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?
In case this is useful to anyone, we have confirmed with Pax8 the ability to lock in legacy CSP terms and pricing for 12 months for our customers. If they purchase or renew an annual legacy CSP agreement prior to 1st March. They also offered this link which says 30th June (which is it guys?!)
@Matt_Maxnett : Yes, this is the default in legacy, since the minimum subscription term is 12 months.
Reg March/June - it is both, depends on the scenario:
- For new subscription orders, or renew/triggering another 12 month term start on an existing legacy subscription, it needs to be done before March 10, 2022. Or before March 1 to avoid the price increase.
- Legacy subscriptions can still be renewed until June 30, 2022, meaning they would automatically renew for another 12 months.
- Subscription end date is August, 2022; Would make sense to do an early renewal before March 10 (or March 1 if this is one of the offers impacted by the price increase) to extend the legacy until ~February 2023 and keep the old price.
- Subscription end date is June 15, 2022. This would still renew for another 12 months on legacy, so some Partner might want to keep it to have longer time on legacy, until June 14, 2023 even though it would renew at the new price. Other Partners/customer might prefer to have the old price secured, so they would also renew this early, before March 1 - thus the customer would need to switch earlier to NCE, but have the lower price for a longer period.
Third aspect is also the 5% promotional discount for migrations to NCE until March 31 - some partner wants to secure this as well (Migrate before March 1 to NCE to have the old price and the 5% discount for a full year) - others prefer renewal on legacy.
Thanks Janosh - makes sense - so if your subscription renewal date is 30th June 2022 you are in luck! You can retain the flexibility of the legacy platform for another 12 months (although you will be hit with 1st march price hike).
The issue for most partners is that this hands the initiative to the predatory partners who are trying to steal customers off the back of this change, as we cannot start a new legacy CSP subscription for an existing customer unless it is a product they have not had before. Only a competitor CSP can do that.............not great is it?
Have been to see a customer today (1000 seats of O365 - not through ourselves) and despite O365 not being the subject of the meeting we did eventually get onto the subject with their IT Director. "Absolutely stunned by the changes - the most badly handled price increase I have ever seen" . His words, not mine.
@lawtonma : You can provision the same Products multiple times in legacy (in multiple subscriptions), only for M365 Business SKUs there is a limit of 2. You can also trigger an early renewal for an existing subscription by changing the billing cycle.
I've just seen the announcement from yesterday that Microsoft have updated the price lists as of 2nd February for M365 Business basic on NCE and a few others on legacy for March. I've downloaded them again, but can't see any difference. Noted the announcement says most currencies, so does that mean every other but not us?
Answered my own question. It will be 1st February in the partner center.
Just hope it actually includes all SKU's as some seem to be missing such as Intune at present.
I believe Microsoft are relying on the direct CSPs to handle all this, certainly we've been approached by all three of our upstream providers.
It's difficult to put a positive spin on it in the small business world. 1 and 3 year deals are fine in the Enterprise world, but it was inevitable that when the smaller partners started impacting the gold license resellers they would put some pressure on.
I would talk to your direct CSP, they're all trying hard to look after us.
Think you mean distributor rather than direct CSP as that's who your upstream provider should be.
NCE is how Microsoft seem to be applying enterprise licensing to the SMB market, and as a direct CSP partner still feel the pain as how do I sell tying customers in to 12 months or 1 year contracts for licenses after years of selling the benefits of the cloud because of the flexibility it brought not just on a technical level, but purchasing the services as well with the flexible approach to licensing.
It feels like implementing an EA to the SMB world.
I have to agree with James here - that is exactly what this is!
I was at Microsoft and part of the team when CSP was launched - so was close to both the process and the initial partners that were enabled. Most of those partners were from the Hosting (SPLA) community initially for the exact reason that they services the smaller (SMB) type customers on a subscription based license model and naturally embraced CSP as early adopters.
