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In This Article

Table of Contents
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Overview

Microsoft launched the New Commerce Experience (NCE) framework purchasing model for the Cloud Solution Provider (CSP) program in November 2019.  Microsoft's goal with NCE is to give customers greater choice and flexibility in how and where they purchase Microsoft online products, while giving partners like Evolve IP more opportunities to sell to a growing base of existing and new customers.In October of 2021, Microsoft announced the pre-release changes to NCE for seat-based Office 365, Microsoft 365, and Dynamics 365 subscription products, and on January 10, 2022, Microsoft made the changes generally available to their Cloud Solution Provider (CSP) partner program. 

With this new release Microsoft has made significant changes to the rules surrounding the purchase of , and changes to, Office 365, Microsoft 365, and Dynamics 365 subscription products. 

This article covers those changes, and how they affect you as a customer under the Microsoft NCE frameworkpurchasing model.

Warning

IMPORTANT

The service agreement you have withXTIUM (Evolve IP) is not affected by Microsoft's New Commerce Experience changesNCE purchasing model.  The terms and conditions you have with XTIUM (Evolve IP) are still in place.

Per Microsoft's NCE rules changes for CSP partners:

  • Starting March 1, 2022, all new subscription orders will be provisioned by Evolve IP using the Microsoft NCE framework.  The rules and conditions in this article will apply to all subscriptions in the order.
  • If your existing subscriptions with Evolve IP have a renewal date after June 30, 2022, they must be migrated to the Microsoft NCE framework on their renewal dates.  The rules and conditions in this article will apply to the subscriptions when they are migrated.
  • All Evolve IP customers must have their subscriptions migrated to the Microsoft NCE framework by December 31, 2022, and we reserve the right to migrate your subscriptions before that date.

Subscription Commitments


Warning

IMPORTANT

Starting April 1, 2025, Microsoft will be offering a new billing option for all Microsoft 365 subscription products, which will provide three commitment/billing options for customers:

  • Annual commitment, Annual billing - Base price
  • Annual commitment, Monthly billing - 5% Uplift from base price
  • Monthly commitment, Monthly billing - 20% Uplift from base price

Therefore, all customers that currently have a subscription with a 1YR commitment and Monthly billing will see a 5% increase in price, which will occur on a subscription's renewal date (not on April 1st).  All customers will have the option to switch their subscriptions to a 1YR commitment with Annual billing on the subscription's renewal date.

Customers with O365/M365 base plans that include MS Teams can also switch from monthly billing to annual billing without needing to switch to the No Teams versions.


Subscription Commitments

As of today, Microsoft has 3 types of commitments for their subscription products in the NCE framework:

  • Annual (1 YR) Commitment
    • The price for a subscription under the annual commitment is the same as Microsoft's published prices on the product's web page.
    • You should choose an annual (1 year) commitment for subscription products that will have little change in quantities (e.g. full-time employees).
    • The commitment starts on the date the subscription licenses are added to your Office 365 tenant, not when you sign your XTIUM (Evolve IP) sales order. 
    • There are two billing options: Annual billing (subscription's base price) and Monthly billing (5% price uplift from the base price)
    • The commitment locks in current pricing for 1 year.  If Microsoft increases the price of a subscription, your price will won't increase on until the renewal date.
    • You must commit to a base quantity for 1 year.  
    • The base quantity can be increased at any time, and changes will be prorated for the commitment term (1 year).  You will still be billed monthly.
    • Increasing a base quantity does not change the renewal date. 
    • The base quantity can only be decreased, or cancelled, on the subscription's renewal date (once a year).
    • If you want to cancel or decrease the quantity of a subscription on its renewal date, you must notify XTIUM (Evolve IP) 30 or more days prior to the renewal date.  All changes are final on the renewal date.
    • If XTIUM (Evolve IP) is not notified of any changes, your subscription will auto-renew the 1-year commitment with the current quantity on the renewal date.  No action required.
  • Monthly (Month to Month, MTM) Commitment
    • Subscriptions with a monthly commitment have an ~20% a 20% price uplift above the annual from the subscription's base price.
    • You should consider a monthly commitment for subscription products that will have a lot of quantity changes (e.g. temporary or seasonal workers).
    • Not all subscription products have a monthly commitment option.  If a monthly commitment is not available, then an annual commitment must be purchased.
    • The commitment starts on the date the subscription licenses are added to your Office 365 tenant, not when you sign your your XTIUM (Evolve IP) sales order.
    • The commitment locks in current pricing for 1 month.  If Microsoft increases the price of a subscription, your price will increase on the renewal date.
    • You must commit to a base quantity for 1 month.
    • The base quantity can be increased at any time, and will be prorated for the commitment term (1 month). 
    • Increasing a base quantity does not change the renewal date.
    • The base quantity can only be decreased, or cancelled, on the subscription's renewal date (once a month).
    • If you want to cancel or decrease the quantity of a subscription on its renewal date, you must notify XTIUM (Evolve IP) 7 or more days prior to the renewal date.  All changes are final on the renewal date.
    • If XTIUM (Evolve IP) is not notified of any changes, your subscription will auto-renew the monthly commitment with the current quantity on the renewal date.  No action required.
    • Note: A Monthly commitments cannot commitment can be converted to an Annual commitment on the renewal date.  If you wish to switch from monthly to annual, please contact your XTIUM (Evolve IP) account representative.
Tip

