Many organisations buy their licensing from a Microsoft Cloud Solution Provider (CSP). CSPs have the best access to discounted licenses direct from Microsoft and provide licensing support and expertise to help ensure you are on the best license for your business.
Microsoft has changed the way the CSP program works which will impact every organisation currently using it. The latest evolution of the CSP is now called the New Commerce Experience (NCE).
Current CSP set up
The CSP program is where you would buy all of your cloud licenses. From Microsoft 365, Dynamics 365, Windows Server, SQL Server, Power Platform, Windows 365 and more.
Current CSP rules allow organisations to benefit from discounted licensing and full flexibility. Discounts normally in the range of 10% off RRP are generally available. You have to sign up for a 12-month contract but during that period you have the ability to add or remove licenses. For example, if you have 100 M365 licenses you can change that from 1 to as many as you need throughout the 12-month period as standard.
This offers organisations a huge range of flexibility and savings across their Microsoft stack.
New Commerce Experience explained
There are a couple of new options becoming available for customers.
- Option 1 – Annual Subscription
This option is the closest option to the existing program. You sign up for a 12-month contract and you can still get the same discounts you are used to. The only change is you do not have the flexibility to reduce the number of licenses you have during this time. If you buy 100 M365 licenses you will have to pay for them for the full period even if you do not need them. - Option 2 – Monthly Subscription
For the first time you can buy Microsoft licenses on a truly monthly basis. No annual commitment is required, you can add or remove licenses or cancel completely at the end of each month. The catch is this flexibility will come at a 20% price premium.
- Option 3 – 36-month subscription
This option is the same pricing as the annual subscription but locks you in for 3 years. The main benefit of this route is you will lock in the current price of licenses. If your employee numbers and licensing needs are fairly stable or only growing then this could be a good way of saving you from any cost increases for the period.
When will the New Commerce Experience come into effect?
There are two key dates for anyone taking consideration for the New Commerce Experience. Officially the new commerce experience launches on the 10th of March 2022.
If you are an existing CSP customer renewing an existing license, then you can still do this via the legacy route until 30th June 2022.
Overall, the CSP program is changing and the New Commerce Experience offers some challenging decisions for customers. A strong understanding of your licensing needs and how they might change over the next 12 to 36 months is needed before any decisions are made. Organisations will likely need to choose between flexibility and price going forward. It is worth noting that you could consider a mix of all three for different groups.
If you would like to discuss your Microsoft licensing needs and the NCE please contact us today.
