This post was last updated March 22, 2023.
Find out what the NCE “per seat” model means for you.
Microsoft’s Cloud Solution Provider (CSP) program continues to evolve as they adapt to support the constantly shifting needs of today’s businesses. As part of their investment in the CSP program, Microsoft has been working to reduce licensing complexity and costs, as well as provide flexibility to support a range of client purchasing scenarios. To achieve this, Microsoft launched the New Commerce Experience (NCE) for Microsoft Azure in 2019 — and in the fall of 2021 expanded NCE to include Microsoft 365, Dynamics 365, Windows 365, and Power Platform for commercial seat-based offers.
As your Microsoft experts, the Pax8 Microsoft team is here to help you stay current on the latest changes and updates to the CSP program so that you can take advantage of all the available features, benefits, and opportunities.
Read below to learn more about what NCE means for you.
What is NCE?
The New Commerce Experience (NCE) “per seat” model for Microsoft 365, Dynamics 365, Windows 365, and Power Platform subscriptions is the latest in the evolution of their CSP program. It provides resellers with new tools to simplify and manage subscriptions.
Watch our how-to videos to switch to NCE.
Microsoft announcements:
- Partner Center — Microsoft Docs: Promotional discounts announced and migration period extended in CSP New Commerce Experience
- Microsoft Partner Center Blog: Coming to the Cloud Solution Provider program: seat-based offers in new commerce
- Microsoft NCE Readiness Gallery: New Commerce Experience for CSP seat-based offers
- Partner Network: What you need to know from Microsoft
Future calls resource calendar
Microsoft is providing additional insights during these events to provide further details on NCE. There is a CSP Spotlight Session and a Licensing Update Information Session. Register for sessions.
New Commerce Experience subscription tracker
To help simplify the management of NCE, Pax8 has developed an NCE Tracker tool to help partners manage their customer renewal dates in the Pax8 Marketplace.
You can find the NCE Tracker under Tools in the Pax8 Marketplace on the left navigation pane, and it’s visible for primary partner admins, partner admins, technical reps, and billing admins. The NCE Tracker provides legacy subscription renewal information that can support partners in determining when it is best for their business to move legacy subscriptions to NCE. Additionally, the NCE Tracker shows NCE subscriptions with renewals approaching in the next 30 days.
Incentives lost on legacy and gained on NCE
Here are the Microsoft Business incentives you’ll lose if you stay on legacy compared to what you’ll gain on NCE.
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<h2>What does this mean for you?</h2>
<p>Moving to the New Commerce Experience will help you prepare for future growth thanks to improved revenue predictability, reduced licensing complexity, multiple term options, and features that enable new sales capabilities and operational efficiencies.</p>
<h3>Term options (promos not included)</h3>
<p>Commitment term — the duration of the Microsoft subscription commitments (monthly or annual)</p>
<p>Billing term — the frequency of the billing (monthly, annual upfront, annual paid monthly)</p>
<p>With these new NCE licenses, you are locked into the commitment term that is selected during checkout and can only cancel or modify within the seven-day (167 hours) modification window.</p>
<p><strong>Options:</strong></p>
<p>Monthly commitment term:</p>
<ul>
<li>Monthly billing with a monthly commitment: this term options at a 20% premium. The commitment and billing both renew each month.</li>
<li>Partner can only modify in the seven-day modification window each month.</li>
</ul>
<p>Annual commitment term: SKU is able to be modified or canceled within the first seven days of provisioning. Then it will be in the locked commitment of the annual term and will be able to be modified or canceled again on the renewal set by the commitment end date.</p>
<ul>
<li>Monthly billing term with an annual commitment: Partner is locked into an annual commitment but billed monthly.</li>
<li>Annual billing term with annual commitment: Partner pays upfront.</li>
</ul>
<p>Triannual term options: upfront, annual, or monthly payments (only available for software)</p>
<h3>Changing terms:</h3>
<p><strong>Billing terms</strong>: Billing terms cannot be changed mid-commitment. The only time the billing term can be changed is during an upgrade, or else it will need to be canceled, and a net new order will need to be placed. During the upgrade, the billing term can be upgraded from monthly to annual but not from annual to monthly as that is considered a downgrade.</p>
