Microsoft will make a number of changes to its Cloud Solution Provider (CSP) licensing structure in 2022.
We’ve outlined the important changes and significant dates in this post because many of our clients use CSP to transact and deliver their Dynamics 365, Microsoft 365, and Office 365 licenses via Preact. This information is based on the most recent Microsoft announcements, although it is subject to change before the final release.
What is changing?
Microsoft is transitioning from a multi-licensing framework with program-specific offerings across its products to a New Commerce Experience (NCE) that allows flexibility to satisfy diverse user needs. This will ensure that Microsoft’s cloud products and purchase channels have a consistent set of policies, agreements, and procedures.
At first, the New Commerce Experience will only apply to commercial client agreements. Not-for-profit and educational channels are not yet included in this transition, although it is envisaged that they will be added to NCE in the future.
Under a global Microsoft Customer Agreement, NCE includes transactions for self-service (web direct), enterprise, and CSP. As a result, for CSP invoicing of client licenses, all IT providers worldwide must switch to the New Commerce Experience and accomplish it, get Dynamics 365 CSP support.
Examples of shifting CSP transactional paradigm
The CSP transactional paradigm will change as part of the New Commerce Experience. The following are examples of this:
- Standard cancellation procedure in line with non-CSP Microsoft licensing programs and subscription models, such as Azure.
- Seat numbers can now be reduced month to month thanks to a new one-month subscription term. This also allows licenses to be canceled at any time during the month without incurring any further costs.
- The ability to arrange subscription changes ahead of time before they expire. This includes making changes to your renewal schedule to renew at a higher or lower SKU count.
- Previously exclusively available with enterprise agreements, a new option to lock in licensing rates by committing to a 36-month term is now available.
These changes may undoubtedly create some stress, but our licensing experts and advisors are on hand to help you through the process. They’ll walk you through the changes and explain what the NCE implies for your existing Dynamics 365 and other Microsoft product subscriptions, as well as what choices are available to ensure your company is using the most cost-effective licensing model possible.
If you presently purchase licenses from another Microsoft partner, we can explain how this will affect your licensing and what choices you have for switching to the New Commerce Experience.
When will these changes take effect?
The New Commerce Experience was supposed to go live in October 2021, however, Microsoft decided to postpone it until January 2022 after receiving feedback from partners.
The NCE will run alongside the present CSP model until February 28, 2022, once it is available. Customers can continue to transact licenses and renew their agreements on the same CSP conditions at this time.
Customers will be able to do the following between January 2022 and February 28th, 2022:
- Subscriptions that have already been purchased should be canceled and renewed under the new NCE terms.
- Subscriptions to the existing Microsoft CSP portal or model can also be renewed.
Beginning March 1, 2022, all new subscriptions and CSP renewals will be on NCE terms.
A New Commerce Experience early adopter deal will be available for orders placed between January and June 2022, offering reductions on monthly and annual term orders.
36-month terms will not be available in January, but they will be in July 2022.
NCE Timeline:
How is Microsoft’s CSP cancellation policy changing?
All cancellations for the yearly and new 36-month agreement options will be invoiced for the full remaining time after a 72-hour cancellation window (depending on the UTC zone). There will be no pro-rata compensation for the balance of the period if this time limit is exceeded.
Seat reductions can only be done at the end of the term, although additional licenses can be obtained at any time during the period. Licensing amounts will not be reduced in the future under the new plan.
Billing will not be transferrable to another partner until the agreement expires when an organization transacts licenses through NCE.
NCE Subscription Pricing
Monthly Subscription
- The ability to reduce licenses at any time during the month for a fee.
- Change the number of license seats on a month-to-month basis.
- You can cancel at any time during the month for no additional fee.
- Prices are guaranteed for one month.
- If you cancel after 72 hours, you will be charged for the entire month.
- When compared to an annual subscription, the price is 20% higher.
Annual Subscription
- Fix annual license rates and, if necessary, reduce the number of users at the end of the year.
- You can expand the number of users at any moment.
- Licenses are reduced at the end of the annual term.
- For the next 12 months, prices are assured.
- You will be charged for the entire 12-month period if you cancel after 72 hours.
Have more questions?
If you have more questions about Microsoft products and services, Microsoft dynamics 365 pricing or need to go through the Microsoft CSP licensing guide, let DHRP be your CSP partner. Be it dynamics 365 dual-use rights CSP or other types of subscription, we can help you in both understanding and implementing it.
