From a big picture perspective, Microsoft’s NCE is designed to standardize purchasing through CSP partners, enterprise agreements (EA), and directly from the Microsoft portal. It enables customers to access similar pricing and terms across any transaction model.
The changes began in 2019 with NCE for Microsoft Azure and they are now being unrolled for seat-based products like Microsoft 365, Dynamics 365, Windows 365 and Power Platform. The new program includes fixed commitment terms of 1-3 years, as well as the current monthly option. The monthly option, though, will include a price premium over the longer-term contracts.
WHAT DOES THIS MEAN FOR YOU?
In a nutshell, a lot.
The timing of your transition to NCE is critical, as these changes and promotions will have significant financial impact. There is a lot you will need to decide prior to then, so that you are prepared to make the right choices for you and your customers. You’ll want to consider:
- License changes and premium pricing: You need to choose the right mix of license models to meet your customers’ needs, while balancing the right commercial model for you.
- Financial liability: You will have to pay the full term even if the customer doesn’t, so risk management is important.
- Lack of subscription flexibility: At this point, Microsoft has stated that “moving subscriptions across partners is not a supported feature.” That means you, too, will be challenged to easily move your book of business to another indirect provider.