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Artichoke
Level 6 Contributor

NCE tone deaf?

If this forum isn’t the place for this discussion, please direct me to where to give feedback/have my concerns addressed. 


I’m having a hard time understanding the  “New Commerce Experience’ and perhaps someone with MS or a better understanding  could clarify. It seems as though NCE is very pro-Microsoft while being anti-customer and very much anti-partner. 

I can understand some of the aspects of NCE. For example, the enforcement of monthly pricing premium vs yearly pricing (paid monthly) makes sense. Is it pro-customer? Absolutely not, but it’s technically been the agreement presented to endusers for years. 

 

The 72 hour cancellation window? That’s just draconian. The auto-renewal for a YEARLY term on trials? That’s just going to anger customers and funnel wasted enduser money to MS. The inability to migrate between CSPs (read as MSP) during the year term? Wait? You mean the MSP that was fired for cause is the only company that can service the enduser’s existing licenses? And that same CSP/MSP has the ability to disable a tenant?

 

Not to bury the lead, but why is it the Partner’s responsibility to pay off a term if an enduser does not/cannot pay? If a Partner cannot repurpose the licenses to another tenant, why on earth would those licenses be the responsibility of the Partner? The margins do not seem to justify the obligation being foisted on Partners. 

I love being a Microsoft Partner. I love the stack. Until NCE I loved the flexibility of CSP.  It *was* always such an easy sell. And a joy to manage. Never having to worry about anniversary hell. Just add and remove anything a client needs when the need it.

 

So it’s with the utmost sincerity that I ask, how is it the Microsoft partner’s responsibility to act guarantor for our clients and/or as collections for Microsoft?

 

My hope is Microsoft corrects course before NCE is enforced. One can always hope. 

75 ACCEPTED SOLUTIONS
lawtonma
Level 6 Contributor

As you articulate very well, the #1 issue for us (and the majority of partners I talk to) is the liability that falls with us if a customer goes bust. This is obviously much more of a concern with the 36 month contract (if we ever get the details!). We cannot even re-sell that pool of licenses to another customer - crazy. Microsoft might tell us to ensure we credit check all customers - do they think that we do not already do that?

 

We had a UK construction company with a great credit rating go into administration in 2021 with 150 seats - thankfully there was no NCE at the time. 

 

As always the partners have to be the bearers of bad news - and however positively we try to spin this with customers there is zero upside for customers other than possibly locking your price for 3 years - considering this is the first major price increase in 10 years that is unlikely to be required. As I say, the bottom line, if a customer wants to retain their monthly flexibility that they have now, is up to 50% compound increase as per the table below (the UK£ prices are estimated as we dont have them yet!)Screenshot 2022-01-28 143455.png

lawtonma
Level 6 Contributor

Which is probably OK if you are a large LSP, Disti or CSP with dedicated Teams of people - but if you are an SMB partner it is a massive overhead, especially as the pricing and catalogue are still not complete.

 

Lets hope we get all of our answers on 1st Feb......

aroasdo1234
Level 6 Contributor

We're SMB.  We are not huge, 15 employees, about 200 CSP Customers. Microsoft gave six months notice about this. We heard from many partners that they were hoping it would just go away or Microsoft would change their mind. 

 

We are planning on offering a consulting engagement for other partners that would like our assistance in helping them plan the transition to NCE. If anyone is interested let me know.  Direct CSPs only. 

 

Indirect resellers: You need to work with your distributor. 

lawtonma
Level 6 Contributor

We are a direct CSP - and we do understand what needs to be done, but that does not make the 50% compound price increase for an E1 any easier for our customers to swallow. Plus the fact that WE are ready - that is not quote the same for either Microsoft Partner Centre (still gaps) and some of the provisioning platforms (still huge gaps) who have clearly not been given enough time by Microsoft or have not realised the amount of work involved.

 

chris-dit
Level 4 Contributor

I'll agree that is looking a big headache already; I was looking at a customer earlier with Business Basic, Business Standard, a couple of O365 E3, a handful of Visio licences plus some other SKUs like ATP and archiving; I think I worked out 6 SKUs in total with 6 different subscription end dates; now under legacy that wasn't and issue, you could suspend a subscription and stop the billing and whilst yes we could bodge it by suspending the existing subscriptions now and start 6 new ones under NCE all at the same time its a short term fix as over time other SKUs are going to get added and the same will probably happen again.

JanoschUlmer
Microsoft

@chris-dit : Thank you for this feedback, you certainly make some good points and I agree the co-timing of the general price increase with NCE changes adds up to the overall challenge communicating changes to customers. 

