Microsoft’s New Commerce Experience (NCE) Updates
Understanding the New Commerce Experience (NCE)
Introduced to streamline and simplify Microsoft’s licensing process, the NCE offers flexible purchasing options and aims to reduce operational complexities. It provides greater predictability in pricing and a clearer structure for subscription commitments and renewals. However, these benefits come with specific terms and conditions that organizations need to navigate carefully to optimize costs and maintain flexibility.
Key Updates Effective April 2025:
5% Price Increase for Monthly Billing on Annual Licenses
Starting April 1, 2025, Microsoft will implement a 5% price increase on all new and renewing annual licenses with monthly billing. This change is part of Microsoft’s effort to standardize the billing structure across various purchasing channels. Notably, this increase does not affect Azure consumption; it is specific to Microsoft license subscriptions. To avoid this additional cost, organizations can opt for annual subscriptions with upfront billing.
Power BI Pro Pricing Increase
The price of Power BI Pro will rise from $10 per user/month to $14 per user/month. This adjustment reflects Microsoft’s ongoing investment in enhancing the capabilities of Power BI to provide more robust data analytics solutions.
End-of-Sale (EOS) Scheduling for Billing Frequency Changes
Beginning March 10, 2025, customers on EOS and EOS with Conversion offers can schedule changes to their billing frequency for annual or triennial subscriptions at renewal. This capability allows organizations to adjust their billing terms ahead of the April 1, 2025, pricing update, providing an opportunity to manage costs more effectively.
Understanding Commitment Terms:
Monthly
- Customers who need flexibility in seat adjustments often opt for monthly terms.
- Monthly plans typically have a higher per-user cost compared to longer-term commitments.
- With the April 2025 update, monthly billing for annual commitments will now include a 5% price increase at renewal.
Annual
- Customers can commit to an annual subscription and pay upfront or pay monthly.
- Upfront annual payments will not see the 5% increase, making this a cost-saving option.
- Customers on annual commitments cannot decrease seats until their renewal period.
Triannual*
- A newer 3-year commitment option aims to provide price protection for an extended period.
- Customers must pay upfront annually or monthly but lock in rates for the full three years.
- This is ideal for organizations with stable user counts that want to avoid annual price fluctuations.
*Note: The triannual commitment is primarily available for select Dynamics 365 products. It is not universally available across all Microsoft SKUs. Customers interested in this option should check with Oakwood’s Microsoft Licensing team to determine eligibility.
Implications for Your Organization
These updates necessitate a thorough review of your current Microsoft licensing agreements. Consider the following actions:
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Evaluate Billing Options: Assess whether switching to annual upfront billing could yield cost savings in light of the upcoming price increase for monthly billing on annual licenses.
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Review Power BI Pro Usage: Analyze your organization’s reliance on Power BI Pro to determine the financial impact of the price increase and explore optimization strategies if necessary.
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Plan for EOS Scheduling: If your organization utilizes EOS offers, prepare to schedule any desired billing frequency changes before the renewal date to align with the new pricing structures.
How We Can Assist
As your MSP, we are committed to helping you navigate these changes seamlessly. Our services include:
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Licensing Consultation: Providing insights into how these updates affect your specific licensing agreements and identifying opportunities for cost optimization.
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Strategic Planning: Assisting in developing a licensing strategy that aligns with your organization’s operational and financial goals, ensuring compliance and cost-effectiveness.
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Ongoing Support: Offering continuous support to adapt to future Microsoft licensing changes, keeping your organization agile and informed.
