If you’ve been keeping an eye on Microsoft news lately, and there’s been quite a lot of it, you may have read about some key up and coming price changes but may not have heard about the changes in the way SMEs purchase their Microsoft subscriptions. In short, prices are going up and, with it, plan flexibility is… well, less flexible (unless you are happy paying a premium).
Along with the price increases, if SMEs want to continue to have the flexibility to decrease the number of subscriptions they have other than at renewal, they will need to pay more and give up price protection. Also, the option to be able to move to another provider between renewals is about to be curtailed. And last but not least, resellers are now about to become liable for the cost of an annual subscription – which means paying monthly may be about to disappear too for products requiring an annual commitment, as a way to protect themselves from potential bad debt situations.
Take a look at our breakdown of changes with Microsoft pricing and purchase conditions:
- Dec 2021 – Microsoft retired their Open Volume Licensing programme primarily used by SMEs;
- SMEs now purchase perpetual software licences through Microsoft’s Cloud Solution Provider (CSP) programme;
- From early March, this programme will be phased out for what Microsoft are calling their ‘New Commerce Experience’ or NCE.
- From March 2022, six key M365 subscriptions will see price increases of approximately:-
- Office 365 E5 (+9%)
- Microsoft 365 E3 (+13%)
- Office 365 E3 (+15%)
- Office 365 E1 (+25%)
- Microsoft 365 Business Premium (+10%)
- Microsoft 365 Business Basic (+20%)
- Existing CSP customers will be able to renew their licensing on this programme until July 2022; from mid-March, new customers will have to purchase via NCE;
- Both NCE Annual and CSP are 12-month subscriptions with prices locked for that period;
- CSP allowed customers to amend subscriptions up or down, even to zero – pro-rated cancelation at any time;
- If customers want this flexibility with NCE, there will be a 20% price premium with no price protection;
- Reductions with NCE monthly can only be implemented every 30 days (no pro-rated refunds);
- Prices for NCE monthly are only locked for one month so could be subject to multiple increases over 12 months;
- CSP allowed customers to cancel and move to another direct provider at any time;
- NCE Annual cannot be cancelled after 72 hours from order placement so customers will not be able to change an indirect provider until renewal;
- Because resellers are now fully liable for the cost of the annual subscription, they may decide not to offer monthly payments for annual commitment products.
Quite the headache, isn’t it? Luckily, there is another way.
At Discount-Licensing, we buy and sell pre-owned, perpetual software licenses for Microsoft products as well as offering new licensing. That means single payment, so a fixed cost with no surprise price hikes – you simply use what you’ve purchased for as long as you like. What you buy is now yours forever, or until you decide to sell it on. Preowned perpetual software licences allow you to fix and control your costs at competitive prices, even when compared against subscription.
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