Note that any pricing change will only affect customer at time of renewal - so unless your customers have an renewal date right on March 1, they will only be charged (respectively you will be charged) with the new pricing later, which extends the time you have to communicate this pricing change. Pricing is fxied throughout the contract therefore (Contract=Subscription term from Microsoft perspective) - From my conversations with Partners I see that because of this it gets much more important to make it transparent to the customer what the subscription term is - many Partner were used to set up custom contract duration, not aligned to the "real" subscription term which is of course challenging in this situation - therefore I'm looking forward to the upcoming option to provide co-terming of different subscriptions. 

Same for the NCE changes - since legacy subscriptions might exist until June 30, 2023, depending on the specific renewal date of course (for 36-month legacy Dynamics SKUs the definitive end date might even be June 30, 2025). 

Many Partners are currently considering either an early renewal of legacy subscriptions before the march price increase, or a migration to NCE annual term (with the option to start a new term) before March 1 to secure the old price for another year +  plus getting the 5% discount for a full year.

 

I would be interested to know more about the ambiguities reg. the timeline examples - if there is something not year I will certainly try to clarify it, maybe my above example does already clarify things that pricing and promo terms are always applied throughout the subscription term, even for seats added later to those subscriptions.

 

Reg. when new prices will apply to Web Direct - this will happen on the same day. The new pricing will apply to all agreements types - CSP legacy, NCE, Web Direct, EA, for all customers starting a new agreement/subscription term on/after March 1.

When NCE will affect web direct (Or more exactly the "self-service sales motion", when using NCE wording) - there is no concrete ETA I can mention, customer signing new agreements in self-service will probably see that they now agreement the MCA instead of the MOSA  around end of H1, 2022. For EA, respectively then MCA in the "Enterprise Motion" NCE changes will come later. Also exact dates for non-profit, Education customers are not available yet.

 

On the question around trials - totally agree that this new behavior now requires partner to do an additional step when provisioning trials - after provisioning set "Auto-Renew" to off to avoid this is transitioned automatically. And your assumption is correct that when trial converts to the paid license, it will be at the price applicable at the time of transition, not when the trial has started

Kind regards, Janosch
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lawtonma
Level 6 Contributor

Janosh - are you the only person in Microsoft that is actually tasked with helping partners navigate through this? It seems like it.

 

The fact that we only have 25 days to go until the 1st March deadline, we only had UK pricing 3 days ago and that pricing is still incorrect (no Business Basic or E5 increase shown) doesnt give us a great deal of time or confidence to deliver clear messages to our customers

lawtonma
Level 6 Contributor

Oh - and Partner Centre was down yesterday!

chris-dit
Level 4 Contributor

Yep... makes it interesting trying to cancel NCE subscriptions within 72 hours - subscriptions we want to cancel because they orders from Monday evening show as Tuesday so 1st February!

JanoschUlmer
Microsoft

@chris-dit : Thanks for calling this out, yes, agree the example is not well chosen because of the price increase happening in parallel, if it would be e.g. a Dynamics offer it would be technically correct. Will report it to the document owners.

 

 

Kind regards, Janosch
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lawtonma
Level 6 Contributor

Janosh - any sign of the much discussed 36-month agreement? Certainly not there in partner centre at the moment?

 

lawtonma_0-1643965615450.jpeg

 

ncdlloyd1
Level 4 Contributor

We were expecting the 36 month term in the March pricelist preview. We've raised this with our account manager and the response is that it's an "identified issue" and that Microsoft are working on adding the 36 month term to the pricelist.

 

Someone else from Microsoft told me he expected to see it in the pricelist from March 10th.

lawtonma
Level 6 Contributor

It really doesnt give us much time to ensure this is all working - plus if it is in the pricelist from 10th March that does not enable a customer protect themselves from the price increase. Of course that may well be deliberate..........

ncdlloyd1
Level 4 Contributor

I always expected the 36 month term licenses to be available post price increase...

JASA1976
Level 6 Contributor

If you go through all of the communities it seems that Microsoft only have a small number of people that actually administrate and respond to any issues and topics raised. If you look on the UK Partner Zone you'll see the same few representatives, and I even half jokingly commented that the only person from Microsoft on there was from Germany.

lawtonma
Level 6 Contributor

I didn't - so probably good that you hadn't set expectations!

v-jillarmour
Community Manager

Hello @JASA1976  🙂

 

This is how the community is set up to be. There is a moderator to manage each community, when questions are raised by partners they help guide them to online recourses or connect them with a subject matter expert to answer questions. This is not meant to be a customer support forum. I hope that helps clear up any confusion. 👍

 

Please make use of the resources found here.

aroasdo1234
Level 6 Contributor

Any real issues/problems you should go create a support ticket. That is how real changes happen. Until support sees a spike in tickets around a problem, it is hard to justify making a change.  Metrics required. 

