Microsoft has a long history of confusing customers with multiple pricing models and several different agreement types. With Cloud services, some of that has been simplified on the surface, but still leaves customers typically paying more (not less) over time. Microsoft really is not in business to help their customers spend less on Microsoft, but we are.
In that spirit, as many of you already know, Microsoft announced new global price increases set to go into effect March 1, 2022. In addition to the 365 increases, there are other important changes coming to their CSP (Cloud Solution Provider) partner programs that could also impact your price indirectly.
First, the 365 increases:
- Business Basic from $5 to $6 per user
- Premium from $20 to $22
- E1 from $8 to $10
- E3 from $20 to $23
- E5 from $35 to $38
- E3 from $32 to $36
Not quite as well circulated, are the changes to the CSP (Cloud Solution Provider) Program under the NCE (New Commerce Experience). There are three phases to the planned changes and Azure offerings available for Microsoft partners.
How does this impact you?
If you are procuring your Azure through a CSP, the timing of agreement renewals and new purchases could be impacted by the timing of Microsoft's program changes:
- First phase, effective July 21, 2021: All new Azure business in CSP will conduct business on the new commerce platform with the updated Azure plan offer.
- Second phase, effective January 1, 2022: Change over for partners on the previous Azure offer in the CSP program.
- Third phase, effective TBD: Previous Azure offer in CSP will be removed.
In addition to the above phased changes, under NCE (New Commerce Experience), 365 and Power Platform products will be available to partners as follows:
| Monthly (new) | Annual | Multi-Year (new) | |
| Term | One month | 12 months | 36 months |
| Cancel Policy |
-First 72 hours of term: Prorated billing/refund. -After 72 hours, customers will be invoiced for the full month |
-First 72 hours of term: Prorated billing/refund. -After 72 hours, customers will be invoiced for the full 12 months |
-First 72 hours of term: Prorated billing/refund. -After 72 hours, customers will be invoiced for the full 36 months |
| Flexibility | Decrease quantities on a monthly basis. Increase daily. | Decrease quantities on an annual basis. Increase daily. | No option to decrease quantities during term. Increase daily. |
| Price | 20% premium | No change | Same as annual offer. |
| Payment Option | Monthly | Monthly or Annual | Monthly, Annually or Prepay |
| Price Lock | 1 Month | 12 Months | 36 Months |
The good and the not as good:
| The Good: | The Not as Good: |
| 36 month price protection | Cancellation of policy enforcement |
| Billing aligned to calendar month | Monthly term offers 20% premium |
| New multi-year term | Partner earning caps |
| Trial offer conversion to paid | |
| Exclusive new offers(?) | |
| Hybrid use benefit | |
| New communication offers | |
| Multi-geography capabilities | |
| Upgrade scheduling | |
| Toggle for auto-renew | |
| Alignment of subscription end dates | |
| Launch promotion |
Other considerations:
Microsoft has also informed resellers that their terms and cost basis will be changing, effective October 1, 2021 and March 2022. Clients should expect communication from your Microsoft resellers to explain the changes and update any active / renewing prices and terms.
As always, NET(net) is here to assist your analysis and understanding of the impact of these changes to your licensing cost models, and to help you develop better approaches to deliver the services your business needs in the most optimized and cost-effective way.
Contact us today to have your questions answered!
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