Partners: The deadline is looming for you to lock in lower pricing for Microsoft licensing

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Partners: The deadline is looming for you to lock in lower pricing for Microsoft licensing

With the Microsoft New Commerce Experience (NCE) price increases for per-seat licencing products coming into effect on 1 March, 2022, Microsoft has been urging IT provider partners to get on board and align with their new direction.

While two recent blog posts from the tech giant emphasised the need to “understand Microsoft’s priorities and vision for the future” and ensure “all parties are laser-focused on the customer,” there has been a mixed response from Australian businesses.

“Some partners are seeing it as an opportunity to remodel their business, shift customers across to annual contracts, put in place that price protection,” reported Shaun Canavan, Partner Development Manager for Tech Data ANZ.

However, not all IT partner providers are embracing the change, which could result in their customers paying more than they need to for their licensing.

“Globally, we are expecting that maybe 50 per cent% of partners will have made a move by the March deadline,” Canavan said.

A quick recap of need-to-know and need-to-act dates

So, what have you missed and what do you need to know? And critically, what do you need to do right now?

The general availability (GA) and introductory price promotions for seat-based offers in CSP new commerce began on January 10, 2022 (Pacific Time) and January 11, 2022 (UTC).

On January 22, 2022, Microsoft turned the autorenewal default to "On" for software subscriptions purchases in CSP in the new commerce experience. This capability simplifies the renewal process for partners and your customers so software subscriptions can auto-renew on their designated renewal date by default.

On March 1, 2022, the prices for Microsoft 365 Business Basic, Microsoft 365 Business Premium, Microsoft 365 E3, and Microsoft Office E1, Office 365 E3 and Office 365 E5 will increase.

New subscription orders must be placed in NCE starting March 10, 2022. Unfortunately, it's also the end of the line for legacy subscriptions. Beginning July 1, 2022, all legacy subscriptions will be renewed in NCE.

What about partner incentives?

Microsoft plans to extend legacy CSP incentives for seat-based offers (such as Microsoft 365 and Dynamics 365) through December 2022.

“This is an extension on the original October 22, 2022 date – so there's some breathing space here,” explains Canavan. “And the FY23 Microsoft Commerce Incentive program will refresh on October 1, 2022.”

What should you be focussing on right now?

Canavan noted that he is starting to see more businesses take action in 2022.

“If nothing else, your priority should be to move any of your customers with subscriptions that are due to expire, as they will face a price increase between March 1 and June 20, 2022. This way, you can price protect your customers for 12 months,” he added.

After July 1, 2022, IT provider partners will need to transfer their customers to an NCE subscription, and they will have to wear the price increase.

“The good news is that if you transition those customers to NCE before March 1, you'll not only secure their current pricing but also get a 5 percent discount from Microsoft. And if you purchase annual billing, Tech Data is offering a further 5 percent incentive,” said Canavan. “What you do with those rebates is your call.”

The shift will also add complexity to accounts departments, with some organisations set to receive two subscriptions until all subscriptions are under NCE.

“Now is not the time to stick your head in the sand. If you have customers with these six products, you can de-risk your business and help your customers out by moving your customers across now,” said Canavan.

“We want to help as many partners as possible to get the best outcome for their business.”

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