<p><strong>Commitment terms</strong>: Changing commitment terms are available in upgrades. So, the platform does allow partners to go from monthly/annual commitments to annual/annual commitments as these are both considered upgrades. However, it is not possible to downgrade your commitment terms, so you cannot go from annual to monthly.</p>
<p><strong>NCE renewals</strong>: NCE subscriptions will automatically renew with the same commitment terms, billing terms, product, and seat count on the first day of a subscription’s renewal. If you need to make any changes to your subscription prior to the subscription’s renewal, you can do so by scheduling changes or cancellations with a future dated effective date. You can also make changes within the first 167 hours (about seven days) after the renewal has been processed.</p>
<ul>
<li>Seat decreases, increases, or product upgrades can be scheduled with a future dated effective date.</li>
<li>Product downgrades require a cancellation/repurchase.</li>
<li>Changing commitment terms or billing terms require a cancellation/repurchase.</li>
<li>Future dated orders will provision at midnight of the local time zone based on the user placing the order.</li>
<li>For same-day cancellations, the subscription will cancel immediately.</li>
<li>For future dated cancellations, the subscription will cancel at midnight UTC/5pm MT, regardless of the local time zone of the user placing the order.</li>
</ul>
<p><strong>Windows 365</strong>: Windows 365 monthly subscription terms were made available in the current CSP experience in August 2021 and in CSP new commerce in October 2021. In addition to the current monthly subscription terms, partners can now sell Windows 365 subscriptions on an annual subscription term. The annual subscription term is priced at a 10% discount compared to the monthly term. The same cancellation policy in effect for all other seat-based offers also applies to Windows 365 in new commerce.</p>
<p><strong>Nonprofit, Education, and Government</strong>: Nonprofit, Education, and Government licenses will not be offered on NCE at this time.</p>
<p><strong>Cancellations</strong>: For any new commercial seat-based subscription orders in CSP, new commerce will allow 167 hours (about seven days) for cancellations and seat reductions instead of the previous 72-hour window.</p>
<p>Please be advised that Microsoft will not consider requests from partners for exceptions to the seven-day cancellation and seat-reduction policy (unless the request involves a cancellation or seat reduction that could not be completed within the first seven days of the subscription term due to a Microsoft error). Examples of partner/customer scenarios that are not eligible for exceptions to the cancellation and seat-reduction policy include the following:</p>
<ul>
<li>Customer non-payment of subscription charges</li>
<li>Customer insolvency or bankruptcy</li>
<li>Customer requesting a change of partners midterm due to insufficient service/support from original partner, price considerations, or other reasons</li>
<li>Partner or customer having placed the subscription order by mistake</li>
<li>Customer company merging with or being purchased by another company after the seven days of the term</li>
<li>Local, country, or regional regulations allowing more than seven days for a consumer to cancel or return a product (e.g., the EU Consumer Rights Directive). [Note: CELA can provide guidance on this as needed]</li>
</ul>
<p><strong>Add-ons</strong>: Add-ons are purchased as individual subscriptions, distinct from the base product subscriptions, but still need a valid parent subscription in the Pax8 Marketplace. Therefore, the end dates may not be the same.</p>
<ul>
<li>Add-ons cannot be upgraded to NCE using the API upgrade tool. Add-ons need to be removed from legacy prior to upgrade and then purchased net new on NCE. Partners will see errors when attempting to purchase an NCE add-on product when the customer does not have a valid parent subscription.</li>
</ul>
<p><strong>Upgrades</strong>: For NCE, upgrading means going from one paid subscription to another paid subscription, but you cannot go from a higher-paid SKU to a lower-paid SKU.</p>
<p>In your subscription with Pax8, you will be able to see eligible upgrade options. You can process an upgrade at any time and choose either to do a full upgrade where all seats in a subscription are upgraded, or a partial upgrade where only a select number of seats you choose are upgraded.</p>
<p>Note: Upgrades, partial or full, do not open a 167-hour (seven-day) cancellation window. All upgrades are permanent actions on the subscription and cannot be undone during the term commitment.</p>
<p>Partial upgrades will have a new SKU and will continue to hold the original subscription’s commitment terms and date. Please be aware: the partial upgrade does not generate a new seven-day window to modify or cancel.</p>
