Exploring changes to Microsoft New Commerce Experience

On 01 September 2024, Microsoft will begin rolling out their New Commerce Experience (NCE) for all non-profit cloud subscriptions. Microsoft launched the initial programme in January 2022 for commercial licenses, but it is just now impacting government and non-profit licensing. 

So what does that mean for your organisation? Let’s explore the changes.  

Changes to payment options 

Organisations on a monthly subscription will have fees increased by 20%. There is currently a promo period, which means the price increase won’t come until after 31 December 2024. 

The quarterly and semi-annual payment options will be removed. This means organisations on this payment type will be migrated to a monthly payment option. 

Moving to an annual subscription option is far more cost effective. But this comes with its own challenges. Many charities pay hundreds or even thousands of pounds a month for their subscriptions – an annual fee for these license counts may not be feasible. 

People who pay annually via bank transfer also face a challenge. The current subscription type for annual bank transfer users allows them to add and remove licenses mid-subscription – allowing more flexibility.

This subscription type is moving to a monthly payment method, which means that annual bank transfer users will need to migrate their subscriptions to the new annual subscription to avoid the 20% increase. 

Changes to refunds and cancellations 

A further challenge for bank transfers organisations – and indeed everyone – is that Microsoft has reduced the time payment can be received for a subscription before it automatically cancels. Organisations must now make payment within three days of their renewal date, or they will have their subscription cancelled. It is important for bank transfers organisations to send funds in plenty of time before renewal and for credit or debit card users to ensure their stored credit card has funds and has not expired. 

Refunds provoke another challenge. Users can only obtain refunds within the first three days of the subscription being provisioned. This potentially means non-profits may pay for a large annual subscription that they do not need after a few months and for which they cannot receive a part refund. Organisations on monthly subscriptions will not receive a refund for the month for which they have paid but annual users could pay large sums for a subscription they may not use in the near future.  

Ideas for cost reduction 

With these upcoming changes from Microsoft, it’s certainly worth reviewing your financial commitment to your Microsoft Cloud subscription. Here are ideas that could reduce cost. 

Move to annual payment 

It may prove difficult for some charities, but the most obvious option is to move to annual subscriptions for all of your licenses, which will cost your organisation less in the long run. 

Reduce license count 

Consider how many licenses you are using. If you’ve got lots of unused licenses in your 365-admin portal, it may be worth reducing to save on unnecessary cost. 

Mix of month and annual licenses 

Though annual options costs less, many organisations may adjust their license count regularly, meaning they could end up paying full price for a license they don’t get the full benefit of.  

To counteract this, it may be useful to have a mix of annual licenses that you will always need and then monthly licenses you can easily reduce or add to at a later stage. You may be paying 20% more for the monthly licenses, but if you are not a full year out of them this could be a potential cost reduction. 

Change subscription type 

It’s possible that you are using a subscription that comes with lots of extra features you are not using. It could be worth exploring what specific features you need from your Microsoft Cloud subscription, allowing you to potentially change your license to a cheaper option. 

Is my organisation affected by these changes? 

Yes, but the way an organisation is affected varies depending on the subscriptions in use. It could be as simple as changes to how funds are paid for the description in a timely manner. Or it could mean potentially migrating your subscriptions to make them cost-effective.  

You can click here to submit your organisation’s details and we will respond with the impact of the changes to your organisation specifically and advise your next steps.