JASA1976
Level 6 Contributor

No ideas where you are getting this about issues that actually require support, but just to add to your suggest yes if someone does then raise a support ticket and then go use google to search for the answer as its going to be a lot quicker that Microsoft support.

v-jillarmour
Community Manager

@JASA1976 oh! I didn't mean to imply that you thought it was a customer service forum, I was just trying to clarify to everyone on the string how it works. 🙂 👍

lawtonma
Level 6 Contributor

As there is no forum for partners to raise concerns with the people behind NCE this is the best we have

RupertDavey
Level 6 Contributor

I'm just pleased this "NCE Tone Deaf" thread is alive and kicking with 28,000 views and 180 comments... plus 19 "Accepted Solutions" despite NCE being anything other than "Accepted" by the vast majority of partners. 

 

 

chris-dit
Level 4 Contributor

I'm just waiting to see how long it is until we find out how well this nightmare 72 hours cancellation policy works when there's a service outage to partner center towards the end of that period... not that such a thing would ever happen of course... 😀

VNJoe
Level 5 Contributor

I appreciate this rundown.  It's concise and focused on the major impact points, and I know you're doing your best all by yourself out of the 260,000 employees at your organization.  You always do.  It's unfortunately that you're only 1.

Here's my final stance:  If Microsoft makes the Customer Agreement include all of this information and require EVERY customers to sign all these documents between now and March 1 (not just Direct Providers), it will go A LONG WAY in securing we're not going to be suffering losses here with this change.

 

My indirect provider is one of the largest and even THEY can't provide us with any legal documents we need to limit our liability with customers who up and walk out of their subscription.  Microsoft can bear that burden to get the end user's e-signature for every O365 user, not have partners testify the customer signed off as is the current situation.

 

The other items here are relatively doable, but not having the pricing earlier and completely understood during a year end and attempting to get all my customers on-board with a small service provider that I am while attempting to grow my business and fight through how each day the administrative console gets worse instead of better is a lot.

They should not have slammed all these additions onto Office 365 that aren't functioning properly at a time when they are transitioning.  It' too much for a short window of time.

 

I'm doing my best, have contracts for customers to sign, clearly noting that MICROSOFT is requiring these changes and we are FORCED to push them to sign legal documents to protect our business, that they understand cancellations will have penalties, and binding to arbitration instead of court systems (whatever that means, I just learned that myself because I HAVE to...)

Please, partners, protect yourself from this mess and get legal assistance to get your paperwork in order before Microsoft collects debts that get dumped on you from clients who stop paying...

lawtonma
Level 6 Contributor

To be honest - to paraphrase Satya's famous quote - "Microsoft do not value innovation, they only value scale" (sic).

OndrejV
Level 3 Contributor

there is more like this: "Satya Nadella in 2019: Microsoft has always been a partner-led company, and we are committed to creating more opportunity for our partners across our businesses."

aroasdo1234
Level 6 Contributor

We have built great relationships with MS Support staff after the years we have been a CSP and in ASfP. I know for a fact, change doesn't happen inside Microsoft unless there are metrics to support it. The support tickets is our way to do that. You want Microsoft's attention? have 100,000 partners submit a ticket about the problem. Change can happen. 

 

aroasdo1234
Level 6 Contributor

Well then nothing will ever change. 

VNJoe
Level 5 Contributor

It's simply that Partner 'Support' is Majorel this year, Concentrix last year, and others before that, changing year to year because the support is so miserably slow and out of my time zone.  You get a response a day if you're fortunate because their ticketing system reminds them to reply to a ticket.  Support for many cloud vendors has become moot where we are responsible to customers within hours for a ticket and sometimes won't see a ticket resolved for months.  And Microsoft's stance is 'Must be the support providers, we'll go get new ones..' instead of actually supporting the Partner community directly except for these Community forums which go largely ignored except a few diligent support advocates who always help out the community...

 

Remember 800 MPN-SOLVE? Those were the days...

 

And yes, Microsoft took all the bad stuff from their Enterprise Agreements, put it in a blender, then made sure the heaviest stuff made it into these new agreements (like Audits...) just to appease legal.  And due to COVID, they can't really get together and discuss the reality of this, nor test it out in any meaningful way, so the 'plan' (much like Windows 11) is to throw it out in to the wild and let the people sort out the bugs.

 

I think March and April are going t painful for those partners who haven't been paying much attention to all this... it's the reason I'm putting so much effort into really grasping the situation so I can be prepared for it, because I don't think Microsoft is going to back off of this much due to the swiftness they've had implementing it and a general belief that if a Partner doesn't do it right, the customer can just come direct...  and they will... it's an efficient yet ruthless path to ultimately carving partners out of deals. Preparation is key to preventing that, but a year is a looooong time to pay off a deadbeat customer's contract without the income from them to support it, period.

lawtonma
Level 6 Contributor

We have paid very close attention - and we are ready. But its still going to be painful!

