Have you taken in the radical changes that the Microsoft NCE brings to businesses? If not, it’s high time you discovered how your business will be affected!
Let’s take it from the beginning. Microsoft started redesigning the Cloud Solution Provider (CSP) program when the New Commerce Experience (NCE) was launched back in 2019 for Azure offerings. Later, in October 2021, Microsoft set the second milestone of transforming the CSP business and provided all CSP partners with new sales capabilities, new rules and new subscription management functionalities for seat-based Microsoft 365, Dynamics 365, Power Platform, and Windows 365 offerings.
As a CSP platform provider, we are committed to help you navigate through this new landscape and stay focused on delivering business value to your customers.
Our work begins with decoding all the new Microsoft NCE requirements, technical specifications, business capabilities and drawbacks or risks and it continues with guiding you, ensuring that you stay focused on your business growth.
Which are the Microsoft NCE challenges for CSPs?
New Commerce Experience (NCE) has given you headaches, right? We sure know why! Here’ an overview:
New Billing Terms
Firstly, Microsoft NCE brings new billing terms and options to which you need to quickly adapt to. There are now new billing terms and options with monthly or annual installments for the monthly, annual or triennial subscriptions.
Limited Cancellation Window
As a CSP, you need to also be aware of the strict 7-day cancellation window that restricts your refund rights. This means that you can have your full refund redeemed only if you cancel within 7 days after purchasing a solution.
No Billing Pause on Suspension
Another challenge you must tackle is the fact that the subscription billing now continues even after the suspension of a subscription. Billing in NCE pauses only if the subscription is canceled.
NCE Changes in Pricing
In Microsoft NCE, CSPs can leverage a 20% discount if they subscribe to an annual plan over monthly subscriptions. However, in the CSP legacy model, the pricing was the same whether the customers subscribed either to a monthly or annual plan.
Changes in renewals
Microsoft decided to continue supporting the legacy auto-renewal functionality beyond July 11 and indefinitely extended the previously announced end of auto-renewals of legacy CSP subscriptions. This extension is available only for existing subscription renewals, while new orders are not eligible for legacy subscriptions. In addition, starting on January 1st, 2023, incentive rebates for active legacy commercial seat-based subscriptions will no longer be paid to partners.
Microsoft NCE Impact on your CSP business
Time-consuming subscription management
The complexity of managing renewals seems to be one of the biggest challenges CSPs face, as, with a 20% premium is applied on monthly subscriptions, you need to confirm whether the customer wants to continue the subscription or cancel it. What is more, in the case that a subscription plan is not canceled after suspension in the mid-term, you will need to pay for the full term even if the customer leaves before the term-end. Imagine having to deal with this along with the increased pricing for Microsoft 365 and Office 365 that come with the New Commerce Experience (NCE)! It gets worse if you have a large CSP business, because you will need to manage complex subscriptions and perplexing billing terms for numerous customers.
We all know that add-ons are counted as separate products in the CSP New Commerce Experience, so this means that you have to manage multiple subscriptions for just a single customer. For instance, if a customer purchases Microsoft Azure today and then purchases Office 365 after a few weeks, the anniversary dates will be different for both products. Also, with the Microsoft NCE, the billing can be in monthly terms for one product and in annual terms for other products. So, you can imagine how complex subscription management becomes, considering multiple customers with multiple anniversary dates on different products. This will not only increase the need for extra resources and automation platforms, but also impact the business processes, daily tasks, and of course, customer experience.
How can CSPs tackle the Microsoft NCE challenges?
CSPs need to be equipped with powerful tools in order to first adapt and then benefit from the NCE radical changes. NCE-ready cloud commerce platforms are the gateway that you should use to display, deliver, and maintain products and services for your customers. This means that choosing the right platform partner is crucial not only for tackling the NCE challenges, but also for ensuring long-term success.
