From January 10, 2022, Microsoft has released the Microsoft New Commerce Experience for seat-based offers, and a promotion with 5% discount for the first 12 months in New Commerce.
This will impact the way, you do business in CSP today, and in this article you will find all details, and important dates to note.
- What is changing with Microsoft New Commerce Experience?
- What is the timeline moving from legacy CSP to New Commerce?
- What promotions do Microsoft offer moving to New Commerce?
- How can the Office 365/Microsoft 365 price increase help you?
- How does this impact your Microsoft CSP business?
- What are your actions?
- How can TD SYNNEX help you?
- Where can you find more details?
Watch the video for a 12 minutes summary, and read more details below.
What is changing with Microsoft New Commerce Experience?
Important changes includes:
- Enforcement of no-cancellation policy. You can no longer cancel or reduce seats during annual term, only at renewal of term.
- Annual financial commitment. For annual term subscriptions you will now be financial liable for the full 12 month term even if your customer stop paying the bill.
- New monthly subscription option. Customers, who require more flexibility to adjust seats may choose the new monthly term option. The flexibility will have a cost, and the monthly price will be 20% higher than the annual price.
- New options to manage subscriptions, including upgrading products and schedule upcoming changes for renewal.
- Easier to understand billing data and less administrative work.
These are important changes, and may impact the commercial terms, you have agreed with your customers, and you may need to review your customer contracts and agreements.
The changes will also have an impact on your business operation. For all your customers and subscriptions in CSP, you need to take a decision and action. If you do not, you will risk the subscription will expire at the first anniversary date after July 1, 2022.
Important dates to notice
However, we do recommend you to start early and leverage the promotions available from Microsoft to help you engage with your customers. Right now may be very appealing for your customers to renew before the price increase on some Office and Microsoft 365 product from March 1st.
Key upcoming milestones (subject to change):
- January 10, 2022: General availability of seat-based offers in the New Commerce Experience. To support partners adopt the New Commerce Experience offers, Microsoft has introduced for a limited time a promotional discount on 5% on annual term subscriptions. The promotion is valid for any new order in New Commerce Experience until end of March, 2022, and the discount will be applied to the invoice for 12 months.
- March 1, 2022: Microsoft will increase the price on a selection of Office 365 and Microsoft 365 products. For any new order on annual term you place before, you will lock the current price for 12 months. This is a great incentive for your customers to renew subscriptions before the price increase.
- March 10, 2022: New orders will only be available in the New Commerce Experience. It will no longer be possible to place new orders in the legacy CSP experience. Existing subscriptions can continue to renew in the legacy CSP experience until June 30, 2022, but we recommend to renew in the New Commerce Experience before to leverage the Microsoft promotion offer and to minimize your operational workload. Placing your existing subscriptions in New Commerce Experience in the same month, will also offer you the option to align renewal date and ease your operation of future renewals.
- July 1, 2022. Renewal of subscriptions will only be available in the New Commerce Experience. Any subscriptions in the original CSP experience will expire at the anniversary date, if not renewed in the New Commerce Experience before.
- January 1, 2023: Microsoft incentives are available only for transactions in the new commerce experience. If you have any subscriptions still active in the original CSP experience, you will no longer earn incentives.
Act now and save 5% on annual term versus current legacy pricing
- Annual Term promotion. This promotion gives a 5% discount off the CSP pricelist. The promotion will be applied the original purchase and any seats added to the subscription during the following 12 months. The discount will be applied to both annual payment and monthly payment options. The promotion is available for orders placed from January 10, 2022 through March 31, 2022. Microsoft may choose to extend the promotion.
- Monthly Term Promotion. For customers, who will desire the flexibility of monthly term, Microsoft will apply a promotion of 16,7% to the new monthly term pricing from January 10, 2022 through June 30, 2022. By doing so, customers will not see the new higher price point until July 2022. However, customers on monthly term will see a price increase on some Office 365 and Microsoft 365 products from March 1st, 2022.
These promotions apply to all new commerce commercial offers except Windows 365 and to subscriptions of up to 2,400 seats. Subscriptions ordered during the promo period will renew after June 30, 2022 at the price in effect at the time of each renewal.
At this time, no promotions are announced for the three-year term offers.
Act fast before the price increase March 1, 2022
As Microsoft will increase the price on some Office 365 and Microsoft 365 products from March 1, now is a very appealing time for you to engage with your customers, and move to the new commerce experience before the price increase.
Doing so, you can lock the current price for 12 months, and postpone the price increase to 2023. On top of this, Microsoft offer a 5% discount for the first 12 months. Meaning the price for 12 months will be 5% lower than the current price in the legacy CSP experience.
This is a great incentive for your customers to move to the New Commerce Experience now, and can turn a difficult conversation into a positive outcome.
This is the price increase from March 1, 22:
- Microsoft 365 Business Basic – 20% increase (from $5 to $6 per user)
- Microsoft 365 Business Premium – 10% increase (from $20 to $22)
- Microsoft 365 E3 – 13% increase (from $32 to $36)
- Office 365 E1 – 25% increase (from $8 to $10)
- Office 365 E3 – 15% increase (from $20 to $23)
- Office 365 E5 – 9% increase (from $35 to $38)
There are no changes to pricing for education and consumer products at this time, only the commercial offers.
In fact, the price change above is independent from the New Commerce Experience announcement. The price change will happen in any licensing program, including Microsoft Web-Direct, EA-agreements and the legacy CSP experience at time of renewal.
How does this impact your Microsoft CSP business?
What do you need to consider?
