organization that has a large seasonal component to your staffing levels, you can “mix and match” terms. Seasonal employees can be put onto a monthly term with the core full-time staff put onto an annual plan.
Flexibility: At Smart Dolphins, we decided to offer all of our clients the option to continue paying monthly for their annual term licenses. One of our key roles is to guide our clients through their digital transformation, regardless of where they are in their journey and their budget.
We are here to help!