Flexible product & pricing management
Due to the new billing terms and the pricing changes, what you really need is flexibility in both product and pricing management. It would be ideal if prices were defined based on the customer’s market country, the currency, the term and payment method, the segment, and the promotion that can be applied. You need to find the easiest way to configure and standardize the offerings, whilst minimizing the workload required to do so. Luckily, there is a way to automatically update your product catalog each month with just a click for either primary or addon products, draw your commercial policies, and easily publish your offerings to your Marketplace. You can also benefit from the dynamic pricing automation for multiple market countries, multiple currencies (even the ones not supported by Microsoft), multiple customer qualifications, all term durations and billing plans, under one single catalog product! You just need to know where to look.
Once your commercial policy is defined, you can benefit from the fact that the product’s purchase price is dynamically built during the ordering process, upon configuration, based on all the parameters and the promotion that is automatically applied! Fortunately, you do not have to calculate the buying price each time, or recreate the price modeling logic. You can choose the interworks.cloud platform that does it all automatically for you, adding the markup or margin percentage you have already pre-defined! Billing cycles follow the logic dictated by Microsoft and according to the payment option that your customer selected, billing is done automatically each month. What is more, subscription changes can also be taken into consideration when issuing the invoices each month.
Credit risk handling
We all know that both the renewal complexity and the time-consuming subscription management make you struggle. As motioned above, NCE brought important financial challenges to customers, by modifying the cancellation policy while promoting long-term commitment. Now, an NCE subscription can be canceled only within the first 7 days after initial purchase or renewal. Also, annual subscriptions can be paid either upfront or monthly to provide more flexibility in payment plans. You though, as a CSP, are committed to the subscription term, and the purchase amount should be paid to Microsoft, even in cases of customer’s non-payment. So, what can you do to minimize your financial exposure? You can either provide the monthly payment option to your customers or promote only the annual term offerings. Thankfully, interworks.cloud safeguards that these financial challenges of yours are addressed, ensuring you strengthen your credit risk policy! It can play a very significant role in lifting the heaviest load off your shoulders and assist you in minimizing the credit risk of your CSP business in the NCE, with multiple automation goodies which will help your business stay flexible and thrive. You can now:
- Offer multiple billing options to the resellers/customers you choose i.e. annual subscription with monthly payments
- Offer multiple billing options with an optional additional charge to selected resellers/customers
- Control and limit your resellers’/customers’ spending by leveraging the credit limit allowance.
- Quickly identify non-payment issues and set your own rules to automate subscription suspension.
Are you ready to explore the interworks.cloud platform and have your NCE troubles resolved?
How can CSP experts at interworks.cloud help you quickly adapt and benefit from the NCE changes?
Having made numerous discussions with our customers, CSP Partners like you, about the most important Microsoft NCE business challenges they are currently facing, we managed to understand the concerns, be forever focused on your feedback, and create the optimum solutions to ensure both quick adaptation and business success within the CSP ecosystem. We made sure to implement the technical changes needed to support all the new functionalities brought by Microsoft in Product, Pricing, Billing and Subscription Management for seat-based and perpetual offerings in the NCE.
Apart from the exciting features and functionalities, we are committed to always understand our customers’ pain points, accommodate their needs, and provide personalized training, so to help them achieve their strategic growth goals. Our Microsoft NCE experts can help you optimize your processes and focus on your business growth, while minimizing the everyday workload and ensuring your alignment with the CSP program changes, with the use of the interworks.cloud platform. Also, our Customer Success Managers are always available to help you understand the new business directives and adapt with the New Commerce reality.
Our mission target is to provide you with the operational tools that bring value to your business and give you the power to:
- quickly adapt to these changes
- ensure your efficiency
- minimize your credit risk exposure
- smartly build your commercial plans, and
- step ahead of competition
Learn how you can use the interworks.cloud platform to benefit from the Microsoft NCE changes, overcome the challenges and boost your NCE business.
Talk to an Microsoft NCE Expert today