Microsoft Launches New Commerce Experience

What's the New Commerce model, and what does it mean for me as a customer?

The New Commerce model was created by Microsoft to streamline and simplify the purchasing process of their cloud products and services. This will make the way we purchase products from Microsoft more consistent throughout the ecosystem.

Within the Cloud Solution Provider program (CSP) this has already started with the Azure services and the Azure plan, now the 'seat-based' or 'license-based' products such as Microsoft 365, Power Platform, Dynamics 365 & Windows 365 are being added.

(These seat-based offerings are 'technically' available in the New Commerce model as of October 14, 2021)

What will change in terms of flexibility and pricing?

One effect of streamlining the ecosystem is to change the way you can add or remove licenses as a customer. Microsoft will be looking more closely at the commitment you make to us as a partner and therefore offering attractive prices for licenses that you purchase on a long-term basis. In the old model you could break the licenses or the commitment you made at any time that was convenient for you as a customer, this is no longer possible in the New Commerce Model. Microsoft proposes three different terms in this New Commerce Model:

• A monthly term, for which you pay 20% more.
• An annual term, for which you pay a standard price.
• A three-year term (More info follows, available from March 2022)

These terms correspond to Enterprise Agreement and the Microsoft Direct Web program. Thus, these models are aligned and the buying experience across different products is similar.

What about temporary workers or profiles where I need flexibility?

You can combine these different terms with each other and also switch from, for example, a monthly term to an annual commitment. (Shortening your term, for example from yearly to monthly, is not possible).

We are happy to advise you on how to structure and monitor this and how which profiles within your organization fit best within which term.

Can I still change my license choice within the same time frame?

Microsoft allows certain "Upgrades" to be performed. This means that you can change a paying license to another paying license. For example, you can change from a Business Standard license to a Business Premium license. This can be done with all of your licenses at once or for a certain portion of licenses.

Not every move is possible within this system, for example you cannot upgrade from a Microsoft 365 E5 to a Business Standard. If you notice that you have ordered the wrong licenses or you still have second thoughts, you can always pass this on to us as a partner. Please note that the reflection period is only 72 hours. After these 72 hours have passed it is not possible to recall the purchased licenses.

What are the benefits for me as a customer?

At first glance, the flexibility with which you can add or remove licenses is greatly reduced, and it is. You will have to pay 20% more in the New Commerce model for the same flexibility. The upside, though, is that with the annual and three-year terms, you can lock in the price for a longer period of time, and thus have a very predictable and economical cost.

Going forward, Microsoft also wants to look at consumption-based billing within the seat-based portfolio. This method of "pay for what you use" is familiar from the Azure portfolio and could be a very interesting addition. However, this is still in the future and we have little concrete information on it.

How can I switch to the New Commerce model and have a choice?

To switch to the New Commerce model, your CSP partner can migrate your current services from the 'legacy' model to the New Commerce model as of October 14. If you prefer to stay on the old model for a while, this is possible, however, it will no longer be possible to purchase licenses within the legacy model as of March 2022. From then on, only the New Commerce model will be available for the purchase of seat-based offers.

In the transition period from October 2021 to March 2022, we as CSP-partner can guide and inform you about this new model. We will also make sure your services will be migrated to the New Commerce model on time so you can continue to use all your services.

Want to learn more about the "New Commerce Experience" or talk to us about the specific impact on your situation? Then be sure to get in touch! We'd love to help you out.