Microsoft’s Cloud Solution Provider (CSP) program that enables partners to sell Microsoft products alongside third-party solutions to their clients continues to evolve in 2025. As part of its investment in the CSP program, Microsoft has been working to reduce licensing complexity and costs and to 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. In 2025, Microsoft introduced the NCE Partner to Partner transfer tool, allowing for mid-commitment transitions to support evolving customer needs.
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 to 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.
Microsoft resources
- Microsoft NCE Readiness gallery: Discover resources to help you learn more about NCE for CSP seat-based offers. (Note: You’ll have to log in to gain access.)
- Partner network: Find out what you need to know from Microsoft about the new commerce experience.
New Commerce Experience Subscription Tracker
To help simplify the management of NCE, Pax8 has developed an NCE tracker tool that helps partners manage their customer renewal dates.
This tool will be visible to primary partner admins, partner admins, technical reps and billing admins on the left navigation pane of the Pax8 Platform. The NCE tracker provides Legacy subscription renewal information that can support partners in determining when their business should move Legacy subscriptions to NCE. Additionally, the NCE tracker shows NCE subscriptions with renewals approaching in the next 30 days.
Legacy to NCE Migration
Beginning January 11, 2024, Microsoft began auto-migration of all commercial Legacy subscriptions to NCE on a subscription’s Legacy renewal date. The auto-migration transitions subscriptions with the following attributes:
- Subscriptions are transitioned to an annual commitment and inherit the existing Legacy subscription billing term of annual or monthly.
- Subscriptions are transitioned to the NCE version of the product and keep the same quantity.
- Subscriptions dependent on one another (base/add-ons) are migrated at the base subscription’s renewal date.
- Subscriptions have a seven-day (167-hour) window to make any changes.
- Subscriptions are provided with a new subscription ID and must be synced to PSA integrations.
Partners are highly encouraged to review their customers’ Legacy subscriptions in the Pax8 Platform and discuss a migration plan with them. Partners can self-migrate to NCE at any time using the upgrade button in each subscription and will be prompted to select commitment and billing terms. For customers who would like to be on a monthly commitment, monthly billing must self-migrate before Microsoft’s auto-migration or adjust the subscription in the seven-day cancellation window.
It’s important to note that customers who cancel their subscription with the NCE experience will move to a deleted status and will only have seven days to access their data, which is different from what was previously seen with Legacy SKUs.
In March 2024, Microsoft began to offer NCE SKUs for the public sector, which includes Nonprofit, Education and Government products. Microsoft auto-migrated existing Legacy subscriptions for the public sector at the corresponding renewal dates in July 2024.
What Does This Mean for You?
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.
Term options (promos not included)
- Commitment term: The duration of the Microsoft subscription commitments (monthly or annual).
- Billing term: The frequency of the billing (monthly, annual upfront or annual paid monthly).
With these new NCE licenses, you’re locked into the commitment term selected during checkout and can only cancel or modify within the seven-day (167-hour) modification window.
Options
Monthly commitment term: monthly billing with a monthly commitment.
- This term options at a 20% premium.
- The commitment and billing both renew each month.
- Partners can only modify in the seven-day modification window each month.
- Billing term option is monthly payment only.
Annual commitment term: Subscriptions are bound for the entire annual commitment and can only be cancelled within the first seven days from provisioning.
- Subscriptions can only be modified to increase seat quantity or upgrade to a higher product.
- Downgrades in seat quantity and product can only be changed or cancelled within the first seven days of provisioning.
- Billing term options are annual upfront payment or monthly billing payments.
- Monthly billing term with an annual commitment: partner is locked into an annual commitment but billed monthly. (This term option will incur a 5% premium for new orders and renews on or after April 1, 2025.)
- Annual billing term with annual commitment: partner pays upfront.
Triannual term options: Upfront or annual.
- Triannual term options are only available for eligible Dynamics 365 products.
- Pax8 will offer both upfront and annual billing terms for these commitments. Monthly billing terms will not be available for three-year commitments.
- Partners who wish to take advantage of the Microsoft Bridge to Cloud promotion must still submit a manual request to their Pax8 Account Team.
Changing Terms
Billing terms: Billing terms cannot be changed mid-commitment. The billing term can only be changed during an upgrade, or else it will need to be cancelled, 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.
Commitment terms: Changing a commitment term is possible during an upgrade. Partners can transition from annual commitments paid monthly to annual ones paid annually, as these are considered upgrades. But it’s not possible to downgrade your commitment terms, so you cannot go from annual to monthly.
NCE renewals: NCE subscriptions will automatically renew in the Pax8 Platform with the same commitment terms, billing terms, product and seat quantity on the first day of a subscription’s renewal. If you need to make any changes to your subscription before renewal, you can schedule changes or cancellations with a future-dated effective date. After processing the renewal, you can also make changes within the first 167 hours (about seven days).
Additional information:
- Seat decreases or increases and product upgrades can be scheduled with a future-dated effective date.
- Product downgrades require a cancellation or repurchase.
- Changing commitment terms or billing terms requires a cancellation or repurchase.
- Future-dated orders will be provisioned at midnight of the local time zone based on the user placing the order.
- For same-day cancellations, the subscription will be cancelled immediately.
- For future-dated cancellations, the subscription will be cancelled at midnight UTC/5pm MT, regardless of the local time zone of the user placing the order.
