This post was last updated November 16, 2022.
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.
- 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.
Click here to open the NCE Tracker in the Pax8 Marketplace. You can also 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. Additionally, 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.
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.
Dates and Deadlines
October 14, 2021: Technical Preview 2 of NCE for Modern Work and Dynamics 365 will be 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 will also offer two time-bound promotions to incentivize partners to migrate from CSP legacy to NCE. These promos are:
- 5% off annual subscriptions from January through March 2022
- Monthly subscriptions will be available at annual pricing from January through June 2022.
February 1, 2022:Margin and incentives will be removed from the Azure Program.
To retain margin and earn incentives, all Azure Program subscriptions must be upgraded to Azure Plans by January 31. As of February 24, Pax8 will upgrade all remaining Azure Programs to Azure Plans. For more information, please see our Guide to Azure blog post.
March 1, 2022: There will be a price increase for the following products:
Office 365 E1: $10 (from $8)
Office 365 E3: $23 (from $20)
Office 365 E5: $38 (from $35)
Microsoft 365 E3: $36 (from $32)
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.
Please reach out to your Pax8 account manager for more information.
Please note, Microsoft is NOT changing pricing for Microsoft 365 E5, Microsoft Business Standard, or the Frontline SKUs. Please note that this price change does impact all public sector customers worldwide.
March 10, 2022: All 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.
July 11, 2022:On June 28, 2022, Microsoft announced they would no longer enforce legacy renewals to NCE starting July 11, 2022. Microsoft is now concerned about the customer experience for those who did not act and were left without service, which is why they have decided to provide partners with more time to convert their customers to NCE. Pax8 will not auto-convert legacy subscriptions to NCE three days before their Microsoft legacy renewal date.
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.
On June 29, 2022, Microsoft announced the extension of the conversion from Business Voice to Teams Phone from July 1, 2022, to September 28, 2022. Customers currently on Business Voice can renew their Business Voice subscription until September 28, 2022, 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 migrated to Teams Phone on NCE. Business Voice customers won’t be automatically transferred to the new licensing model. Transition guidance is provided in Move from Business Voice to Teams Phone licenses for customers who need to change their Business Voice licenses to the new licensing model. Note that not taking any steps to transition from Business Voice at the time of expiry 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.
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. You can expect:
- Monthly term options at a 20% premium
- Annual term options: upfront or monthly payments
- Triannual term options: upfront, annual, or monthly payments
Please note that not all SKUs will have a monthly term option. Triannuals will only be available starting January 10, 2022, for some Dynamics 365 SKUs. Triannual availability for Modern Workplace SKUs purchased through Pax8 will be announced later.
Additionally, to encourage partners to migrate to the New Commerce Experience, Microsoft will offer two time-bound promotions to coincide with the January general availability launch; annual subscriptions will be discounted 5% from January to March, and monthly subscriptions will be discounted at the regular annual price from January to June.
These two promotions will apply to all new commerce seat-based commercial offers for subscriptions of up to 2,400 seats. Windows 365 subscriptions will not be eligible for these two promotions.
**Not all products will be eligible for the two introductory promotional offers.
Windows 365: Windows 365 monthly subscription terms were made available in the current CSP experience in August 2021 and in CSP new commerce in October 2021. Effective immediately, 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 applies to Windows 365 in new commerce in effect for all other seat-based offers.
Nonprofit, Education and Government: Nonprofit, Education, and Government licenses will not be offered on NCE at this time. Nonprofit and Education products will not be affected by the price increases in March.
Cancellations: For any new commercial seat-based subscription orders in CSP, new commerce will allow 167 hours for cancellations and seat reductions instead of the previous 72-hour window. This change is intended to provide partners with additional time to make post-purchase corrections to orders. Charges for cancelled subscriptions or seat reductions will be prorated from the time the subscription is created until it is cancelled, or seats are reduced.
Add-ons: Add-ons are purchased as individual subscriptions, distinct from the base product subscriptions. Therefore, the end dates may not be the same. Add-ons cannot be migrated to NCE using the API upgrade tool. Add-ons need to be removed from legacy prior to migration and then re-purchased on NCE. Partners will see errors when attempting to purchase an NCE add-on product when the customer does not have any of the prerequisites.
Upgrades: 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. 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. Upgrades, partial or full, do not open a 167-hour cancellation window. All upgrades are permanent actions on the subscription and cannot be undone during the term commitment.
When processing full or partial upgrades, please note that upgraded licenses will have to be re-assigned 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 assist you with getting a Microsoft Support Escalation started. Please note that escalations can take around eight weeks to process by Microsoft, and a 2:1 upgrade needs to be approved by Microsoft 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-promotion prices. The seat limits from promotions are enforced across partners. Promotion eligibility is enforced at the subscription level that the partner is transacting.
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 licenses that are valid for 30 days and cannot be cancelled. Trials will automatically convert to paid offers and will not have trial alerts from Microsoft in the partner center. At Pax8, we will notify you of upcoming trial conversions, and there are two conversion options:
Automatic Trial Conversion:
- All 25 seats convert to paid offer
- Paid subscription starts on the next day
- Term duration: Pax8 will renew on monthly terms
- Billing cycle monthly
Manual Trial Conversion:
- Trials can be converted to paid offers at any time during the trial period
- At the conversion point, the 72-hour cancellation period starts when seats can be reduced
- Partners can choose the same SKU or an upgrade
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.
- 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-Over-on-Azure: 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, and starting January 2022, will expand 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 will need to register for the MCI program through their Microsoft Partner Center. Learn more about registering for MCI.
More information on these earning opportunities will be available our Pax8 blog upon Microsoft’s release, so keep checking back!
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.
Invoice 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.
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!