Microsoft’s New Commerce Experience (NCE) for the Public Sector

Microsoft have announced that they will begin to retire the legacy Cloud Service Provider (CSP) subscriptions for the public sector (Education, Government, and NonProfit customers) in preparations to move to them to the New Commerce Experience (NCE).

What is NCE and how does it impact public sector customers?

The Microsoft New Commerce Experience (NCE) is a significant development in subscription management, particularly for public sector customers. Let’s break down what NCE entails and how it impacts organizations:

What Is NCE?

• NCE is the latest iteration of the Cloud Solutions Provider (CSP) program.
• It applies to seat-based offers in Microsoft’s modern work (Microsoft 365 and Office 365) and business applications (Dynamics 365 and Power Platform).
• NCE simplifies subscription management by providing a unified platform.

Key changes from Legacy CSP to NCE:

• Commitment Periods:
  • NCE enforces both annual and monthly commitment periods.
    • Monthly commitment – You can increase and decrease your licenses per month and will only be liable for the month you are using the product. Monthly commitments come with a 20% price premium, essentially offering you flexibility versus lower cost.
    • Yearly commitment – Can be paid annually or monthly. You can increase licenses whenever you like but can only decrease your license count at the end of your yearly commitment. You will be liable for the entire subscription term,
  • Modification Window:
    • Customers have seven calendar days (167 hours) after activating subscriptions or at time of renewal to make changes.
  • They can adjust the subscription term, decrease quantity, or cancel during this period.
  • Afterward, the subscription is locked in for the agreed term.

Timeline:

• New subscription and renewal purchases must be on NCE as of August 1st, 2024.

Considerations for Public Sector Clients:

• Understand the transition and its implications.
  • Budget cycles
    • Many of our clients in government, education, and nonprofit sectors depend on fixed annual budgets. While some may align their spending with the calendar year, others follow a fiscal year that starts in July or October. With the New Commerce Experience (NCE) offering the most cost-effective annual commitment, it’s crucial to inform your customers about the impending adjustments to their payment and licensing arrangements. This will enable them to accurately incorporate these expenses into their forthcoming operational budgets.
  • Fluctuating user number
    • In the public sector, user counts for software subscriptions often vary significantly over the year due to changes in the number of interns, contractors, volunteers, or students. It’s vital to gauge the portion of users that may change to tailor their license plans accordingly. The most cost-effective strategy is to assign annual subscriptions to the stable core users and opt for monthly subscriptions for the rest to maintain flexibility.
  • Security
    • Switching to NCE is an excellent chance to reassess and enhance the security stance of your public sector clientele. Many are still reliant on outdated products that haven’t been updated in years, potentially harboring security flaws or compatibility issues. By transitioning to updated SKUs, you can aid your clients in fortifying their security and streamlining their security-related expenditures.

In summary, NCE streamlines subscription management, but organisations need to prepare for the shift. Work closely with your Account Manager to ensure eligibility and a smooth migration.