Microsoft changes pricing & conditions for Microsoft 365 services
With the Microsoft “New Commerce Experience” Microsoft is on a transformational journey with its commerce experience for seats based licenses. Goal is to make transactions easier. Nowadays customers have the option to purchase licenses directly, through CSP partners like Universal IT or by purchasing a volume licensing, Open or EA contract. General conditions & term vary per program, making it difficult to understand all the differences. In the New Commerce Experience there is just one Microsoft Agreement that is applicable for all customers, replacing complexity, renewal cycles and paperwork with a streamlined digital process.
The New Commerce Experience is meant to make life easier. This New Commerce Experience was already implemented for Azure Services. Here at Universal we have succesfully migrated the “legacy” Azure subscriptions to the new Azure Plan in this New Commerce Experience. And indeed; that does makes life easier. for us; but especially for our customers – providing realtime insights in costs and making it easy to transact.
Now it is time to transform the Microsoft 365 Services. That comes with some changes. This is how we can help you get the best possible experience.
Summary of main changes to seat based offers
The changes apply to seat-based offers only; subscriptions per seat for one user. Those offers include Microsoft 365, Windows 365, Dynamics 365 and Power Platform. Below is the list of changes we believe are the most relevant for our customers.
- Default contract term remains 1 year but early cancellation is no longer possible
- Price increase for monthly commitment +/- 22%
- Options for monthly, yearly and 3-yearly subscriptions, subscriptions can be mixed – we would advise you to purchase yearly licenses for your key team and monthly licenses for your flexworkers.
- Trial subsriptions will automatically convert to a yearly (payed) subscription after 30 days since the default setting for trials is “autorenewal turned on”! Please make sure you turn off auto renewal when activating a trial license.
- The enddate for your subscribtion will be aligned per product item – meaning that the enddate for your subsribtion (per product) will always be on the same date.
- Adding licenses or upgrading licenses can be done anytime – the enddate for the new amount of licenses will remain the same.
- There is a 72 hour cancellation window after purchasing licenses. Universal can modify the number of seats, increase, decrease or cancel within 72 hours after purchasing.
- Downgrading or early cancellation of your subscriptions is no longer possible (once migrated to this new plan).
- Open licensing will be phased out. Current contracts remain in place but cannot be renewed by enddate.
- Microsoft announced a price change for a large amount of subscriptions as from March 1 2022.
- Add-on licenses are listed alongside the base offers in the catalog, therefore (finally) easily discoverable.
- Monthly pricing for Microsoft Cloud PC will remain similar to yearly pricing (so our advise would be to purchase montly subscriptions for Cloud PC).
Next steps and how Universal can help you to save money
The new subscriptions are generally available in January but CSP partners like Universal IT can already provide the licenses today, we will add the new license types to the Universal Customer Portal in the upcoming weeks. There is no benefit for you to switch immediately, but we do advise to work with us to provide the best possible offer for next year (starting January).
1: Define your ideal mix for yearly & monthly subscriptions
Yearly subscriptions are most cost effective but cannot be cancelled early, therefore it is key to determine how many fixed licenses you would need to purchase and which users could better use a monthly license (flexworkers). Yes, monthly subscriptions are indeed more expensive, but unused yearly licenses might be even more expensive.
2: Review your license types; planned upgrade? Consider doing it now!
Save money by upgrading now – and avoid the upcoming price increase next year. There are multiple interesting incentives.
3: Ask Universal to provide you with a quote
There are some interesting incentives that might save you lots of money! Universal will reach out to all of her Microsoft 365 customers to discuss options and to make sure you have the best pricing / package.
4: Make sure you transact before March 1 2022
The announced price change (10-15% increase) will effect licenses bought after March 1 so it is wise to purchase your yearly licenses before that day (then there is a pricing lock in for that entire term.