Nonprofit, Education and Government licenses: Nonprofit, Education and Government licenses started being offered in March 2024. For more information, see our blog.
Cancellations: New commerce will allow 167 hours (about seven days) for cancellations and seat reductions for any new commercial, seat-based subscription orders in CSP.
Please be advised that Microsoft will only consider requests from partners for exceptions to the seven-day cancellation and seat-reduction policy if 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 or customer scenarios that aren’t eligible for exceptions to the cancellation and seat-reduction policy include the following:
- Customer non-payment of subscription charges
- Customer insolvency or bankruptcy
- Customer requesting a change of partners mid-term due to insufficient service or support from the original partner, price considerations or other reasons
- Partner or customer having placed the subscription order by mistake
- Customer company merging with, or being purchased by, another company after the seven days of the term
- Local, country or regional regulations (e.g., the EU Consumer Rights Directive) allow more than seven days for a consumer to cancel or return a product (Note: CELA can provide guidance on this as needed.)
Add-ons: Add-ons are purchased as individual subscriptions, distinct from the base product subscriptions, but still need a valid parent subscription in the Pax8 Platform. So, the end dates may be different.
- Partners will see errors when attempting to buy an NCE add-on product if the customer does not have a valid parent subscription.
Upgrades: For NCE, upgrading means transitioning from one paid subscription to another but not downgrading from a higher-paid SKU to a lower-paid SKU.
In your subscription with Pax8, you’ll 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.
Note: Upgrades, partial or full, won’t open a 167-hour (seven-day) cancellation window. All upgrades are permanent actions on the subscription and can’t be undone during the term commitment.
Full upgrades will:
- Transition all seats to the new product
- Hold the original subscription ID, commitment term, billing term and end date
Partial upgrades will:
- Transition a specific quantity
- Start a new subscription ID for the product upgraded but will keep the original commitment term end date
Please note that if an upgrade to a product already has an active subscription on the customer tenant, the upgrade will start a separate subscription, meaning a customer could have two subscriptions with different end dates for the same product.
When processing full or partial upgrades, the upgraded licenses may need to be manually reassigned in the Microsoft 365 Admin Center.
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 get a Microsoft support escalation started. Escalations can take around eight weeks to process by Microsoft, and Microsoft must approve a 2:1 upgrade before ordering the new product.
Promotions: 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-promotional prices. The seat limits from promotions are enforced across partners. Promotion eligibility is enforced at the subscription level that the partner is transacting. Microsoft determines promotion eligibility after checkout, and if a subscription is eligible for promotional pricing, pricing will be adjusted in the Pax8 Platform shortly after ordering.
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.
Trials: Trials on NCE will provision 25 valid licenses for 30 days and cannot be cancelled. Trials will automatically convert to paid offers for the full 25 licenses, whether they’re 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:
Automatic trial conversion:
- All 25 seats convert to paid offer, whether in use or not.
- Paid subscription starts the next day.
- Term duration: Pax8 will renew on monthly terms.*
- Monthly billing cycle
*Note: Pax8 decided to convert trials to monthly commitments over the Microsoft policy of annual commitments to better serve the customers and prevent unnecessary commitments. Pax8 will convert trials to paid subscriptions for all 25 seats on a monthly commitment, with monthly billing on the last day of the trial.
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: On April 1, 2024, Microsoft released the Partner to Partner Transfer Tool. Partners are now able to transfer their NCE subscriptions between indirect providers (IP) and direct-bill (DB) partners. A transfer will not open a new seven-day modification window and will have to be approved by the current IP/DB and the new IP/DB.
To initiate a transfer to Pax8, partners must check out the “Microsoft Change of Channel” SKU, a $0 SKU in the Pax8 Marketplace. This will engage the Change of Channel process. If for any reason a customer needs to move their subscription away from Pax8, please contact your Pax8 Account Team for next steps.
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. A partner must have an Azure plan tied to the customer tenant to enable overages. If the customer does not have an Azure plan, the partner must check one out before 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.
Please note that toll-free numbers are not eligible for overages to be enabled.
Suspended state: Suspended state allows a partner to temporarily pause services for an end customer. Suspending services still requires the customer or partner to fulfill financial commitments and does not pause payment. If you want to suspend a subscription, please open a Pax8 support ticket, as Pax8 will need to perform this action.
Dates and Deadlines
April 1, 2025: Starting on this date, Microsoft will implement a 5% premium for all NCE subscriptions with annual commitments paid on a monthly basis for new subscriptions and at existing subscriptions renewal. This change impacts businesses choosing to spread payments over the year, rather than making a single upfront payment. For those managing budgets and planning IT expenses, this new premium may factor into decisions around subscription commitment and payment structure. Additionally, this premium will also apply to three-year subscriptions paid on a monthly basis.
The Pax8 Approach
We always want to provide the best purchasing experience for our partners. If you’re ready to purchase a new NCE subscription, you can locate NCE SKUs in the Pax8 Platform 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 Platform 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 will not 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.
Learn how to migrate your clients from Microsoft’s Legacy program to the New Commerce Experience in the Pax8 Platform with just a few clicks.
If you’re an MSP looking to transition from your existing commitment terms to new commitment and billing terms or have Legacy add-ons complicating a direct upgrade to NCE, watch the video below.
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.
