As Microsoft makes public sector subscriptions eligible for migration to the new commerce experience (NCE), we’ve got you covered. Read on to learn how to ensure your public sector clients are ready to move from their legacy Cloud Service Provider (CSP) subscriptions to NCE as their trusted Managed Service Provider (MSP).
What is NCE and how does it impact public sector customers?
NCE is the latest evolution of the CSP program that is applicable to seat-based offers in Microsoft’s modern work (Microsoft 365 and Office 365) and business applications (Dynamics 365 and Power Platform). Here are the key changes of NCE, compared with legacy CSP:
- NCE will have enforced annual and monthly commitment periods. Monthly subscriptions will have a 20% price premium.
- In NCE, partners/customers will have seven days after activating the subscriptions to change the subscription term and/or quantity or cancel the subscription. After this grace period, the subscription is locked-in for the agreed commitment term.
- In NCE, a single customer tenant can qualify for both education and nonprofit licenses.
In July 2023, Microsoft announced the launch of NCE for public sector customers. Microsoft defines the public sector as nonprofits, government, and education customers. These customers need Microsoft to qualify and approve them to access sector-specific licenses.
NCE was first introduced to commercial sector customers in 2020 and will soon become available to your public sector customers. This will help partners manage all their subscriptions under one platform more easily.
Initially, the availability of NCE for public sector was scheduled for November 2023, but Microsoft has taken partner and customer feedback into consideration, allowing more time for transition. The introduction of NCE will soon be followed by the retirement of legacy CSP subscriptions, which means if you don’t take any action before the legacy subscription renewal date, Microsoft will begin migrating legacy CSP subscriptions to NCE with annual commitments. This applies to commercial customers who have not migrated to NCE as well.
As it stands, Microsoft will launch its CSP public sector offers in new commerce starting January 1, 2024, with Microsoft-led migration of public sector offers starting July 1, 2024. Although the timeline for public sector NCE availability has been pushed back, it’s still coming soon and can have a substantial impact on your customers. The time to discuss migration with your customers is now, so let’s take a closer look at NCE.
How do I prepare my public sector clients for the upcoming change?
Transitioning to NCE is the biggest change to happen in Microsoft public sector licensing in a long time. It will change how you do business with your clients and how you manage their licenses. You need to make sure both you and your clients are ready for the change. Below are some key things to consider when you communicate these changes to your public sector customers.
We know most government, education, and nonprofit customers are heavily reliant on pre-allocated annual funding. Some organizations may operate on a calendar year budget cycle, while others operate on a fiscal year running from July to June or October to September. Since annual commitment through NCE is the most economical option, it is important to educate your customers on the upcoming changes to their licensing structure and payments so they can allocate the right costs to their upcoming operational budget.
Fluctuating user number
In the public sector, the number of software subscription users fluctuates heavily throughout the year. High turnover can be the result of varying numbers of interns, contractors, volunteers, or students in each intake. It’s important to understand what proportion of user numbers are subject to fluctuation so you can structure their licenses based on the commitment period. The most economical approach would be to allocate annual subscriptions to the core user base that is likely to remain constant throughout the year and keep the rest flexible with monthly subscriptions.
Cyber criminals often target public sector organizations to access their sensitive data, such as personal identifiable information (PII). Cybersecurity is therefore not a luxury, but a necessity for these organizations. They need to protect their data, their users, and their reputation from cyber threats.
Transitioning to NCE provides a great opportunity to review and improve your public sector clients’ security posture. Many of these organizations are still using legacy products that have not been updated for several years. These products may have vulnerabilities or compatibility issues that expose them to risks. By upgrading to modern SKUs, you can help your public sector clients secure their environment and consolidate their security costs.
The role of Pax8
At Pax8, we are here to help you with this transition. With our NCE tracker, which you can find by logging into our Platform, you can easily identify which of your clients are on legacy CSP subscriptions, which products they’re using, and when they’re due for renewal. We encourage you to proactively reach out to your clients and educate them on the benefits and challenges of NCE. If you have any questions, please feel free to contact your Pax8 representative.