On 19th August 2021 Microsoft announced major changes coming to the Microsoft Cloud Solution Provider Programme (CSP) for the first time since its launch in 2015, which will come into effect in early 2022.
These changes affect legacy Office 365, Microsoft 365 and Dynamics and will have a significant impact on commercial terms, billing and pricing. The licencing changes will come into effect from January 2022 and price increases from March 2022. However existing tenants will be able to lock in their current price for 12 months up to July 2022.
The primary aim of this change is for Microsoft to simplify its licencing options, but it may be beneficial to you in terms of your planning and budget process as well as offering some price protection over the longer term.
What are the changes?
- Billing options are being reduced to two buckets. This will be known as the New Commerce Experience (NCE).
- For large corporates – ‘Enterprise Motion’ will be for custom deals.
- For small and medium sized corporates – ‘Breadth Motion’ will have the choice to buy online or via a technology partner.
- 30 day cancellation notice at any time during the course of your 12 month agreement will reduce to 72 hours. Refunds will not be available after 72 hours and you will be tied into the number of licences you have ordered for 12 months.
- 12 month agreements can be combined with month to month agreements (useful for contract or temporary staff) but the monthly agreements have a premium price.
- Ability to set up annual arrangements at the same rates.
- Licences can only be reviewed on an annual basis, the option to reduce licences on a monthly basis is no longer possible on the annual commit basis.
What to do next
None of this sounds like good news. However, we will work with you to make sure you are able to get the best possible outcome for your Microsoft Licencing.
If we haven’t spoken to you already, please contact Marcus Bailey, Head of Cloud to review your current terms, licencing and billing. However, in advance of that discussion you should consider how to make these changes work best for you.
- What would you consider to be the ‘core’ number of licences that you need on an annual basis?
- How many extra licences do you need to budget for above your current headcount? Bearing in mind that you will no longer be able to reduce your number of licences on a monthly basis with a reduction in price.
- When do your current terms come to an end? Even if you aren’t at the right point in your budget cycle, we can lock in a set price for you.
- Would it be more beneficial to lock in a longer term agreement and pricing now?
- Would a mix of annual and monthly work better for you if you have a number of contract or temporary staff?