Kind regards,
Mark Lawton
Business Development Director
+44 (0) 1492 862780
mark.lawton@riscitsolutions.com
www.riscitsolutions.com
Risc IT Solutions Ltd, Church Walks Business Centre, Church Walks, Llandudno, LL30 2HL, UK.
​​VAT Number: 797553664, Company Registration Number: 03935051
lawtonma
Level 6 Contributor

Interestingly we have just had our February Commercial Partner Newsletter - not one single mention of NCE that I can see.......

 

lawtonma_0-1644332683267.png

 

aroasdo1234
Level 6 Contributor

Remember that NCE is about the transaction and billing.  While it strongly affects us as partners, NCE isn't part of the Partner Program. 

 

lawtonma
Level 6 Contributor

It is a core part of how partners interact with Microsoft so cannot just be glossed over......as much as people would prefer to.

aroasdo1234
Level 6 Contributor

I wasn't implying that it should be glossed over. But you do have to take into consideration that MPN is separate from CSP and NCE.  

heardy211
Level 2 Contributor

Literally the biggest headache for CSP's

 

Whilst i understand a price increase is probably justified, what i can't understand is why the liability is being passed to the smaller CSP's.

 

Seriously tempted to now to look at purchasing Office 2019 perpetual on the smaller sites, and then changing their office licenses to exchange plan1. most of our sites would'nt even notice the difference anyway.

 

That way, removes the headache with licenses, plus gives us more margin. 

aroasdo1234
Level 6 Contributor

That would only work if you sold them perpetual licensing every 2 years. Otherwise the margins don't play out right. Are you direct csp or indirect reseller?

 

It's a head ache, but a temporary one. We completed our first batch of clients moving to NCE (about 60 of our 200 customers).  All went well, most annual paid annual. 

 

PIA, definitely, but soon it will just be how you transact with Microsoft. 

lawtonma
Level 6 Contributor

Quote from a customer today "I cannot see any upside in this for anyone.......other than Microsoft"

P1ChrisH
Level 3 Contributor

That's pretty much all there is to this... Tell them to buy Microsoft stock, then they'll see some of the upside. 😁

lawtonma
Level 6 Contributor

Is that what is known as "Hedging" 😁

lawtonma
Level 6 Contributor

Fair enough - we have found that our customers (primarily SME) prefer the monthly subscription model, although now that we are removing the flexibility to drop seats when needed (sorry not removing, I mean charging a premium) that may go away. 

aroasdo1234
Level 6 Contributor

The thought is you don't download it anymore but just provide the link to your customers. We did that last year and people were fine with it. Most peoplpe don't read it, but are happy to just have access to it if needed. 

lawtonma
Level 6 Contributor

We can certainly do that yes although I’m not sure there is any interest in anything else at the moment

Kind regards,
Mark Lawton
Business Development Director
+44 (0) 1492 862780
mark.lawton@riscitsolutions.com
www.riscitsolutions.com
Risc IT Solutions Ltd, Church Walks Business Centre, Church Walks, Llandudno, LL30 2HL, UK.
​​VAT Number: 797553664, Company Registration Number: 03935051
LDrake
Level 3 Contributor

I'm literally having to completely resell and reexplain to every one of my customers why they have the licenses they have, who has them, what they're using for. Customers who otherwise would have just let licenses ride are reducing licenses pre-re-up for the year because now they have to think about it. I've had at least one customer tell me that "since I won't be flexible about billing" they're going direct to Microsoft (as if they think THEY'LL be flexible about billing).   Customers all feel like changing the prices on the subscriptions is a shakedown and that Microsoft is doing this as retaliation to punish those that carefully managed license counts during pandemic layoffs.  They of course blame the draconian rules about license counts and non refundability on me, like it's my fault (which it is because that's the way I had to rewrite MY contract with THEM).  Microsoft is going to lose SO MANY LICENSES over this. It's just.... ridiculous.   Raise the prices? Ok I can explain that. Going to only one year contracts. Can't explain how that's a benefit to anyone but microsoft. Can't cancel. Can't explain that either. Can't modify down after 72 hours. Can't explain. On top of that my indirect provider has a crappy interface that is NOT handling this well (Tech Data) with 1 out of 3 transition attempts to NCE needing support intervention. With less than a week to convert another 50 tenants I'm dreading this entire thing blowing up in my face and not being able to get them all converted in time. We literally didn't really get serious notice of this till December, there was no way to try out the interface or order licenses till Mid January, and we weren't trained on how to do it till end of January. Which left us one month to perform sales on dozens of clients for no additional dollars. Thanks Microsoft. Thanks a lot.  I've been doing this since BPOS and let me tell you this is the WORST transition yet.  I've basically wasted an entire month of sales time on losing licenses that I would have otherwise had paying me, while obtaining no new business because this consumes all the air in the room.

