Microsoft’s licencing changes and what they mean for your business

As Microsoft prepares to roll out its first substantive commercial licence price increase, what can you do to minimise the impact?

Next month, Microsoft is implementing some significant changes to its CSP (Cloud Solutions Provider) licence structure — as well as its licence pricing. If your IT estate includes Microsoft licencing, it’s essential that you’re aware of these changes and the impact they’ll have on the way you purchase and manage your licencing products.

And if you don’t act now, you could see your monthly licence fees increase by as much as 44%.

What’s changing?

Microsoft has retired its Open License program, and at the same time is introducing a new CSP program called New Commerce Experience (NCE) for purchasing its software and cloud services, including Microsoft 365. From March, all new and renewing subscriptions will now be purchased through NCE.

The most noteworthy difference is the introduction of enforced commitment terms. Today, there are no commitment terms and licence quantities can be reduced to nil at any time. With NCE, subscriptions will be offered with 1-, 12- and 36-month terms. During these terms, cancellations and licence reductions are not possible. However, licences can be added into existing subscriptions and upgrade options are available.

Alongside this new platform comes a new billing model and a price increase of between 9 and 20% for some of the main subscriptions from 1st March — and organisations that wish to stay on a monthly model for these will face a further 20% increase.

A breakdown of the three new licencing terms as they currently stand is below.

Why is it changing?

According to Microsoft, the changes simplify the purchase experience, reducing licencing complexity and long-term costs while retaining its flexibility.

Since the launch of Office 365 over a decade ago, the pricing has largely remained the same. With the growth, adaptation and advancement of the tools within Microsoft 365 — as well as its popularity with over 300 million commercial paid seats — a price increase has been anticipated to reflect the increased value of the tool suite.

What can you do?

With the rollout of these changes just around the corner, you’re now at a critical point when it comes to maximising your IT budget. Working with an experienced and trusted CSP provider to audit your IT estate will ensure that you’re fully leveraging the features of your existing licencing. And by rationalising and consolidating your licences where possible, you’ll have peace of mind that you’re committing to the most cost-effective way to purchase your Microsoft licencing despite the forthcoming changes.

At Bistech, we take the time to understand your long-term business objectives and provide ongoing support and recommendations. To find out more about how we can help with your Microsoft subscription licencing and optimise your spend against usage, call our specialist team today on 03330 11 22 55.