New Commerce Experience
Microsoft 365 Pricing and Term Changes Starting March 2022
Microsoft has announced that starting March 1st, 2022, they will be increasing prices for select subscriptions within their Microsoft 365 (M365) products.
Beginning July 1, 2022, all Microsoft product pricing will be based on annual agreement term commitments. Products licensed under monthly agreement term commitments after this date will be charged a 20% premium.
This is a Microsoft initiated change to how their pricing and terms are provisioned as part of their New Commerce Experience (NCE). These changes will impact all businesses on M365 agreements, regardless of how they purchase, including direct from Microsoft. (Non-profit, government, and educational customers are exempt)
What Can You Do?
If you transition your current monthly Microsoft 365 licenses to annual terms prior to the March 1st deadline, you receive a few benefits:
- Lock-in the current (lower) rates for the term
- Receive a 5% promotional discount on select products for the new term
- Avoid the monthly term 20% premium charge beginning July 1st, 2022
Contact Us Today
NexusTek is a Microsoft Gold Partner, placing us in the top 1% of all U.S. managed partners, which uniquely positions us to assist your organization.
Although the changes announced by Microsoft can be a significant change to how your business provisions Microsoft products, we have worked hard to understand how to support these changes and to provide you with any opportunity present that could benefit you and/or minimize the impacts.
Contact us today if you’re interested in NexusTek managing your Microsoft 365 licenses and helping you transition to the Microsoft New Commerce Experience.
When will monthly licensing agreements begin to incur the 20% premium?
- Beginning July 1, 2022, unless the agreement is changed to an annual term prior.
- The premium charges will apply to all customers on monthly M365 agreements, regardless of how they purchase, including direct from Microsoft. Non-profit, government, and educational customers are exempt.
When will the new pricing for select Microsoft 365 products take effect?
- Updated pricing will go into effect March 1, 2022.Pricing changes will apply to all Microsoft customers regardless of how they purchase, including direct from Microsoft. Non-profit, government, and educational customers are exempt.
What Microsoft 365 products are impacted by the price changes?
Current Price per License
New Price per License
Starting March 1, 2022
Microsoft Business Basic
Microsoft 365 Business Premium
Microsoft 365 E3
Office 365 E1
Office 365 E3
Office 365 E5
Organizations that choose to continue paying by-the-month will also incur the additional 20% premium charge (on top of the price changes) after July 1st unless they move to annual subscriptions prior.
I use one of the Microsoft (Office) 365 products impacted by the price increase…am I able to lock-in my current rate or delay the price increase?
Yes. If you transition your current monthly licenses to annual terms prior to the March 1st deadline, you can lock-in your current rate for the term and will delay the price increase.
Why is Microsoft making these changes?
This is Microsoft’s first substantive pricing update since they launched Office 365 a decade ago and intended to reflect the increased value delivered since inception.
Four years ago, they introduced Microsoft 365 to bring together the best of Office, Windows, and Enterprise Mobility and Security (EMS), adding Microsoft Teams as the only integrated solution to meet, chat, call, collaborate, and automate business processes. Since introducing Microsoft 365, 24 apps have been added to the suites—Microsoft Teams, Power Apps, Power BI, Power Automate, Stream, Planner, Visio, OneDrive, Yammer, and Whiteboard—and they have released over 1,400 new features.
How do these changes benefit my business?
By not making any changes, you will not be able to take advantage of some of the program initiatives which could minimize the impacts.
By transitioning to annual licensing subscriptions from month-to-month, it will help your business in the following ways:
- Price locks during the term of your annual subscription
- Simplify renewals of Microsoft products
- Streamline processes
- Operational flexibility
When am I able to make changes to my current Microsoft licensing terms?
Microsoft allows for a conversion from legacy CSP products to NCE products at any time until July 1st, 2022. Once converted, the new licensing agreements and terms will apply.
Can I make changes to an annual plan?
- Sort of. You can add or upgrade existing subscriptions, but not reduce license counts. Add and upgrades will be co-termed with the base subscription.
Can I cancel my subscription?
No. Microsoft NCE subscriptions are not cancellable and will not be refunded. Microsoft provides a 72-hour change window from the date of provision. After that only add/upgrades are permitted.
Are longer terms available?
Not yet, but Microsoft has announced it will offer 36-month terms as an option in the near future. This will also avoid the month-to-month surcharge.
What if my current Microsoft licensing agreements are already annual? Do the monthly surcharges or price changes impact me?
If your licenses are currently on annual terms, you will not incur the 20% monthly premium for the remainder of the term. At renewal, you will need to re-confirm annual renewals to avoid the surcharge.
If you use one of the Microsoft (Office) 365 products scheduled for a price increase on March 1, 2022, and your current annual agreement ends prior to that date, you can renew your annual term and lock-in the current rate and will delay the price increase until your renewal.
If you use one of the products scheduled for a price increase on March 1, 2022, and your current annual agreement ends after that date, the price changes will take effect at that time.
What will happen if I don’t take any action or remain on a monthly licensing agreement?
If you do nothing, you will remain on your current CSP licensing agreements. On July 1st, Microsoft will convert all monthly subscriptions to Microsoft NCE monthly subscription agreements.
Effective March 1st, 2022, all monthly subscriptions will be charged for the Microsoft 365 product increases announced.
Effective July 1st, 2022, you will be charged a 20% monthly term premium for all Microsoft 365 products.