Changes to Microsoft 365 Licensing—Everything You Need To Know

Are you aware of the pricing increase Microsoft is implementing for their services starting March 1st, 2022, as a part of their New Commerce Experience (NCE)?

Per-license rates will go up, and there will also be changes to monthly and annual commitment structures. Find out everything you need to know in our latest video:

YouTube video

Microsoft’s New Commerce Experience NCE—What is it?

Up until now, you have purchased Microsoft 365 licenses under what is called “Legacy CSP”. This arrangement has offered a lot of flexibility, allowing you to cancel licenses whenever you like.

Starting March 1st, 2022, Microsoft is launching the NCE. This arrangement offers a far less complex system of plans and rates than Microsoft’s previous model and allows businesses to better harness the exact services they need.

How High Are The New Microsoft Rates?

Microsoft 365 Plan Old Rate (per license) New Rate (per license)
Business Basic $5 $6
Business Premium $20 $22
E3 $32 $36
Office 365 E1 $8 $10
Office 365 E3 $20 $23
Office 365 E5 $35 $38

Important Dates to Know

  • March 1st, 2022: Four Enterprise SKUs, and two SMB SKUs are increasing in price as noted in the chart above.
  • June 30th, 2022: All new licenses will need to be purchased through the NCE (and will be subject to term commitments and a 20% premium for monthly subscriptions).
  • July 1st, 2022: All term renewals must be renewed through the NCE.
  • February 1st, 2023: All remaining subscriptions must be moved to the NCE.

Key Decision Considerations

  • Monthly subscriptions are offered at a 20% premium price when compared to annual subscriptions, which are less flexible.
  • Licenses that are canceled mid-month will be billed for the full month.
  • After a 72-hour cancellation period, the client is committed to the full term of the agreement with no early cancellation.
  • Clients cannot move subscriptions to a different provider while committed to a term.
  • Companies can have a mix of both annual and monthly subscriptions.
  • Term commitment percentages can vary based on your business forecast.
  • Add-ons (i.e., Phone licenses) are purchased as individual Subscriptions, distinct from the base product Subscriptions (which means that end dates may not be the same).
  • Product upgrades are available for higher-paid SKUs only; you cannot go from a higher-paid SKU to a lower-paid SKU (Full and Partial upgrades are available).
  • Subscriptions will automatically renew with active licenses and quantities unless notified 30 days prior to the renewal date.

Annual Or Monthly—How To Decide

  • If you have seasonal employees or temporary accounts, you can keep them monthly to allow for easier cancellation.
  • Even on an annual commitment, you can still be billed monthly, as you are right now with TLC Tech.
  • There is no early cancellation on term agreements. After the first 72 hours, you are committed to these licenses for the full term.

TLC’s Recommendation

  1. Determine your core licensing count (unlikely to change significantly).
  2. Move these licenses to Microsoft NCE before March 1st, 2022 to protect against the global price increase.
  3. If you have concerns about seasonal workers (licenses), please reach out to your Partner Success Manager.

Want To Harness Microsoft 365’s Benefits?

Don’t settle for a sub-par cloud experience, and don’t think you have to be the one managing it.

The TLC Tech team can take that off your plate for good, allowing you to take advantage of its optimized user experience and focus on your work. We will be your expert Microsoft management team.

Questions about these new rates? Get in touch with the TLC Tech team.