HandyITAndy
Level 5 Contributor

We're experiencing exactly the same scenario - a nightmare. We've communicated the changes in advance to all of our customers, but this seems to have made little difference to the impact that this is now having. As an exercise in damaging customer relationships this has to go down as one of the "best yet". We're also battling with Covid absences and an increasingly disheartened staff team. Like you @LDrake I'm really not sure that we have the time/capacity to get this completed by the end of the month...

aroasdo1234
Level 6 Contributor

It’s a shame that you’re having a bad experience. But I can tell you that is mainly in part to your indirect provider. We are fortunately a direct reseller and have had zero issues. We have about 60% of our customers converted, the rest will be completed by Saturday. No issues, no complaints, all converting as expected.

HandyITAndy
Level 5 Contributor

Apologies for not differentiating, the issues we're having are not with our reseller, more specifically:

  • Completely resell and reexplain to every one of my customers why they have the licenses they have, who has them, what they're using for.
  • Customers who otherwise would have just let licenses ride are reducing licenses because now they have to think about it.
  • Raise the prices? Ok I can explain that. Going to only one year contracts. Can't explain how that's a benefit to anyone but Microsoft. Can't cancel. Can't explain that either. Can't modify down after 72 hours. Can't explain.

Painful, time consuming and adding friction into otherwise good customer relationships. And this is despite having emailed notice of the changes well in advance and as clearly and concisely as we could.

lawtonma
Level 6 Contributor

Whatever the justification Microsoft spin this with - the fact is we have turned 2 months selling time into 2 months admin time. Complete shambles.

aroasdo1234
Level 6 Contributor

NCE was announced in Sept, so it's been six months. Countless meetings, blogs, trainings, the ops guide. The list goes on. New commerce experience for seat-based offers in Cloud Solution Provider - US Partner Community Blog - Microsoft

 

I saw a report in January that of the top 20 Indirect Provides, only 2 said they were ready. Now they are scrambling and trying to get things rolled out.  There is a light at the end of the tunnel. 

 

One suggestion I can give you, if your provider supports it, is to renew customers in legacy now. That will give you time to make the NCE transition. Renewing in legacy gives you another 12 months with the current functionality, and more importantly, current pricing. Some of are larger customers that were not ready for the annual commitment we are able to delay their conversion to NCE by renewing legacy. 

lawtonma
Level 6 Contributor

Unfortunately that doesn’t work for existing customers cause you cannot have two legacy subscriptions for the same products unless it’s with another provider therefore that’s why we’ve seen a lot of predatory activity

Kind regards,
Mark Lawton
Business Development Director
+44 (0) 1492 862780
mark.lawton@riscitsolutions.com
www.riscitsolutions.com
https://bit.ly/MarkLawtonRisc
Risc IT Solutions Ltd, Church Walks Business Centre, Church Walks, Llandudno, LL30 2HL, UK.
​​VAT Number: 797553664, Company Registration Number: 03935051
aroasdo1234
Level 6 Contributor

Oh. Sorry. As a Direct CSP, we have the ability. ☹️

DeanJones
Level 4 Contributor

the worst thing for me isn't any of the missing codes, prices lists or 36 month term availability, I could deal with idiosyncrasies. Its the absolute whole pub test thing: this isn't a Microsoft Partner Community anymore. Its clear now that  any form of dealer isn't valued as they used to be, and it will take a significant amount of PR rebranding to make me feel any love again. No big deal in the end. MS isnt everything.  

 

lawtonma
Level 6 Contributor

We are CSP direct so yes we can do it - not sure why I had it in my head - maybe because we are also working as a CSP Tier2 reseller for a couple of customers where we cannot do it.

 

But today, with 5 days to go, we are tacking this update from Microsoft.

 

Some partners are experiencing errors when migrating customers subscriptions to New Commerce Experience. There are two known issues actively being investigated:

  •  1) reducing seat quantity for New Commerce Subscriptions ETA for mitigation is Feb 23 2 PM PST.
  •  2) migration of M/D365 subscriptions with add-ons via API was enabled on 2/21. Due to the volume of errors, effective immediately, this capability of migrating subscriptions with add-ons will be turned off and temporarily unavailable until fixes are made. The ETA for the feature to be reenabled is by the end of day Feb 23 (PST). Eligible subscriptions without add-ons can be continued to be migrated. 
princec
Level 3 Contributor

The old reseller turn to "off" sure that will happen, they will want to lose revenue.  Unbelievable.  I've been reading through these comments and once more it is like talking to a wall.  You have responses but none of them really solve the issues or provide solutions.   We are not Microsoft's Collection Department. 

 

You will not make us to be the bad guys as we explain this ridiculousness to our clients, it will be obvious to them that it is Microsoft, the Castle in the Cloud that is generating onerous requirements on partners and customers.  So much for flexibility and value.  This is so sad, especially for your smaller clients... Pony up or else.  This includes all of the small Microsoft Partner companies that are owned by minorities and women. Most will not pay up front and we can't make contractual agreements with them, only Microsoft can.  So when they go under, get bought out, merge or move to another option you want us to hold the bag. Nice. 

