For the past eight years, as Microsoft wound down the License Solution Provider Program, we've been anticipating significant changes in Microsoft licensing, and now, they are finally here. Reviewing your Microsoft Licensing Strategy to adapt to these changes is more critical than ever. Let's delve into the major updates and what they mean for your organization.
Last month, ENow hosted a webinar where licensing expert Steve Paradis and I outlined updates to Microsoft Licensing and covered 'How to Prepare and Maximize Savings for Your Next Microsoft EA or MCA-E.' You can watch the entire webinar, but I've highlighted the key changes from Microsoft and offered additional details on the updates and how they can impact your future licensing strategy. Let's look at some of the changes over recent years and months.
The Microsoft New Commerce Experience (NCE) is a transformative platform for ordering, provisioning, and billing license-based licenses, including Microsoft 365, Dynamics 365, Power Platform, and Windows 365. This new model offers customers and partners enhanced flexibility and capabilities when purchasing and managing products.
Key Features of the NCE:
Flexibility in Managing Services: Customers and partners can control subscription renewals, upgrade partial seats when moving to new SKUs, and schedule changes to subscriptions that take effect at the end of terms.
New Pricing and Add-On Options: The NCE provides more flexibility to acquire add-on services and offers new monthly term options.
Simplified and Enhanced Billing: Billing is consolidated, and invoicing is done using the customer's currency, with consistent billing dates based on months.
The NCE aims to streamline the purchasing and management process for partners, making it easier to handle subscriptions and services.
In the NCE, different licensing options are available, including monthly, annual, and multi-year terms. The month-to-month licensing option comes with a 20% premium for the convenience and flexibility of changing licenses monthly without a long-term commitment. This means higher rates compared to annual or multi-year terms, but with the benefit of flexibility.
Starting April 1, 2024, Microsoft introduced new commercial Microsoft 365 and Office 365 suites without Teams in regions outside the European Economic Area (EEA) and Switzerland. Instead, there will be a standalone Teams offering for Enterprise customers.
Key Points:
These changes aim to provide commercial customers with the option of purchasing Teams separately, addressing antitrust concerns and streamlining decision-making.
The shift from the Enterprise Agreement (EA) to the Microsoft Customer Agreement Enterprise (MCAE) represents a significant change in managing Microsoft licensing and billing. This move is designed to streamline processes and provide more flexibility and control over licensing.
Advantages of MCAE:
API Integration: Complete API availability through native Azure APIs for seamless integration and management of services.
Cost Management: View costs across billing profiles using Cost Management, with new APIs for cost notifications and data export.
Simplified Billing: Consolidated invoices and consistent billing dates help manage budgets more effectively.
Enhanced Flexibility: More flexible subscription management, including control over renewals and upgrades.
The transition to the new MCAE introduces processes that are better aligned with business needs for purchasing and managing licenses, compared to the time-consuming Enterprise Agreements. This new contract enables customers to avoid maintaining unused inventory by offering on-demand purchasing and license assignment through APIs for end-user licensing.
Starting January 1, 2025, some cloud Enterprise Agreements (EA) in direct markets will no longer be eligible for renewal under the existing EA framework. Affected organizations will need to transition to the MCA contract instead. This change is part of a broader strategy to migrate customers, especially those in the EA Level A space, to CSP/MCA contracts.
Announced Price Increases
From April 1, 2025, Microsoft will implement a 5% price increase on monthly billing plans for annual term subscriptions across Buy Online, CSP/MCA, and MCA-E. Specific product pricing updates will also reflect investment and product enhancements, such as a 25% increase for Teams Phone and a 40% increase for Power BI Pro/Premium per user.
Microsoft Copilot is an AI assistant integrated into Microsoft 365 applications, designed to enhance productivity, creativity, and efficiency. Key benefits include boosting productivity, enhancing business efficiency, supporting security, and improving collaboration. Microsoft recently made updates to Copilot naming and how free/paid versions integrate - just another of the many updates that are helpful to be aware of if you manage licensing for your organization.
Billing Options for Copilot:
Monthly Billing Option: Available from December 1, 2024, with a 5% higher price than the annual billing option.
Annual Billing Option: Remains unchanged and available across Buy Online, CSP/MCA, and MCA-E.
Procurement Channels: Available through EA, CSP/MCA programs for small and midsize organizations.
Microsoft offers a suite of security solutions to protect organizations from various threats and ensure compliance. Key components include:
Microsoft Purview Compliance Solutions: Tools for information protection, governance, and data lifecycle management.
Microsoft 365 E5 Security Solutions: Identity and access management, endpoint management, and threat protection.
These solutions help organizations manage compliance, protect sensitive data, and ensure a secure environment for operations.
As we know, Microsoft is constantly updating SKUs, renaming products, and changing their license focus. By understanding and adapting to these changes, organizations can optimize their Microsoft licensing strategy and leverage new opportunities for flexibility, efficiency, and security.
In Part 2 of this series... We will discuss the mindset needed to effectively buy and manage licensing assets in the new world, that will impress leadership.