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UK Partner Zone Discussions

A dedicated area for UK Partners to connect around readiness events and content at a local level.

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lawtonma
Level 6 Contributor

NCE and 2022 price increases

Does any know if the UK Teams are planning to run a session on the impact of the new price changes and the impact of the New Commerce Experience on our customers?

 

There seems to be a huge amount of confusion, concern, panic and negativity from many customers - who are also now being targeted by "Every man and his dog" to "optimise" their licensing in advance of the changes.

 

Trying REALLY hard to put a positive spin on this for customer but struggling - not sure about everyone else?

 

 

44 REPLIES 44
JanoschUlmer
Microsoft

@JASA1976 : For E5 there was never a price increase announced

Kind regards, Janosch
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lawtonma
Level 6 Contributor

Agreed - Office 365 E5 is increased, but not M365 E5.

 

Although in the NCE price book the price still shows £30.80 for Annual/Monthly - which is the same as it ever was. The legacy spreadsheet shows it correctly as £33.40. Might be just a UK£ issue

JanoschUlmer
Microsoft

@lawtonma : No, these numbers are correct - you can also see that well that 20% and 20% is not 40%, it adds up to 44%. I just wanted to make it clear that there are two different things. 

 

I'm totally with everybody in the thread that the compound effect for those customers with this need is a big challenge to communicate. And the increased risk - and the potential impact on offers you are willing to provide and/or the potential impact on the margin insuring the credit risk is another challenge. CSP indeed had a long time advantage to other licensing programs, and with this gone at the same time as the general price increase I can understand the frustration this causes. 

 

So, it is not about putting a positive spin to where there is none, just clarification and explaining the bigger picture on what is happening.

And @Matt_Maxnett , sorry if my answer did offend you.

 

 

 

Kind regards, Janosch
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JASA1976
Level 6 Contributor

So bad news Microsoft is going to stiff you with a 44% rise in cost translates to "the bigger picture on what is happening." in Microsoft speak.

So we have a price increase beyond all expectations, but until next week we can't actually communicate exactly what that's going to be as the price list hasn't been released yet which just compounds any early conversations we've been having with customers. I think many partners just don't understand why here in the UK we've had to wait so long for the official pricing when it was released months ago in the US.

It feels like over here we are treated as an after thought and unless you're a managed partner that has regular engagements with a partner manager you're even further down the pecking order. I've no idea how any new start up would ever gain and traction now in becoming a partner.


 

sbeckett
Level 3 Contributor

Exactly this. Although an after thought would imply they are thinking about it now. There's precious little evidence of that. Anyone asking me now about becoming a MS partner will get a very different answer to one I'd have given last year. Pre One Commercial Partner I think there was a UK small business partner manager, I think it was Paul Bolt, I met him at MPC and we had a useful chat, but by the time I'd contacted him two weeks later he was no longer in that role. I'm not aware that they ever replaced him, from a small partner perspective it was all downhill from there.

Simon

lawtonma
Level 6 Contributor

Janosch - I know you are the messenger and at least you are attempting to answer peoples questions so I appreciate you coming on here and taking it on the chin. 

 

There is no sign of the senior leadership team addressing these concerns. Silence.........

Matt_Maxnett
Level 2 Contributor

I would just like to echo this, thank you Janosch for your integrity in coming here to answer our frustrated questions, we do really appreciate this!

Matt_Maxnett
Level 2 Contributor

Thanks for the reply Janosch.

You have phrased this as "...a big challenge to communicate". That's cute, but it is not where the challenge lies for MSPs.
The real challenge is about mitigating the financial risk that we are now being asked to bear.

MSPs are now handling all the provisioning, 99% of the support (in most cases), and now we are holding all of the financial risk too, for a paltry 10-15% margin.

NCE is not a communication challenge, it is absolutely unfair, extremely short-sighted utterly unnecessary - there is zero need to lock customers in and remove the month-by-month agility we have spent the last 10 years selling them on.

There is nothing good in NCE.


lawtonma
Level 6 Contributor

Articulated with passion! I cannot disagree with any of that.

JASA1976
Level 6 Contributor

That's exactly what I've been doing for now to calculate what the 1st March price is going to be and then add 20% on for those not going on to a 1 or 3 year term. I think it made some of the most popular SKU's to be around a 36% increase in total.

Matt_Maxnett
Level 2 Contributor

Whilst technically correct, the spirit of your answer is disingenuous. Try telling my customers that a 20% price increase at approximately the same time as a 20% increase to retain current terms is not a 40% price hike. This is going to go down like a lead balloon.