Many of the traditional LSP's were not even on the list - and this caused a massive reaction so Microsoft had to include them and now we see that the power of these larger LSP's (and now CSP's) has forced Microsoft bring the traditional 3-year EA approach to CSP. Gone is the "easy on - easy off" approach that has allowed Small-Medium CSP partners like ourselves to help drive the growth of Office 365.
As someone else mentioned - it is REALLY difficult to put a positive spin on this for customers - from Microsoft's point of view absolutely. But we are the guys that are left to not only deliver the bad news, but also pick up the pieces if a customer goes bust in the 36-month contractual period, with no ability to even re-use those licenses that we have bought with another customer.........not great - and I really do think that Microsoft have lost a huge amount of partner loyalty in this exercise - the question is do they care?
Indeed, this does appear to originate from the EA providers, presumably CSP has been taking business away from them and they want it back, while they're still big enough to apply enough pressure on Microsoft.
Every client I've spoken to has raised the issue of agility, and the response"you can still have the same agility it will just cost you 40% more" doesn't seem an acceptable response!
None of them can even understand why Microsoft is doing it, after all the only reason people will move away from O365 is if it doesn't work (which it does), they raise the price by some stupendous rate or they annoy the customer unnecessarily. Microsoft do not need to tie people in.
@sbeckett : "EA providers" - LSPs ("Licensing solution providers") that have sold EA so far - will need to develop into CSP as well because of new commerce.
It is actually the opposite, with new commerce over long term revenue will be moved to the "breath motion" (=CSP) instead of going to the "Enterprise motion" (formerly know as EA). New commerce is not about changing CSP, it is about changing all of the licensing programs, main goal is to have the same policies, agreements, offers regardless of how the customers decides to buy.
You see it already for Azure, where new commerce started 2-3 years ago - Microsoft does not renew Azure in EA anymore, there is either MCA directly from Microsoft, or MCA via CSP. Obviously this does not protect the traditional business of LSPs.
Monthly term options, having flexibility instead of price protection, will cost 20% more, not 40%, same increase as it was always when customer have bought directly via credit card and wanted a shorter commitment.
The other 20% your refer to is the general M365 price increase (actually only one SKU has 20%, the others usually lower), which does apply to any customer, regardless if the buy via EA, legacy CSP or via credit card.
Just for clarity we still do not have actual UK£ pricing and will not get it until 1st Feb (hopefully) - but we have made the assumption that the price increases applied to the US$ price list will be the same - so I did a reckoner for our team below, which shows the compound effect of the price increase combined with retaining monthly flexibility - are you saying these number are not correct?
Glad to see my estimates were not a million miles away - although someone forgot to put Business Basic up!
It is reassuring to me that Microsoft dont always get it right despite the 100's of people that must be involved in this process.
|Microsoft 365 Business Basic||1 Month(s)||£ 3.80|
|Microsoft 365 Business Premium||1 Month(s)||£ 16.60|
|Microsoft 365 E3||1 Month(s)||£ 31.70|
|Office 365 E1||1 Month(s)||£ 7.50|
|Office 365 E3||1 Month(s)||£ 20.20|
|Office 365 E5||1 Month(s)||£ 33.40|
I also checked pricing list for March CSP NCE (in EUR) and also found that (P1Y, Monthly or Annual) price for Microsoft 365 Business Basic is not increased! Is this error? @JanoschUlmer ?
I've been told by our distributor that the increased price for MD 365 Business Basic is just "late", i.e. it's still coming.
So we STILL do not have a complete pricing picture.
Does anyone else find it hard not to swear about Microsoft at the moment?
Hi Janosch, we were given that info on the 4th Feb by Pax8 - I guess they were a day late. Quite sad that we are fighting for every day of advance notice when the US has had their pricing for so long.
Not sure if everyone here is aware of this petition, it is still active - you could add your voice if you haven't already:
M365 E5 price hasn't increased either. Probably because customers thought it was too expensive already.
What it does do though is give opportunities to up sell E5 over E3 easier as the gap comes down.