<p>When processing full or partial upgrades, the upgraded licenses will have to be manually reassigned in the Microsoft 365 Admin Center.</p>
<p>2:1 upgrades, or upgrades consolidating two products to a premium product that includes all the features and functionality of the original two products, is not a current upgrade path offered by Microsoft. If you need to process a 2:1 upgrade, please contact your Pax8 account manager to assist you with getting a Microsoft support escalation started. Escalations can take around eight weeks to process by Microsoft, and a 2:1 upgrade must be approved by Microsoft before ordering the new product.</p>
<p><strong>Promotions</strong>: Many promotions have a maximum of 2,400 seats per subscription. In these cases, a transaction including more than 2,400 seats will be submitted at non-promotion prices. The seat limits from promotions are enforced across partners. Promotion eligibility is enforced at the subscription level that the partner is transacting.</p>
<p>Promotional pricing will not automatically be applied to MSRP as of May 2022. If you wish to apply promotional pricing to MSRP, you may edit the MSRP field to the promotional price. This may require an additional PSA re-sync.</p>
<p><strong>Trials</strong>: Trials on NCE will provision 25 licenses that are valid for 30 days and cannot be canceled. Trials will automatically convert to paid offers for the full 25 licenses, whether they are all assigned or not, and will not have trial alerts from Microsoft in the partner center. At Pax8, we will notify you of upcoming trial conversions at 14, seven, and one day before the trial converts. There are two conversion options:</p>
<p style=](https://www.pax8.com/blog/wp-content/uploads/sites/13/2023/05/microsoft-nce-incentives-comparison-table.png)
Automatic trial conversion:
-
- All 25 seats convert to paid offer, whether in use or not
- Paid subscription starts on the next day
- Term duration: Pax8 will renew on monthly terms*
- Billing cycle monthly
*Note: Pax8 made the decision to convert trials to monthly commitments over the Microsoft policy of annual commitments to better serve the customers and prevent unnecessary commitments.
Manual trial conversion:
-
- Trials can be converted to paid offers at any time during the trial period
- At the conversion point, the 167-hour (seven-day) cancellation period starts when seats can be reduced
- Partners can choose the same SKU or an upgrade
Please note: you can only have one trial per SKU per tenant.
Change of channel: As NCE stands today, change of channels will not be permitted outside of the subscription term renewal. Change of channel is only possible at the term renewal, within the three-day window.
This includes:
- Customer wanting to purchase through a different partner
- Partner wanting to purchase through a different distributor
- A partner moving from direct to indirect
For mergers and acquisitions, Microsoft will allow these to be exempt from the change of channel policy in the future, but as it stands today, the licenses must remain with the partner and provider from which they have been purchased.
Telco pay-as-you-go: Some license-based products include services with allocated calling plans. These typically come with per-license allocations for minutes per month. Previously, on the legacy offer, there was no way to enable service usage beyond the monthly limits, which resulted in customers needing to purchase communication credits. On NCE, if a telco offer is started, the partner can enable overages via consumption pay-as-you-go-over. To enable overages, a partner must have an Azure plan tied to the customer tenant. If the customer does not have an Azure plan, the partner will have to check out one prior to purchasing the telco offer. Once an Azure plan is enabled, the partner must open a Pax8 support ticket notifying Pax8 to physically enable the overages in the customer’s tenant.
Suspended state: Suspended state provides the opportunity for a partner to temporarily pause services for an end customer. Suspending services still requires the customer/partner to fulfill financial commitments and does not pause payment. If you would like to suspend a subscription, please open a Pax8 support ticket as Pax8 will need to perform this action for you.
New incentives and rebates
In October 2021, Microsoft launched incentives for Azure plan on NCE under the Microsoft Commerce Incentive program (MCI) for direct bill partners, indirect providers, and indirect resellers. In January 2022, they expanded their Microsoft Commerce Incentive program for direct bill partners, indirect providers, and indirect resellers for Modern Work and Dynamics 365 solutions. To ensure partners earn incentives and rebates on NCE transactions, partners need to register for the MCI program through their Microsoft Partner Center. Learn more about registering for MCI.
