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10/11/2022

What’s next for Microsoft’s New Commerce Experience (NCE)?

It’s been almost three years since the New Commerce Experience (NCE) was announced in November 2019, creating a lot of discussion around the changes it will bring for partners and customers. After it rolled out in January 2022, things slowly started falling into place, with, of course, some challenges. The transition has begun. NCE introduced a more simplified approach to purchasing cloud solutions, enhancing the experience for customers and partners alike, while bringing about some changes that were not so well-received initially, especially by CSPs (Cloud Solution Providers). With the CSP program constantly evolving, partners gain new tools and methods to drive the digital transformation of their customers and grow. But are you ready for what is ahead?

 

About Microsoft’s New Commerce Experience (NCE)

Let’s take one step back and talk about what the Microsoft NCE is and how it affected businesses so far. It was launched in 2019 with the goal to give customers greater choice and flexibility in how and where they purchase, while giving partners more opportunities to sell to a growing base of existing and new customers. The goal was to align all the sales streams and provide a unified experience for both parties, customer and seller.

 

To date, in the NCE, there have been launched offers for Azure, perpetual software transactions available in CSP, Software Subscriptions and the migration of seat-based offers to NCE has begun. The inclusion of seat-based offers for Microsoft 365, Dynamics 365, Power Platform, and Windows 365 is an important step in the evolution toward a unified experience, according to Microsoft. Faster, simpler transactions mean sellers will have more time and opportunity to support their customers’ digital transformation.

 

This is very important for CSPs because as of January 1, 2022, commercial customers are no longer able to buy new or renew software licenses or online services through the Open License program as Microsoft accelerates the adoption of perpetual license availability in the CSP program. New license-only purchases will need to be transacted through partners in the CSP program.

 

 

What are the most important Microsoft NCE changes?

Let’s dive a bit deeper in the changes brought about with the NCE.

 

Firstly, a new set of features and offerings was added to the CSP program creating a new experience, with Microsoft 365. Dynamics 365. Power platform and windows 365. Microsoft Legacy products were available until March. Since then, all purchases can only be placed in the NCE.

 

Most notable are the changes in the commitment terms. New terms were introduced, to provide flexibility and enhance commitment: the monthly term is offered for some products with a higher price in comparison to annual and triennial commitment for all products. All plans come with price protection.

 

The partner gets two billing options: upfront or monthly for annual or triennial subscriptions. There is no price increase when you select between the two options. To make things much more interesting, there are now different pricelists for each market country. The customer will pay in their own currency and the partner will be invoiced in their local currency.

 

Now let’s discuss commitment a bit more. There is a new cancellation policy for all subscriptions: Cancellation is only allowed within 7 days after purchase. Should the partner wish to cancel later, they will get billed for the whole term. That brings about the risk of non-payment by the customer, for which the partner is liable. The partner can block the customer from using the service, as suspension capability is offered for any active subscription, but they will continue to be billed. We must also note that auto-renewal is on by default for all subscriptions. With all this in mind, one can only understand how important it is to effectively manage subscriptions in the NCE.

 

Some other benefits include that promotions are applied as a percentage, and can be auto applied, with varying discounts. Addons are now discoverable as individual products, and the purchase creates a different subscription with different end dates. Also, we have subscription upgrades with auto seat assignment or with the options to increase or decrease seats at any time, hence flexibility is provided.

 

 

Do you still have questions? Check out our FAQ page, where we answer all the questions that our partners have asked us!

 

Addressing the challenges

Some may consider the ride to have been bumpy. Partners might be left feeling exposed or unready in many areas. This is why we made sure that the interworks.cloud platform NCE-ready and provides you with all features that help you quickly adapt and effectively manage your business. It fully supports New Commerce Experience for Azure, perpetual licenses, software subscriptions and seat-based offers. We are constantly developing our platform to accommodate the latest changes to ensure your smooth transition to the Microsoft NCE.

 

To help you cope with the limited cancellation window, the long commitment periods, and the risk of being held financially responsible for all your Microsoft subscriptions, we have launched multiple automation solutions which will help your NCE business stay flexible and thrive.

 

Starting with billing, we have automated the process to fit your needs. Billing frequency powered by the interworks.cloud platform lets your customers select their preferred payment plan for their annual subscriptions. Your customers can choose to pay upfront for their annual subscription or pay in monthly installments. And the perk is that you can also choose which customers will be able to pay with monthly installments.

 

You can offer multiple billing options to the resellers or customers you prefer. Also, you can add an optional surcharge to selected customers, which will help you manage subscriptions when you are unsure of a customer’s commitment. You have the option to control and limit your resellers’ or customers’ spending by leveraging the credit limit allowance feature that the platform offers. You will be able to quickly identify non-payment issues and set your own rules to automate subscription suspension. 

 

Now let’s talk pricelists. Product pricing can now be defined based on market country, buying options (term and billing option), segment, and applied promotion. You can automatically update your product catalog monthly with primary & addon products of Microsoft 365, Office 365, PowerPoint, and Windows 365 offerings for all the market countries you sell to. You can also define your commercial policies and publish your offerings on your Marketplace. This way, you reduce your daily hassle and save valuable time.  

 

We know the difference between traditional and NCE pricing is that an NCE product comes under the same SKU, along with all its available variations. To that end, the interworks.cloud platform lets you keep one catalog product for each SKU and benefit from dynamic pricing for multiple market countries, multiple currencies (even the ones not supported by Microsoft), and multiple customer qualifications! Prices are dynamically built upon purchase configuration, so you don’t have to configure the buying price or recreate the price modeling. To ensure risk and overhead cost reduction, our platform automates this process, along with adding the markup or margin percentage you have predefined!

 

 

Microsoft’s New Commerce Experience: What’s next?

To support you more and improve your experience even further, there are new and exciting features ahead. Starting with Scheduled Changes in seats. You or your resellers/customers will be able to schedule changes in the number of seats for an active NCE subscription. You can manage subscriptions in advance instead of performing manual changes at renewal. This improves your operational efficiency and improves your Resellers/ Customer’s autonomy and experience in your Marketplace, while preventing errors that are possible to occur. For example, accidental license renewals, which might happen if the cancellation date is missed. This reduces financial risks and customers’ dissatisfaction.

 

We made subscription management even better. You will be able to fully or partially upgrade NCE subscriptions to higher SKUs into an existing subscription. With the subscription management process automated, you, as a CSP, can upgrade any NCE paid subscriptions or provide autonomy to your resellers/customers to do it through your Marketplace.

 

We want to make sure that you can minimize the financial risk that you have when offering monthly billing plans. You or your Resellers/Customers will be able to review a summary of the installments created for each NCE subscription purchased with monthly billing option. You, as a CSP, will be able to define a percentage uplift for selected resellers/ customers, when they purchase a subscription with billing frequency. Think of it as interest charges. For example, you can set that one or more of your resellers will be surcharged an extra 5% on top of the price, when purchasing an annual subscription with a monthly billing plan. In this way you can create a safety budget.

 

The interworks.cloud platform is equipped to support your CSP business so you can focus on what matters: thriving.

 

Are you well prepared to steer Microsoft’s New Commerce Experience changes to your benefit? With the right tools and features you will be able to manage your operations effectively, with optimized costs, and a clear billing experience.

 

Speak to our experts today! Book your demo and leave the rest to us!

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