TIP

You can purchase the same subscription product with both Annual and Monthly (if available) commitments.  For example:

  • Qty (100) Microsoft 365 E3 (Annual) – For fulltime employees
  • Qty (25) Microsoft 365 E3 (Monthly) – For seasonal/temporary employees
  • 3 Year (3 YR) Commitment
    • Currently not available for any Office 365 or Microsoft 365 any 365 subscriptionproducts.
    • Currently only available for some Dynamics 365 (D365) subscription products.
    • 3 year commitments require upfront, annual payments for the subscription product.  There is no monthly billing.
    • The commitment locks in current pricing for 3 years.
    • You should choose a 3-year commitment for subscription products that will have very little change in quantities (e.g. full-time employees).
    • The commitment starts on the date the subscription licenses are added to your Office 365 tenant, not when you sign your XTIUM (Evolve IP) sales order.
    • The commitment locks in current pricing for 3 years.  If Microsoft increases the price of a subscription, your price will increase on the renewal date.
    • You must commit to a base quantity for 3 years.The  
    • For some 3-year commitment products, the base quantity can cannot be increasedat any time, and will be prorated for the commitment term (3 years).  You will still be billed monthly. Increasing a base quantity does not change the renewal daterequires a new purchase order with a new 3-year commitment. 
    • The base quantity can only cannot be decreased, or cancelled.
    • For most 3-year commitment products, they will automatically renew on the subscription's renewal date (once every 3 years).If you want to cancel or decrease the quantity of a subscription on its renewal date.  However, some products will expire on the renewal date.  To continue the subscription, you must notify XTIUM (Evolve IP) 30 or more days prior to the renewal date.  All changes are final on the renewal date.
    • If XTIUM (Evolve IP) is not notified of any changes, your subscription will auto-renew the 3-year commitment with the current quantity or cancel on the renewal date.  No action required.
Tip

TIP

You can purchase the same subscription product with both Annual and Monthly (if available) commitments.  For example:

  • Qty (100) Office 365 E3 (Annual) – For fulltime employees
    • Qty (25) Office 365 E3 (Monthly) – For seasonal/temporary employees


    Renewal Date Alignment for New Subscriptions

    If you have existing NCE subscriptions, a new subscription purchase will have its end date (renewal date) aligned with your other subscriptions.

    For example, you have an existing Microsoft 365 E3 (annual) subscription with a renewal date on 15-Feb-23Nov, and you want to purchase an annual subscription for Visio Plan 2.  The renewal date for the Visio Plan 2 subscription will be aligned with the Microsoft 365 E3 subscription, and the cost for the Visio Plan 2 subscription will be prorated.

    Info

    NOTE

    Renewal date alignment only applies to new NCE subscription purchases.  Alignments cannot be processed against existing NCE subscriptions.


    Subscription Transfers

    Info

    NOTE

    Microsoft does not allow subscriptions to be transferred allow subscription transfers between Microsoft CSP partners or channels. 

    If you want to transition your subscriptions to another partner or channel, you will need to finish your current subscription commitments first.

    If you are currently with a Microsoft CSP partner, and you want to switch to a new CSP partner, you must finish the subscription commitments with your current CSP partner, and schedule new subscriptions to be added to your Office 365 tenant by the new CSP partner.

    To make sure you don't have any service disruptions during the transition, you should plan on having subscriptions in your Office 365 tenant from both CSP partners at the same time, and budget that cost accordingly

    For more details, please refer to our Subscription Transfers KB article.


    Subscription Upgrades

    The Microsoft NCE framework purchasing model provides upgrade paths, which means upgrading from one paid subscription to another qualifying, higher-level, paid subscription. This allows you to upgrade to a subscription with added services.  Subscription downgrades are not allowed.