Dates and deadlines
October 14, 2021: Technical Preview 2 of NCE for Modern Work and Dynamics 365 was made available for all partners.
January 10, 2022: Pax8 launched Microsoft’s general availability of NCE for Modern Work and Dynamics 365 for indirect partners to offer to CSP resellers. Microsoft also offered two time-bound promotions to incentivize partners to migrate from CSP legacy to NCE. These promos were:
- 5% off annual subscriptions from January through March 2022
- Monthly subscriptions are available at annual pricing from January through June 2022.
March 1, 2022: Prices increased for the following products:
Enterprise:
- Office 365 E1: $10 (from $8)
- Office 365 E3: $23 (from $20)
- Office 365 E5: $38 (from $35)
- Microsoft 365 E3: $36 (from $32)
SMB:
- Microsoft 365 Business Basic: $6 (from $5)
- Microsoft 365 Business Premium: $22 (from$20).
Pricing was launched in USD — other currency conversions are available upon request.
Any annual subscription purchased prior to the price change will have that original price locked in for the commitment term.
Please reach out to your Pax8 account manager for more information.
March 10, 2022: All net new subscriptions for Modern Work and Dynamics 365 must be procured through the NCE Platform. Pax8 will no longer offer new subscriptions for CSP legacy.
June 28, 2022: Microsoft announced they would no longer enforce legacy renewals to NCE starting July 11, 2022.
Please note that this is only for existing subscription renewals, and new orders are not eligible for legacy subscriptions. The migration from legacy to NCE should still be a priority, as all legacy incentives will end on December 31, 2022, for commercial offers.
September 28, 2022: Business Voice Conversion to Teams Phone.
Microsoft has announced that Microsoft 365 Business Voice will reach end of life on September 28, 2022. However, Microsoft will be honoring commitments until their renewal date. So, customers currently on Business Voice can renew their Business Voice subscription until September 28 and continue to utilize services through the entire commitment term.
Once the Business Voice Subscription is up for renewal after September 28, 2022, subscriptions will need to be manually migrated to Teams Phone on NCE. Business Voice customers won’t be automatically transferred to the new licensing model.
Please note: not taking any steps to transition from Business Voice at the time of expiration of your customers’ Business Voice subscription can result in loss of service.
January 1, 2023: Incentives will only be available for NCE transactions (through MCI for commercial offers). Nonprofit, Education, and Government products will remain on legacy and continue to earn incentives as they do not have an equivalent offer on NCE. Any commercial add-on tied to a Nonprofit, Education, or Government base will also have to remain on legacy but will forfeit incentives.
The Pax8 approach
We always want to provide the best purchasing experience for our partners, and we are actively working to launch NCE for Modern Work and Dynamics when it becomes generally available from Microsoft.
If you are ready to purchase a new NCE subscription, you can locate NCE SKUs in the Pax8 Marketplace by searching “New Commerce Experience.” All NCE SKUs will have New Commerce Experience in the title. For example, the NCE version of Microsoft 365 Business Premium will be titled “Microsoft 365 Business Premium [New Commerce Experience].”
If you have an existing subscription you would like to upgrade to New Commerce Experience, you can log into the Pax8 Marketplace to edit that subscription. Once in the subscription, you will click the “upgrade” button. This will automatically transition the base license to an NCE subscription and suspend the legacy subscription.
For billing, Pax8 subscriptions will always renew on the first of the month, regardless of the term commitment date. However, this won’t align with Microsoft. The Microsoft term renewal will align with the subscription commitment term that was selected during checkout. If you purchase an NCE subscription mid-month, Pax8 will bill the partner for the prorated amount of month one plus all of month two on the next invoice.
Pax8 will require all customer NCE subscriptions to have one qualifying NCE base license for every NCE add-on, regardless of if the customer has a qualifying base license on the tenant purchased from another provider.
What’s next
The Pax8 Microsoft team will continue to update you as the NCE program expands. If you have any questions about Microsoft program changes, don’t hesitate to reach out to our team!
