New Commerce Experience Explained

Update: Microsoft announced the implementation of a new cancellation-window duration for commercial seat-based offers in CSP new commerce that will go into effect at 5 p.m. Pacific Time on March 18, 2022 (12 a.m. UTC on March 19).Partners now have seven calendar days–increased from 72 hours–to cancel or reduce seats after ordering or renewing new commerce subscriptions in CSP. Details can be found here.

Update: Microsoft announced that they will continue supporting the legacy auto-renewal functionality beyond July 11 2022. Details can be found here.

NCE for Microsoft seat-based cloud offers

Microsoft CSP seat-based cloud offers on new commerce experience (NCE) for Microsoft 365, Dynamics 365, and Power Platform, as well as Windows 365 are available from January 2022. We have created this blog to highlight the key differences between the legacy CSP and the New Commerce Experience, as well as other information to help you our partners prepare for the transition from legacy CSP to the NCE.

Note that Microsoft CSP NCE only currently affects commercial customers. Education and NFP customers are not affected.

You can find the official Microsoft announcements can be found below:

Key Differences:

Before we talk about the key differences between CSP and NCE, let’s talk about the key features of the current CSP offer. The key features of the current CSP offers are:

12-month subscription term (some Dynamics 365 SKUs come with 36-month term).
Flexibility to cancel subscription and adjust seat count any time with charges prorated.
Price protection during the subscription term.

The main differences between NCE and legacy CSP offers are as follow:

Enforcement of cancellation policy – Partner can only cancel with prorated refund within the first 7 calendar days (the cancellation window), proration calculated daily. After the first 7 days, you can no longer cancel a subscription or reduce the number of seats until the subscription anniversary. You will be billed for a full term, even if the customer stops paying for or using the subscription.
New 1-month term offer – A new 1-month term offer will be available at a 20% price premium for customers who need flexibility to adjust seats.
Schedule changes at subscription renewal – Partners can turn on or off auto-renewal, and schedule change of seat count at the time of subscription renewal.
Upgrade – As cancellation is not available outside the 7 day cancellation window, a full or partial upgrade is available for customer to upgrade to higher tier product during mid-term.

For years, Microsoft CSP was an outlier, not only among Microsoft’s other commercial programs but also in the industry, because subscription terms weren’t enforced with the annual-term offers in CSP. Microsoft will change that with NCE while bringing several new features, including Home Use Program and Multi–geo add-ons for Microsoft 365 to Microsoft CSP program in a future release. 

What do you need to do?

With Microsoft enforcing the ‘no cancellation after 7 days’ policy for Microsoft CSP, it is important that you start communicating the change and plan for the move to NCE with your customers. You may also need to update your contract with your customers. Customers will not be able to cancel their subscriptions mid-term as they will need to commit to the full term of payments in any circumstance, whether the subscription is paid upfront or in monthly installments. 

If a customer is uncertain about or unable to commit to using a subscription for the entire term or maintaining at least the number of seats originally purchased, you can advise them to strongly consider buying the monthly term option, so that they can cancel or reduce seat counts at the end of any month’s term. You can also blend and combine different term subscriptions of the same offer for a more customized solution for the customer. 

Finally, if you have not done so, attend our NCE webinar sessions to understand how these major changes to the CSP program will impact your business. 

Timeline:

Key upcoming milestones (subject to change from Microsoft) are as follow:

February 1, 2022: NCE available through rhipe PRISM portal.
March 10, 2022: New subscription orders only possible on the new commerce experience.
Update: Microsoft announced that they will not block the renewal of legacy CSP subscriptions from July 2022. Details can be found here.
January 1, 2023 (previously October 1, 2022): Microsoft incentives are available only for transactions in the new commerce experience (details).

Resources:

Partner blog: Coming to the Cloud Solution Provider program: seat-based offers in new commerce
Customer blog: Seat-based offers through the new commerce experience
Operations readiness collection New commerce experience for CSP seat-based offer
Customer FAQ: The new commerce experience: Customer FAQs for CSP partners
Customer messaging documentation: Customer messaging documentation for Cloud Solution Provider (CSP) partners
Detailed NCE user guide: https://operations.rhipe.com/portal/en/kb/articles/rhipe-prism-user-guides

About rhipe
rhipe is a global leader in cloud and technology solutions, providing partners with business advisory and deep domain technical expertise to thrive in the growing cloud market. rhipe is recognised as an expert in subscription software licensing in Asia Pacific. Its multi-award-winning services and support division is the industry leader in Microsoft Office 365 implementation and other global vendor solutions.

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New Commerce Experience Explained