Add to that the fact that we'll be responsible for any payment default of a customer.

Then dress it all up as some kind of benefit to us or our clients, just to insult our intelligence.

Brilliant. Happy New Year folks.

gavinnixon
Level 6 Contributor

........I concur completely; and at the same time economies all over the globe are recovering from a two-year pandemic.

lawtonma
Level 6 Contributor

If you were being cynical you would say that Microsoft are a cashing in on the fact that people have had to use tools like Office 365 to keep their businesses running during the pandemic with the need to keep people connected, and that has driven an explosive growth in the use of products like Teams. Like most partners we have anchored around Teams and teams Phone and sold the dream to these customers - and now we are the ones that have to explain why it was not as good a decision as we told them.......

 

Just at the point where companies need to be able to flex up and down with Covid still in the mix.....

sbeckett
Level 3 Contributor

If you were being extra cynical you would also remember Gavriella Schuster telling us during the changes to partner benefits that Microsoft simply had too many partners. This will reduce that number and we should be under no illusion that Microsoft will think that is a bad thing. Despite us being a marketing powerhouse to small business for the first 10 years of Office 365. As you say, the silence and belligerence of the senior team tells you everything. It's not just frustrating, I actually find it quite sad that after having had us as a resource of information and guidance over the years they've decided to repeatedly ignore what we tell them. Still that's big business I guess.

lawtonma
Level 6 Contributor

It feels a very different organisation to when I was there - I feel they are moving from "Partner - Led" to "Disti - Led" and in an ideal world all partners would be managed by disti channel and not be a burden to Microsoft. That does not suit partners like ourselves who, without blowing our own trumpet, know what we are doing and very rarely have to take advantage for Advanced Support, and certainly wouldn't get any value buying through disti. 

 

Fortunately we took a decision to no longer lead with the full M365 stack and focus on other bolt on services such as Unified Comms, Security and Cloud Backup/DR. The key reason being that

 

(a) M365 is becoming more commoditised as the "big boys" drive pricing down (we have seen a customer quoted at RRP-18% by one of them)

(b) It is becoming more difficult to differentiate as every man and his dog can sell M365 - no need for competencies, capability or any support now as this is kicked back to the disti. With generally a poor customer experience.

(c) 3rd party cloud products generally have a "much" better margin

(d) The split of rebate/coop introduced a couple of years ago have further diluted the "real" margin we can make on M365,

 

Here is an idea - improve the margin and cap the discount partners can give based on volume!

 

Rant over.

 

Mark

gavinnixon
Level 6 Contributor

I completely agree that capping the discount that partners can give would be great. However, it would be difficult to monitor, but there would of course be an element of trust as there is now throughout the whole eco system.

lawtonma
Level 6 Contributor

Not sure what trust there is in the ecosystem? Only the very large CSP/LSP/Disti have the volume and economies of scale to survive at the price and cross-subsidise with other products.

gavinnixon
Level 6 Contributor

In the Biz Apps space, the licensing has traditionally operated on a 'trust basis', however, this has slowly started to be enforced over the last 12 months or so.

sbeckett
Level 3 Contributor

Thanks Janosch, I appreciate the response, and I agree it's nuanced and not as straightforward as it seems.

My point was that the LSPs wouldn't transact in CSP as it didn't suit them, and the changes seem to suit their way of working more than ours, bearing in mind in that, in common with most consultancies who sell MS software as part of their service to clients, we've changed our way of selling licenses to suit the CSP methodology.

20% increase plus a 20% increase to retain the same terms as before will be viewed, by small businesses, as a 40% increase. 20% and keeping the same terms would be an easy sell for us as it's still great value. 40% increase on some lines is, I assure you, is not going down well with clients. Making us responsible if the client goes bankrupt or is sold to another business who refuse to honour the contract with us is, I can tell you, going down badly with small MSPs and consultancies.

Simon.

JASA1976
Level 6 Contributor

I think its quite telling that in the UK forum on quite a lively topic that the only Microsoft representative taking active part is actual from Germany.

This seems to be mirror the communication we receive direct from Microsoft UK in that its none existent.

lawtonma
Level 6 Contributor

The only events that we really get invited to now are the Modern Workplace session that are run by Katrina Borthwick in the UK team which are useful - aka.ms/MWCommunityCallsOD - but they are live events so not too much in the way or interaction, it more of an update.....