 

Trying to get Microsoft to LISTEN is impossible.  The people that can actually make changes are apparently forgetting who brought these clients to them in the first place.  SMBs don't care about most of the features and functionality these SKUs provide they just do what they need to day to day to conduct business and serve their customers.  So a Libre Office, Google Docs or Open Office suits them just fine.  It is your PARTNERS Microsoft that sell the value of your products.  So why do you treat your partners(your customers!) this way.   Typing this is getting some of my frustration out as I pound my keyboard but it isn't SOLVING anything.  We all hit send and you respond with the spiel.  The spiel is misleading, there isn't ANYTHING good about it for partners.  I had a Microsoft "support" person on the phone the other day and her first line was something like this, "Microsoft created NCE to provide more flexibility.............I stopped her right there and told her that that line reduced her credibility immensely.  Really, that is what you are telling these poor people to say(sell).  Janosch,  I would take your job for all the money in the world.  

 

Here are some simple numbers...we talk a client into the Business Premium SKU, they have 200 seats.  They go under, are bought out, merge or go to another solution 6 months into their subscription.  They wanted to pay month to month to save money so we are left holding the bag....so we take a loss of over $26,000  which would amount to the annual profit from over 550 seats.  I know numbers like this mean nothing to the Microsoft BOD, but numbers like that put small partners out of business.  We understand you think you own the customer relationship...you do not.

 

 

 

aroasdo1234
Level 6 Contributor

Wow. @princec very extreme response. 

 

We are a small Microsoft partner that is minority owned. We have 150 commercial customers plus another 100 or so EDU, NP and Gov. 

 

Of those 150 customers, 145 have all agreed to pay annual, up front. The remaining 5 are staying legacy for now until they budget for the annual, which they have agreed to. Yes, NCE has been a transition, but an easy one because we have great relationships with our customers. We warned them in October changes were coming. In December we told them what they would be and their pricing. In February we have been converting. Everyone will be converted by Sunday the 27th.  Done.

 

I'm sorry you are not having a good experience, but in our experience, customers honestly don't really care about paying monthly or annually for products if they can just plan for it. We found that most partners were playing the wait and see game hoping Microsoft would change their mind. That was never going to happen. This is the end of a 6 year plan to transition all sales over to NCE. It is just CSPs turn at bat. 

 

There are plenty of resources and information out there to help make the transition easier on your customers. If you are Direct you have control. If you are indirect, you are at the mercy of your provider. If you are not getting what you need, I would suggest a different provider. 

 

My 2 cents. 

lawtonma
Level 6 Contributor

Janosh - I know a lot of this is not in your remit - and I appreciate you at least trying to take the questions on board. There is noone else - and I mean noone else who has responded.

 

Regarding the IAMCP survey - to be frank it is too little too late, and Microsoft should not be relying on a 3rd party organisation who's membership fee we cannot even claim through Co-Op, to provide feedback from partners.

 

I have already spent 2 hours of my life prepping for a call via the IAMCP with UK team in November from which we have had ZERO feedback.

 

Regarding ensuring we have correct terms with our customers - absolutely we do this of course - and we credit check them all, BUT we may well (and we have had) customers go bust on us. In the NCE model we will remain liable to Microsoft for those licenses to the end of what could be a 36-month term (unless we get the customer to pay up front - some will, most dont want the cashflow hit).

HandyITAndy
Level 5 Contributor

@aroasdo1234 I'm guessing that you are in the US? Whilst we communicated with our customers last year about the impending changes, here in the UK we only got confirmed pricing on all affected SKUs last week! My whole admin team has been doing nothing but deal with "Microsoft's flexible new experience" since then. We're all totally stressed out and either need a padded cell or a good long spell in a darkened room...

JanoschUlmer
Microsoft

@lawtonma : Yes, agree that credit check alone may not be sufficient, especially for larger projects. Some time it is about risk insurance, know a couple of Partners that do or at least consider this for those high-risk or high-impact scenarios. Of course this will have impact on the margin.

 

Did not want to give the impression that the feedback is "outsourced" to IAMCP, just mentioned because it is a third party, since they are independent, this might be a good way to direct feedback using the voice of many. 

 

Kind regards, Janosch
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HandyITAndy
Level 5 Contributor

Credit checking is good business practice, not a guaranteed way to avoid customers going under and leaving us with the obligation to pay out the contract to Microsoft. I also looked into insuring the credit risk:

  • Most insurers won't touch this kind of risk because it is not a point in time risk.
  • The one, and there was only one, insurer that would cover this risk offered terms and costs that were so bad/high that it made no sense to take the cover.

