Microsoft has recently announced upcoming changes to their popular CSP licensing program known as the New Commerce Experience that changes the pricing and license terms for their cloud products including Microsoft 365 and Office 365.
We are working closely with Microsoft, our distribution partners, and our clients to make this transition as simple and cost-effective as possible. Be sure to check out the important details below.
Important Dates
- Microsoft is increasing prices on certain licenses by 8% to 25%, effective March 1, 2022.
- The ability to place new orders on the existing license program will end on March 10, 2022.
- All customers must transition to this new licensing program by June 30, 2022.
- Customers have a limited-time opportunity to avoid price increases for 12 months by committing to an Annual License Term prior to March 1, 2022.
Important Terms & Conditions
- Microsoft is providing options for Monthly, Annual, and Multi-Year (36 months) licensing terms.
- Monthly licensing will be billed at a 20% surcharge but will allow you to add and remove licenses on a monthly basis. This 20% surcharge in is addition to the price increases.
- For Annual and Multi-Year subscriptions, customers can increase their license quantities or upgrade to higher license type but cannot decrease license quantities or downgrade to a lower license type during the term of the agreement.
- Monthly and annual commitments can be used together.
- Annual and multi-year commitments can be payed on a monthly or annual basis.
Price Increases
Microsoft is increasing prices on certain seat-based licenses between 8% and 25%. This change impacts commercial customers only. Non-Profit, Education, and Public Sector licensing will not be impacted at this time.
- Enterprise Licenses
- Office 365 E1 is increasing from $8 to $10 per user per month
- Office 365 E3 is increasing from $20 to $23 per user per month
- Office 365 E5 is increasing from $35 to $38 per user per month
- Microsoft 365 E3 is increasing from $32 to $36 per user per month
- SMB/Business Licenses
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- Microsoft 365 Business Basic is increasing from $5 to $6 per user per month
- Microsoft 365 Business Premium is increasing from $20 to $22 per user per month
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Stricter License Terms
Microsoft’s previous buying experience was based on an annual term that allowed customers to add or remove licenses to their subscription throughout the contract and was generally transparent to most customers.
Moving forward, Microsoft will be enforcing stricter licensing terms for Monthly, Annual, and Multi-Year commitments, including a very restrictive license cancellation policy.
Monthly license terms are available at a 20% surcharge over the price increase but will allow customers to increment and decrement licenses on a monthly basis. Monthly licenses are the preferred choice for temporary or seasonal employees.
Customers may increment licenses on Annual and Multi-Year agreements at any time throughout the license term, but customers may only decrement when the license agreement is up for renewal.
Annual licenses would be the preferred choice for permanent employees and positions. Please note that annual licenses and renewals purchased on or after March 1, 2022 will be based on the price increases listed above.
Customers may cancel a license with the first 72 hours to accommodate for ordering errors or short-term adjustments, otherwise the full commitment will apply based on the chosen term.
Customers may use a mix Monthly, Annual, and Multi-Year agreements, but there is a very limited list of licenses available on the 30-day license term. Most licenses require an Annual or Multi-Year agreement.
Recommendations & Next Steps
To avoid these cost increases for 12 months we recommend that customers commit to an Annual License Term for their existing licenses prior to March 1, 2022.
Our team will be contacting existing machineLOGIC clients to discuss these upcoming changes. We'll provide reporting and updated pricing based on your current license usage and help you choose the proper licensing scenario for your company.
If you are not yet a machineLOGIC client, we're happy to help you through this process using our Microsoft 365 License Assessment Service, a free service for clients that choose us as their Microsoft Licensing Partner.
For more information on Microsoft's New Commerce Experience, please contact us at info@machinelogic.com or 303.217.7001.