- Make sure, you have read and understood the changes to the CSP program and the important milestones in the timeline. And make sure to check in again for any future updates or changes to be announced.
- Make a plan to engage with your existing customers and build the plan to move from legacy CSP to the New Commerce Experience. You will be able to renew in legacy CSP until June 30, 2022. But after July 1, 2022, any subscription still active in legacy CSP, will expire at the annual anniversary date, if you are not taking any action to move the subscription to the new commerce experience.
- Will your customer prefer the best possible price on annual term commitment, or the new monthly term with more flexibility at 20% higher price? Or a mix of those?
- The program update will have impact on commercial terms, margins and incentives calculations. Will this impact terms and conditions in your customer agreements, and do you need to make any change?
- Review the risk. With Annual Term, you can still choose to divide the bill into monthly payments. But you will be financial liable for the full term even your customer stop payments or files bankruptcy. Do you want to take the financial risk? We do know many partners will choose to offer only upfront payment for the full annual term.
- Review your operational processes. The program update include changes in billing and cancellation policies, logic and dates. How will this impact your operational workflows, billing and established automation?
- Are your staff ready for the change? Make sure, your commercial sales agents are aware of the new capabilities and change in policies, and are ready to engage and advice your customers.
- Review your policies and processes for renewals with New Commerce. TD SYNNEX make it easy for you to see and manage upcoming renewals in your new Renewal Dashboard in StreamOne Cloud Marketplace, and you are able to schedule any changes for renewals at anniversary date.
- Be fast and agile. As Microsoft has announced a price increase on some Office 365 and Microsoft 365 products from March 1, 2022, right now is an appealing opportunity to engage with your customers and lock the current pricing, and postpone the price increase for 12 months. Combined with the 5% promotion on annual term offers, this is a good incentive for your customer to move to New Commerce, and can turn a difficult conversation into a positive outcome.
- Use the opportunity to right-size your customers licensing and add on your own support and services. This is a good opportunity to discuss security needs, and upsell to Microsoft 365 Business Premium and Microsoft 365 E plans.
- Get it done. You will have the option to renew subscriptions in the original CSP experience until June 2022, and can delay the enforcement of New Commerce until June 2023. But you will loose any incentives from January 1, 2023, and will need to maintain multiple billing logics and invoices. The pain will not disappear by waiting; get it done.
- Maximize your incentives. Are you Silver or Gold Partner? Consider annual term with the annual payment option. Not only will this remove the financial risk of monthly payments; you will also maximize your incentives payments. We know the incentives rates will remain as current until October 2022, but most likely we will see changes coming then. Also note; currently the incentives in New Commerce is paid as 100% rebate.
- Make sure, you did enroll to the new Microsoft MCI incentive program in your Microsoft partner portal to be eligible for Microsoft incentives in New Commerce.
All the way; TD SYNNEX is ready to support you.
- TD SYNNEX Sales Teams, Solution Experts and License Desk are ready to support you find the best solution for your customers and help you upgrade from legacy CSP to the New Commerce Experience.
- StreamOne Cloud Marketplace is ready and support the new commerce offers and logic. This include a new purchase experience making it easy for you to find the right product, making product upgrades and schedule renewals. We are also introducing a new Renewal Dashboard, so you can easy manage future renewals.
- To learn all the operational details of Microsoft New Commerce, please see our recorded webinars. We are going through all the details one by one. Everything you need to know to success with the new commerce experience.
- As Microsoft will continue to add new features and capabilities to New Commerce, please sign up for our newsletter “CSP Insider”.
Are you not yet a TD SYNNEX partner? How can we help you?
Ask yourself:
- Do you get the help you deserve from your current CSP partner?
- Do you have the right terms and conditions?
- Do your current CSP provider show interest in your business? Do you have a common business plan to grow your business and help you land new business?
If you are a direct reseller with Microsoft, do consider if now is the time to shift to an indirect partner:
- Do you see a commercial value from the financial investment and commitment to be direct reseller?
- Do you get the help you need from Microsoft to land this big change from Microsoft?
TD SYNNEX was awarded Microsoft Indirect Partner of the year 2021, and we are very proud of this award. It is a recognition by Microsoft of the work we do every day to help our partners success in delivering Microsoft solutions to their customers.
As a Microsoft Partner with TD SYNNEX we offer you:
- A dedicated Partner Success Manager committed to grow your business and land your business opportunities.
- A team of skilled Solution Experts and Licensing Experts.
- A team of Microsoft Certified Solution Architects to assist you in presales, technical verifications and proof of concepts.
- Our StreamOne Cloud Marketplace making it easy for you to provision and deliver and manage Microsoft Cloud Services to your customers. This year we will see a massive upgrade to StreamOne, and we cannot wait to show you soon our new portal.
- A catalog of professional and managed services to help you accelerate and scale your business.
- Our Elite Support offers with the option to build a tailored support plan for your specific customer needs.
- Our award-winning click-2-run solutions can help you simplify and automate complex workloads, like creating an Azure Virtual Desktop solution with only a few clicks. It is like certified blueprints with full support from TD SYNNEX.
- With TD SYNNEX Academy, we can help you get Microsoft certified. Your employees are your most valuable assets, and we can help you with tailored trainings plans to fit your training needs. From new employee onboarding over technical and sales readiness workshops and on-demand webinars to certified training to help you acquire a Microsoft Advanced Certification.
Do you want to know more?
Mahmod Ahmad, Business Development Manager
Madiha Syed, Partner Success Manager
Aleksander Boberg (Partner Success Manager)