This comes back to the biggest issue I have with NCE - that Microsoft has chosen to make their partners responsible for paying out a contract when a business has ceased trading and Microsoft themselves can reduce their costs to near zero. That doesn't sound like much of a partnership to me...

lawtonma
Level 6 Contributor

That was certainly the #1 issue for the partners that were in the IAMCP call. Even if Microsoft allowed you to re-allocate/re-sell those licenses to another customer would be better than the current situation, which seems crazy in anyone's mind (other than MS).

 

Unless you get the customer to pay 12/36 months up front, which goes against the customer messaging over the last 10 years of "subscription based, monthly rental, flexible, off balance sheet.........etc."

lawtonma
Level 6 Contributor

Also - my final point I promise! - Microsoft seem to see the 2 changes (price increase and NCE) as completely separate - whereas for most partners and customers they are intrinsically linked.

DerekCV
Level 2 Contributor

Yes Lawtonma, I usually am on top of these things, the price increase and NCE happening on the same day totally muddied the water for alot of people, myself included. Here I was working extremely hard for three months trying to work out how to manage my business model for Microsoft products.  That I totally missed that some licenses are going up anyway. Alot of the messaging I was getting was no change on Annual subscription pricing, and missed the *except!!

 

A big part of our business model has been upselling new customers who have ineffectual partners and have them on plans that do not meet their business needs. We have to deal with the fact that now we can't churn and get MRR on better licenses. This now goes to the incumbent underperforming partner, who (if they are smart) will just discount the renewal as they know when it is and didn't need to spend to upsell the customer. Our solution was to sack some of our MS specific people and upskill on alternatives to Microsoft that we can get MRR on and leave people on their inadequate licensing, while we make up the difference with competing products or sell the intermediate SKU's like EMS E5 or Compliance/Security (not good for customer). We love the MS products but it is a mature market now so less likely to be picking up new MS customers, we normally are upselling and implementing these higher level solutions. If we don't get rewarded for our efforts, as Microsoft wants to reward non performing box movers over people properly selling and integrating their products, then we will still give customers the solutions but make sure we are rewarded as well.

 

One of the hardest issues we had was trying to work out how we will price the setup of the services now we don't get recurring revenue, and also the risk of incumbent partners taking our IP because they still have DAP.

 

So absolutely Tone Deaf of Microsoft, I just don't understand as a business how badly they have handled this and in particular their failure to understand (or care) the business models of their partners.

lawtonma
Level 6 Contributor

I do think that all this will have achieved is to further the "Commoditisation" of Office 365 in particular - and hand the initiative back to the traditional vendors who can live off wafer thin margins without adding a lot of value. It is is further separating the purchase of the licensing from the support and Prof Services around the deployment. Making i ever more difficult for Mid-market IT Services/MSP's to lead with Office 365.

 

Microsoft's desire is for partners to push the end-to-end Microsoft stack with products like M365 Business Premium. Frankly there is not enough money in it for us to continue doing that without wrapping it in 3rd-party products such as Direct Routing, End-Point Protection, Email Archive, Cloud Backup, etc...

lawtonma
Level 6 Contributor

Unbelievable https://docs.microsoft.com/en-us/partner-center/announcements/2022-february

 

After all the pressure and work - Microsoft could not cope with the demand

RupertDavey
Level 6 Contributor

The descriptions have been fudged/copy & pasted, it was "announced" on a NCE MS Teams teams at 2am 1 March then backdated and the MS chap on Yammer is on annual leave this week.

 

What a total and utter mess.

lawtonma
Level 6 Contributor

It would have relieved the pressure if Microsoft had removed the gun they have to our heads around removing rebate/coop from 1st December and aligning that with 1st March 2023 - that would have been a really easy decision to make and implement 

cazimmy
Level 5 Contributor

I think the message from Microsoft has been overly clear. They don't care, period.

aroasdo1234
Level 6 Contributor

6 months of communication. Countless trainings. Blog posts. This community. Resources on the partner website. The list goes on. I do understand indirect resellers were at the mercy of information from their provider. But that isn't Microsoft's fault providers and partners dragged their feet getting ready. 

 

We're done with our NCE conversion.

 

lawtonma
Level 6 Contributor

Hey we were ready - all done and dusted by 5.00pm UTC.

 

That doesnt mean we will no continue to discuss it - if you are happy and done with the NCE conversation great. Not everyone is .

 

JASA1976
Level 6 Contributor

Adding to that is the complete lack of communication out of the UK team at Microsoft. As unmanaged partners we get to hear nothing, not even on the forums here as the channel for UK partners seems to be monitored from those in Germany. As usual here in the UK we are treated as 2nd class.

Doesn't help that partner center has also been playing up over the last 3 weeks when we did finally get confirmed pricing.

aroasdo1234
Level 6 Contributor

I'm not in an advisory group. It was communicated in several meetings and @JanoschUlmer mentioned it at one point. I have been a Microsoft Partner for a long time. (24 years). 

