Out with the old and in with the new. Microsoft CSP is changing.

With so many businesses across the globe already using some of Microsoft’s cloud-based products, many of you will already be familiar with the Microsoft Cloud Solution Provider Program, otherwise known as Microsoft CSP.

At a basic level, this is the platform by which businesses can provision and access Microsoft public cloud solutions such as Office 365 and Microsoft 365 through their IT provider, and it’s a model that has served both Microsoft, partners, and customers well for many years.

However, Microsoft has recently announced some important changes to its CSP model, including a change in name. From the start of March 2022 Microsoft CSP will become Microsoft NCE, or New Commerce Experience. This is in a line with a similar change that has already occurred with Azure.

Aside from the new name, there are some other changes that will have an impact on our customers, which is why we wanted to share these with you and highlight any possible implications.

Perhaps the most significant change with the move to NCE is an end to pro-rata refunds offered with cancelled licences.

With the current CSP model, businesses can purchase their licences on fixed 12-month subscriptions paid either annually or month-to-month, and have to specify the number of licences within each tier or solution they would like to purchase at the outset.

After this point, however, they retain the flexibility to scale their licences both up and down as required, and are issued with pro-rata refunds on any licences cancelled before the end of their term.

Following the switch to NCE in March 2022, these refunds will no longer be available, with businesses having a 72-hour window to cancel post-purchase. After this point, the number of licences specified at the outset will be in place for the full subscription term, although there is still flexibility to add any additional licences as needed, which will be charged on a pro-rata basis.

The end of pro-rata refunds does impact the level of flexibility available for businesses, especially those with temporary or seasonal staff who were accustomed to scaling their licences up and down at different times.

To help satisfy this need Microsoft has introduced an additional licence option – a 1 month subscription term.

This will allow organisations who require additional flexibility the freedom to purchase individual or bulk licences on 1-month contracts, avoiding the need to over provision on longer term subscriptions. Businesses in need of short-term licences can therefore purchase 12 or 36-month contracts for permanent full-time staff members, and additional 1-month licences where needed. The caveat to this is that 1-month contracts come at a 20% premium compared to the monthly costs available with 12 and 36-month subscriptions, which are both at the same level.

The implication of both the change in refund policy, and the additional licence options, is that businesses will now need to think more strategically about how they purchase their licences. As with the current CSP model, you will still be able to purchase a mixed package of different subscriptions, so some initial thought to identify the needs of individual users and the licence coverage required can help you right-size your purchases and avoid any unexpected challenges.

Alongside the NCE announcements, Microsoft also revealed that from March 2022 it will be implementing some price increases across several products currently available through CSP.

Current UK pricing has not yet been made available, but details of the increases in dollars are below:

• Microsoft 365 Business Basic – from $5 to $6 per user
• Microsoft 365 Business Premium – from $20 to $22 per user
• Office 365 E1 – from $8 to $10 per user
• Office 365 E3 – from $20 to $23 per user
• Office 365 E5 – from $35 to $38 per user
• Microsoft 365 E3 – from $32 to $36 per user

While an increase in price is never welcomed, it is worth highlighting that this upcoming change is the first pricing adjustment that Microsoft has implemented since it first launched its cloud services over 10 years ago.

During this time many additional features, products and capabilities have been added, (just think about the rise of Microsoft Teams) so it could be argued that an adjustment in price is perhaps overdue.

However, there is some good news. With the current CSP model, businesses using Microsoft Teams must pay additional fees for both dial-in and dial-out capabilities with audio conferencing. This gives users the option to dial into Teams meetings via a mobile phone as opposed to through an app, while also allowing users to dial-out and connect with external numbers.

From March 2022 dial-in functionality will be included as standard, meaning that only customers looking to include dial-out functionality will be subject to additional charges.

For those only using dial-in, the reduction in cost associated with this feature will go some way to compensating the price increase highlighted above.

The price increase, as well as the other changes with NCE will all come into effect from March 2022, or at the end of your current subscription term should this extend beyond this date.

While these changes are significant, fundamentally those already accessing Microsoft services through CSP will still be able to access everything that they need moving forward.

What’s more, those using our CSP platform for management and billing will still enjoy the same level of user experience they do today, with the only major change being the incorporation of the additional 1-month subscription option outlined above.

That said, with these changes on the horizon, it is important to take some time to review your existing licences and makes sure that you outline a revised strategy in line with the new NCE model.

If you have any questions about your licences, or want to know more about how these changes could impact your business, just get in touch with a member of the team.