What is the new commerce experience, and what does it mean for Microsoft customers?
Microsoft is designing the new commerce experience to simplify and streamline how customers buy from Microsoft and to offer them more options for tailoring these purchases to their business needs and goals. It will also make the selling process, requirements, and capabilities much more consistent across the Microsoft product ecosystem.
Simply put, it’s the present and future of how Microsoft sells cloud products and services to customers, both directly and through partners. Microsoft is expanding the new commerce cloud product portfolio, introducing seat-based or license-based offers such as M365, D365, Power Platform, and Windows 365.
What are the major changes that affect my business?
The addition of a monthly and three-year subscription. You can therefore choose a 1 month, 12 months or 36 months subscription. In the current platform only the 12 months subscription is available and payable monthly or annually and 36 months for some Dynamics 365 products. The monthly subscription is 20% more expensive than the annual or three-year subscription but gives the customer more flexibility when it comes to increasing, reducing, and canceling subscriptions or licenses. The new monthly term offers will allow you to cancel a subscription in any month without penalty.
Once a subscription has been activated, it can only be canceled or reduced within 72 hours of activation. After that, no cancellation is available. You will have to wait until the renewal date (depending on the subscription term: 1 month, 12 months or 36 months).
Upgrades to “larger packages” are still possible even after the 72 hours deadline.
Why should I agree to have my subscriptions moved to the new commerce experience?
The new commerce experience will soon be the platform on which all products and services are provisioned.
Starting in January 2022, new CSP offers, and term options will be launched and available only on the new commerce experience – for example, Microsoft plans to add three-year terms and multi-geo add-ons for M365.
I like having the flexibility to cancel or reduce seats whenever I want with the current CSP experience. Why is Microsoft taking away that flexibility for customers with annual term subscriptions in new commerce, and why am I being charged more for the new monthly term option?
The enforcement of a cancellation policy in new commerce is designed to bring CSP into alignment with other purchase motions in new commerce, as well as existing Microsoft licensing programs, such as the Enterprise Agreement, so that all customers have a consistent purchasing experience and are subject to the same terms and conditions for the cloud offerings they buy, whether it’s self-serve, from a Microsoft seller, or from a partner like us.
The cancellation enforcement in new commerce ensures that customers committing to the entire term will benefit from the more favorable pricing of long-term subscriptions.
It’s similar to the way you pay more for a refundable airline ticket or for an online subscription to premium content in which you can cancel at any time instead of paying for a year up front (which costs less per month on an annualized basis). Also, the premium pricing for the monthly-term option is in line with standard practice in the Microsoft Web Direct program, with licensing programs of competitors, and in other subscription-based businesses and industries.
When will my subscription on the current platform be required to be moved to new commerce?
In March 2022 10th, Microsoft will remove CSP partners’ ability to order new subscriptions on the existing CSP platform. All new subscriptions will be on the New Commerce Experience.
We plan to transition your subscriptions to the new commerce experience at the renewal date of your subscriptions and before End of August 2022.
I don’t see any customer benefits from new commerce in this release compared to the existing CSP platform. Is there anything planned for future releases that will be good for us as customers?
The current release creates the foundation for customer-centric new features. For example, Microsoft plans to bring three-year terms to M365 and other seat-based offers, so that partners can help customers lock in their pricing for three years instead of just one. Also planned is consumption-based billing for some components of seat-based offers such as M365, to enable pay-for-what-you-use pricing, along with Hybrid Use Benefits and Home Use Program availability and a multi-geography add-on for the M365 product suite. The new commerce in CSP evolution also enables your partner to offer more options for upgrades and conversions of free trials.
I have a seasonal business in which I need more seats for M365 during certain times of year when I have a lot more employees on staff. I understand that I can’t reduce the number of seats on an annual term subscription during the term. Would it be possible for me to have some seats on a monthly term and others on an annual term for the same offer?
Yes, you could have both a monthly term and an annual term subscription for the same seat-based offer at the same time with the appropriate number of seats in each term to accommodate your permanent and seasonal employees.