 

Azure Plan was the first real noticeable change for Partners around 2019. The decision to end Perpetual Open License and Subscriptions and move them to CSP, that was all part of the NCE journey.  GCC, EDU and NP licenses are next to NCE later this year.  EA is happening. AOS-G for Gov Partners too at some point. 

 

I'm sorry the experience hasn't been consistent across providers and countries. I don't know how other currencies are handled. I guess it isn't as simple as take the US price list and modify it with the exchange rate. We are not authorized to sell in other geographics. 

MrNick
Level 5 Contributor

100% this is the issue, it needs an official response from Microsoft.   Not next month, like now.  Bankruptcy protection is needed.


NCE has broken the 20-year relationships I have with our Indirect CSP.  

aroasdo1234
Level 6 Contributor

@MrNick What are you referring to? 

aroasdo1234
Level 6 Contributor

You can't move licenses from one tenant to another. That has never been a thing.  For us, Customers are either monthly term or annual term paid annual up front. No risk to us. Customers didn't care either way. Some said, can we go monthly for a few months then switch to annual? which was just a budget question.  It was work, but not a big deal really. We converted all of our 160 Commercial customers to NCE in two months. Not one customer had an issue. 

 

I think partners are worried what customers are going to think and the reality is most customers don't care.  But I can tell you from all the meetings and conversations we had with Microsoft, this isn't going to change and you need to adapt and move forward.

kSebahar
Level 2 Contributor

We are a long-time Gold-Certified ERP partner and direct CSP.  Based on our review of the NCE policies and the detailed Q&A, and the response (or lack thereof) that we have received from our contacts at Microsoft, much more than just being a policy that is unfavorable toward their partners, one could easily interpret the new NCE cancelation policy as unethical, or even potentially illegal.

 

According to the policy (and the Partner Q&A responses provided by Microsoft), this policy would effectively enable Microsoft to record double revenue for delivery of the same product to the same company for the same period. 

 

Scenario: 

  • On January 1, Customer signs up with Partner A and agrees to pay $100/month for a single Business Central Premium license and commits to a full year. Partner A licenses/assigns a new Business Central Premium license.
  • On July 1, Customer decides to work with Partner B and agrees to pay $100/month for a single Business Central Premium license and commits to a full year. Partner B licenses/assigns a new Business Central Premium license.  (Per the Q&A, a company is allowed to license the same SKU for the same product from 2 different partners)
  • On July 1, Customer stops paying Partner A.  (or, if you prefer, you can assume that due to threats of a lawsuit, the Customer continues to pay Partner A for the existing subscription – it really doesn’t change the end result of Microsoft double booking revenue for delivery of the same product to the same company for the same period)
  • Due to the new cancelation policies included in the New Commerce Experience, Microsoft would effectively be able to record revenue from Partner A and Partner B for the period of July 1 - December 31.  Yet only one person (via the “named user licensing policy”) has a license and is using Business Central.

Either of the following changes could easily be implemented by Microsoft regarding the cancelation policy in the New Commerce Experience to eliminate this issue: 

  • A Partner will NOT be allowed to sell a subscription for a SKU that is currently under an annual contract with an another Partner.
  • Partners must be allowed to cancel a subscription at any time during an annual contract if the Customer currently has licensed the same SKU through another Partner.  (allows Partner A to cancel the subscription after the company has it licensed through Partner B)

Do I have any facts incorrect here?

aroasdo1234
Level 6 Contributor

We solve this by either only allowing annual paid annual up front, or monthly with the 20% increase. It’s that simple for us. Then there is zero risk. 

Not one of our 200 commercial customers had an issue with that. Everyone is now on NCE.

299 REPLIES 299
myshop
Visitor 1

I would like to add my voice of concern to this thread. NCE is a terrible blow to us. We have always purchased monthly licenses, but billed our clients (mostly) yearly - and the yearly dates for each client's license start from when they request it - So we have clients with renewals throughout the year for licenses they added. The 20% penalty for buying monthly is frankly rude. We spend 15K a month on licenses but this NCE and its restrictions is just making it harder. We cannot commit to yearly licenses simply due to the billing problems and risk it will create for us.


JanoschUlmer
Microsoft

@myshop : Seems there is a lot of confusion here - when you did obtain in legacy annual term with monthly billing, but charged the customer annually, there is no additional risk for you with NCE, and no different billing (other then the day of the month where you receive invoices might change).

The higher price for monthly term is aligned throughout all channels, customer buying directly via credit always had this higher price for monthly term 

Kind regards, Janosch
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aroasdo1234
Level 6 Contributor

when you really dive into NCE, it isn't all that different. You said you billed your client annually, so what's the problem? pay annual, call it a day. 🙂 I'm confused.