Managed service providers (MSPs) have a bit of hesitation about the changes to Microsoft‘s Cloud Solution Provider (CSP) program. It’s hard to blame them though, as it’s the largest update the company has made since it launched Office 365 in 2011. Though Microsoft’s changes aren’t going into full effect until 2022, there are several questions businesses have about what’s to come and a few best practices MSPs need to know to navigate through Microsoft’s updates to subscription terms, cancellation policies, and pricing.
Explaining New Commerce Experience
Microsoft’s new commerce experience (NCE) will take the place of legacy CSP programs as they exist today. As a part of Microsoft’s global effort to simplify and streamline, the NCE will make the selling process, requirements, and capabilities much more consistent across the Microsoft ecosystem. Microsoft announced January 2022 as the general availability date for commercial CSP transactions and incentives for new commerce. The multistage, multiyear investment in the CSP program is meant to help partners better support their customers’ digital transformation efforts.
How Changes Will Impact Subscriptions
In March 2022, Microsoft will remove CSP partners’ ability to order new subscriptions on the legacy CSP platform. The same will happen for all legacy CSP renewals on June 30. After these dates, new subscriptions and renewals must be placed via the new commerce experience. Partners may transition customers to the NCE without waiting for legacy subscriptions to end.
Microsoft is making one-, 12-, and 36-month subscriptions available to CSP partners in the NCE. Monthly subscription terms will be priced 20% higher than the monthly cost of annual or multiyear subscriptions, consistent with the terms of the Microsoft Direct program. Multiyear subscriptions enable a customer to lock in the annual pricing for three years, consistent with Microsoft’s Enterprise Agreement terms. Customers may have a mix of annual and monthly term subscriptions for the same service.
Incentives and Rebates
Microsoft incentive rebates will be available for transactions in the NCE. Starting October 2022, Microsoft incentive rebates will be removed from the legacy CSP platform, meaning eligible partners will only receive these incentives for seats transferred to or licensed through the NCE by that time.
Microsoft will run a promotional period for new commerce seat-based offer transactions starting January 2022 and ending in March 2022. During this promotional period, monthly term pricing will be the same as the standard monthly rate for annual term transactions. Annual term transactions will be priced at a 5% discount during this promotional period.
Cancellations and Refunds
Orders may only be cancelled within the first three calendar days of a transaction, with refunds prorated for the cancelled order. The first day an order is placed counts as Day 1, with the second day beginning at midnight UTC, including weekends and holidays. This limited cancellation window applies to every new, add-on, or renewal transaction. The enforcement of a cancellation policy in new commerce is designed to bring the CSP program into alignment with other purchase motions in NCE, as well as existing Microsoft licensing programs, such as the Enterprise Agreement. This ensures that all customers have a consistent purchasing experience and are subject to the same terms and conditions.
Price Increases
In August 2021, Microsoft announced commercial pricing increases for six key Microsoft 365 packages, effective March 2022. Those pricing increases will apply to the one- and 12-month term pricing and will range from an additional 8.5% to 25% higher price. If a subscription is scheduled to increase in March, the customer may postpone the increase and save an additional 5% on their subscriptions by committing to an annual agreement in new commerce before the March price increase takes effect.
The rollout of the NCE is an important reminder that Microsoft customers need an MSP that will be a true partner now more than ever to help guide them through this transition as well as map out how NCE will affect their business and get ahead of renewals. While the changes maybe seem overwhelming, Microsoft customers can benefit from the transition if they play their cards right and rely on their MSP properly, especially because every customer will be in a different circumstance.
JUSTIN GILBERT is senior director of channel marketing at Zix | AppRiver.
