In 2024 Microsoft 365 licensing is moving to Microsoft New Commerce Experience (NCE) but what does this mean?

Understanding Microsoft 365 NCE: What is changing?

Over the last year for existing customers Microsoft has been introducing a new subscription model for all Microsoft 365 subscribers. Known as the New Commerce Experience (NCE) this replaces the legacy system (which is called CSP) of which you are a subscriber. All customers need to migrate their 365 subscription to NCE early in 2024. This is a Microsoft requirement.
  

The Key Changes with NCE

There are one or two key differences between NCE and the legacy CSP subscriptions of which you need to be aware. Customers must now choose between an annual subscription (paying monthly or annually on a minimum 12 month term) or a month to month subscription, which will be more expensive -  around 20% more expensive than annual subscriptions.  

Moreover, if you choose the cheaper annual subscription, you cannot reduce your contracted license numbers throughout the year, though you can increase it. A key difference is that in a monthly subscription you have the flexibility to decrease or increase the number of seats in your subscription at any time but in an annual contract a reduction in numbers can only be made at the end of each 12 month term.  In short a month to month subscription gives you more flexibility around reducing licenses numbers but that now comes at a higher cost.

To date, Microsoft have allowed customers to renew any existing licenses (purchased prior to the NCE introduction) on the old subscription model. However, from January 2024, they will be migrating all licenses over to the new NCE system at which point a price increase will also come in across the board.

Price Changes with NCE

Microsoft originally implemented a 9% increase in 365 fees in April 2023 but we avoided this for our customers existing licenses by renewing all subscriptions before the price rise came into force.  This action locked in the price for one year and so delayed the impact of the 9% price increase.

Unfortunately this inflationary increase will now be applied, as we migrate over to NCE. Again, this is a mandatory price increase implemented by Microsoft.

Decisions to be made for the Migration

Each customer will need to choose whether to sign up for the cheaper 12 month minimum contract or to go month to month at the increased cost.

At the same time we are urging customers to carefully check the subscription they are currently on to ensure they have the correct number of seats of the correct subscriptions before committing to the new NCE subscription model.

Ensuring a Seamless Transition

RedMosquito will be working to migrate all of our customers on Microsoft 365 to NCE over the coming weeks. We will assist our customers in making the right decision for their business so that they can get exactly what they need from their Microsoft 365 subscription at the best possible price.

Our assistance with the move to Microsoft 365 NCE

We will soon be in touch with all of our customers with full details of their current CSP subscription(s) including the staff to whom the subscriptions are applied so that, with our help, they can make an informed decision about the options open to them as outlined in this blog.

We stand ready to assist our customers throughout this process and to answer any queries they may have so that the process is as smooth as it can be. 

Feel free to comment below.