    However, if you are upgrading to a subscription that includes an add-on subscription you already have, we cannot cancel or reduce the quantity of the add-on subscriptions mid-term. 

    For example, if you have Office 365 E3 + Teams Phone Standard, and you want to upgrade to Office 365 E5 (which includes Teams Phone Standard), we will not be able to cancel or reduce the quantity of your Teams Phone Standard add-on subscription until its renewal date

    • Microsoft does not allow for subscription downgrades.
    • Upgrading the entire quantity of a subscription is recommended, but a partial quantity can be upgraded.
    • Multiple/Rolling partial upgrades are not supported.
    • Contact your XTIUM (Evolve IP) account representative to find out if your subscriptions are eligible for an upgrade.

    There are 2 types of upgrade paths, and here's what you need to know about them:

    • For Both Types of Upgrade Paths
      • All subscriptions we provide to your Office 365 tenant must have already been migrated to Microsoft's NCE framework.
      • We cannot upgrade any of your subscriptions if we do not have delegated admin permissions in your Office 365 tenant.
        • We cannot upgrade a current subscription if we already provide the new subscription in your Office 365 tenant.
      • The new subscription's commitment & renewal date will be the same as the current subscription, and any additional charges will be prorated for the term of the commitment.
      • You must coordinate with XTIUM (Evolve IP), and you must be available at the time of the upgrade in case there are any issues.
    • For the Full Upgrade Path
      • This is an in-place upgrade of all licenses (seats) from the current subscription to the new subscription.  The quantity will not be changed.
      • All user accounts assigned to the current subscription will be assigned to the new subscription automatically.
      • Azure AD Entra ID groups used for license assignments, or 3rd party tools used for license assignments, are not supported.  The full upgrade path only works with manual license assignments performed in the M365 admin center.
      • If the current subscription is provided by another Microsoft CSP partner, those licenses (seats) will not be included in the upgrade and the automatic user account assignments.  Be aware that this may produce unintended consequences to your user account license assignments.
    • For the Partial Upgrade Path
      • This is not an in-place upgrade for all licenses (seats) in the subscription because the quantities are being changed.
      • None of the user accounts assigned to the current subscription will be assigned to the new subscription.  It must be done manually.
      • We will only do a partial upgrade when the quantity of the new subscription is greater than the current subscription.  Quantity reductions are not allowed.
      • If the current subscription is provided by another Microsoft CSP partner, those licenses (seats) will not be included in the upgrade, and there may be unintended consequences.
    Info

    NOTE

    Please contact your XTIUM (Evolve IP) account representative if you wish to upgrade one of your Microsoft NCE subscriptions.


    Small Business (SMB) Subscription Limits

    Microsoft has a quantity limit of 300 licenses for each Small Business subscription in your Office 365 tenant.  However, Microsoft applied this limit at the channel level (CSP Partners, Resellers, Web Direct, etc.).  Therefore, a Microsoft customer could engage multiple channels, or multiple CSP partners, to circumvent the limit of 300 licenses.

    With Microsoft's NCE frameworkpurchasing model, this the above circumvention is being blocked.  Microsoft will be auditing the quantity of Small Business subscriptions in your Office 365 tenant, and will only allow 300 licenses across all channel purchasing channels and partners.  If you have more than 300 licenses for any Small Business subscriptions, you will need to reach out to all of your Microsoft partners to get this resolved.  If you choose not to do anything, you may experience service disruptions in your Office 365 tenant.

    Microsoft's Small Business Subscription Products

    • Microsoft 365 Business Basic
    • Microsoft 365 Business Standard
    • Microsoft 365 Business Premium
    • Microsoft 365 Business Voice
    • Microsoft 365 Business Voice without a Calling Plan
    • Microsoft Defender for Business


    Subscriptions for Service Migrations

    Whether you are migrating your on-premise services (or other cloud services) into a new Office 365 tenant, or you are migrating from one Office 365 tenant to another Office 365 tenant, you need to carefully consider your subscription commitments, and budget for the costs incurred while doing a migration.

    The most common on-premise migration (or other cloud service) to Office 365 is email.  When you migrate your mailboxes to Exchange Online, you have to pay for the subscriptions in your Office 365 tenant during the migration.  If you are doing an Office a 365 tenant-to-tenant migration, you have to pay for the subscriptions in both Office 365 tenants while doing the migrations.

    Info

    NOTE

    Please contact your XTIUM (Evolve IP) account representative if you need assistance with any of your migrations.