Over the past 24 months, Microsoft have been helping our organisations to navigate hybrid working, providing us with collaboration and communication tools that have meant we can work from anywhere, securely and efficiently.
Microsoft have recently announced two important changes to 365 licensing. These are:
1. Microsoft New Commerce Experience
The New Commerce Experience is essentially the new billing engine behind how Microsoft bills all services. All legacy licensing programs and cloud licensing will soon fall under the new commerce experience. One key change with this new billing engine is that annual commitment periods are now enforced and this changes how 365 products are licensed. However, billing continues on a monthly basis as normal.
2. Price Increases on certain products
This is the first Microsoft price increase in 10 years. The 365 suite of products have been enhanced continually from a productivity and security point of view over this period. The announced price increase will only affect the following 6 products, (see below).
As your Microsoft Partner, we are on hand to help your organisation to navigate these changes.
New Commerce Experience
Microsoft is currently in the process of consolidating all legacy licensing programs under one consistent experience to ensure all customers and all Microsoft products both cloud and on premise are licensed consistently. In addition this will enable licensing in new ways e.g. 36 month commitments, licensing of new products e.g. Windows 365 aka Cloud PC and all licensing including traditional product and server perpetual licensing is now available through New Commerce.
From your point of view there are 2 key impacts from January of next year:
- All Licensing will now have an annual commitment period meaning that you commit to a license and quantity of that license for a 12 month period. Stepping down in SKU type or quantity is not prohibited during the commitment period. The good news is that for many this does not impact how you currently operate, secondly the commitment period locks in your pricing for a period of 12 months.
- Monthly Flexibility i.e. stepping down license type at the end of the month or reducing number of licenses at the end of the month is available as a separate SKU. However monthly flexibility will incur a 20% premium on the license cost.
As a customer you can have both annual and monthly commitment products in use at the same time.
Example: I am a customer with 100 staff but have 10 temp staff that operate during the summer.
In this scenario you would license 100 staff with annual commitment and during the summer license only the temp staff you need on a monthly basis. When the temp staff leave you remove the monthly licenses.
Microsoft first launched Office 365 in 2011 across 40 different markets, and the company has been improving it ever since. These price changes mark “the first substantive pricing update since we launched Office 365 a decade ago,” explains Microsoft 365 chief Jared Spataro announced in a blog post.
From March 1, 2022, the price increase will come into effect. So, what does this mean for you?
1. 6 SKUs are currently targeted for a price increase
The price increase range from 10% to 25% depending on the SKU. The following SKUs will be impacted by the price increase:
- Microsoft 365 E3
- Microsoft 365 Business Premium
- Microsoft 365 Business Basic
- Office 365 E1
- Office 365 E3
- Office 365 E5
2. Audio Conferencing is now included free of charge with certain SKUs
This gives unlimited dial-in capabilities for Microsoft Teams meetings. In order for you as a customer to operate at the optimum level it is important to move or stay on the best license for your business to ensure the best balance of security and productivity. You can check out our webinar recording on these changes here. In addition speak to your account manager and they can review your account and offer the best advice for the changes that are ahead.
Contact ActionPoint for More Information
As a Microsoft Gold Partner and Cloud Solutions Provider, we can answer any questions you might have and walk you through your options and making recommendations. Be sure to get in touch with your Account Manager to discuss how these changes may affect you.