Introduction of Microsoft's New Commerce Experience
Microsoft made a significant change to the Cloud Solution Provider Program (CSP) at the beginning of this year by introducing the New Commerce Experience (NCE). This blog will be talking you through exactly what these changes were and the exciting new benefits NCE brings to customers. Before we get into this, let’s start with a recap of what CSP used to be:
Legacy: Cloud Solution Provider Program
The CSP Program allows partners, like Softcat, to sell Microsoft cloud services to customers. It gives the partner the complete customer lifecycle through direct billing, provisioning, management and support. CSP was designed for the cloud first customer providing more flexibility for customers purchasing online services.
When looking at the terms of CSP, all licenses were purchased on a 12-month commitment term which gave you the flexibility to increase or decrease your seat count as and when this was required throughout the course of the term. The only minimum requirement was having a commitment of 1 license for the 12-month term. Whilst the CSP program was great it did have its limitations which NCE has brought to the program.
New Commerce Experience
Microsoft described Microsoft NCE as a multi-stage, multi-year investment in the CSP program, aimed at accelerating business growth, reducing licensing complexity and costs, and enabling customers to purchase with their preferences. The New Commerce for Azure was released in 2019 so this is the next logical step in the evolution of CSP. At present, NCE in CSP has been introduced for commercial customers whilst for Edu and Non for profit customers the terms haven’t changed from legacy CSP yet.
Customers procuring licenses on an NCE subscription now have the option to purchase two different commitment term lengths, either a 1 month or a 1-year term.
1 Month Commitment Term:
The 1-month commit is a true monthly rolling contract which allows customers to make seat reductions or cancel the subscription after 1 month. This gives customer’s more flexibility than legacy CSP due to the option to completely cancel the subscription off after 1 month with the licenses, great for organisations with seasonal workers, or short-term workers! This option comes with a 20% price premium. In addition, customers don’t have the ability to decrease their seat count midterm and instead, customers are able to make seat reductions at their anniversary. Due to this change the 1 month commitment term still caters to customers who prefer to have flexibility and a lower commitment.
12 Month Commitment Term:
Alternatively, customers have the option to purchase on a 12 month commitment term. Similar to the 1 month commit, on the 12 month commit customers can’t make seat changes midterm after the 7 day cancellation window has closed. This option will also allow for monthly or annual billing. However with this option if customers were to then add new seats midterm it would open up another 7 day cancellation window for the increased number of seats to give customers the option to go back down if needed.
Whilst NCE gives customers the option to have two different commitment term lengths this also allows customers to have a mix of the two agreements. This allows customers to be able to procure Microsoft licensing in a way which suits their organisation the best.
New Commerce Experience Benefits
Now we know what NCE is let’s get into the benefits and new features that have been added to the program for customers.
- With NCE comes the option to upgrade your license midterm (e.g. from Microsoft 365 E3 to E5) without having to still pay for the original license you started with. When upgrading this is referring to upgrading to a product with increased services however it’s worth noting downgrades are not possible. To compare, on legacy CSP if you wanted to upgrade you would have to purchase the new license and scale the old license down to 1, which meant you’d still be having to pay for 1 seat of the old license for the remainder of the term length.
- When upgrading on NCE you can either select a full upgrade, this allows you to upgrade all the seats of the original license to the new license. With full updates no license reassignment is needed. Or you can perform a partial upgrade, this is where you only upgrade a certain number of licenses, e.g. you have 200 seats on M365 E3 and you only want 100 seats on M365 E5 you have the ability to only select 100 seats to be upgraded and keep the remainder 100 on M365 E3. However with a partial upgrade a license reassignment is needed.
- Since NCE was introduced this has meant all new products that Microsoft release will be available only on NCE. This means if customers are looking to upgrade or change their licensing strategy they will have to purchase this on an NCE commitment term.
Add On Licenses:
- In addition to the above NCE has changed the ability to procure products that require a base license (e.g. calling plans etc) without the need to have a base license with the same reseller, as long as you have one on your tenant. Historically on legacy CSP when purchasing an add on license you would also have to purchase a base license before to be able to purchase the add on license, which wasn’t always beneficial if the qualifying base license was with another partner or Microsoft directly. In addition to that the add on license would then have the same renewal date as the base license. This also gives the add on license its own renewal date instead of being the same as the base license.
- An amazing new benefit added to NCE is the 7 day cancellation period customers get on NCE when purchasing new products or increasing their seat count on existing products. This gives customers more flexibility and reduces stress when purchasing licenses in case the wrong amount or license was purchased by mistake. With this customers can completely cancel or change the seat count for the first 7 days after purchasing the license.
There you have it, the New Commerce Experience in CSP explained by Softcat. If you are wishing to transition your existing subscriptions onto NCE then this is something Softcat can facilitate. To discuss anything mentioned above further please reach out to your Softcat account manager and they will be able to set up a call with one of our many Microsoft experts.