Understanding Microsoft's New Commerce Experience Auto-renewals, Grace Periods and Scheduling Changes
What is the New Commerce Experience?
Microsoft has many licensing programs that often contradict, overlap and confuse the entire industry, and they recently launched a New Customer Experience platform that enables them to sell products under fewer, more aligned programs. Their goal is to help customers be more flexible, move faster and, ultimately, provide greater value. The end vision is that customers will buy through the Microsoft website, through a Microsoft sales rep, or through the Cloud Service Provider (CSP) program and only need to sign one contract. They are accomplishing this goal over many years, as Azure was moved to the New Customer Experience platform over the last two years, and now licensing is being moved.
Microsoft provides licensing subscriptions for products like Microsoft 365, Power BI, Exchange Online, etc. Today those subscriptions are ordered for a term (1 Year) and then auto-renew on their anniversary date. For several years, Microsoft has allowed CSPs like OneNeck to reduce the number of licenses or even suspend a subscription, and the CSP was not charged by Microsoft, nor the customer charged by the CSP. This was often discussed with clients as being a Pay-As-You-Go monthly model and a benefit of partnering with a CSP. All subscriptions were set to auto-renew, because you could change them at any time. Now Microsoft has labeled the old program the “legacy” program and is discontinuing those products over the next year and a half (to be completed June 30th, 2023).
As the New Commerce Experience products replace the legacy products, you will still see the same or very similar names like M365 Business Premium; however, the rules for ordering and managing the subscriptions have changed.
- Microsoft is now enforcing the cancellation policy, and you will no longer be able to reduce or cancel a subscription after 168 hours from order.
- You can add to a subscription at the same rate anytime during the contract, or you can upgrade to a higher level package, but you cannot reduce or cancel it. A service provider can schedule the cancellation or reduction, but it will not occur until the end of the term.
- Microsoft has added a new monthly term subscription at a 20% premium to provide flexibility when you cannot commit to a full year. The monthly term subscriptions are available for most, but not all, products.
- When a New Commerce Experience subscription is created, it is automatically set to renew at the end of the term – auto-renewal. The service provider has the option to go back in after the order and uncheck the box, giving the client the ability to automatically cancel the subscription unless a manual renewal occurs.
As of October 14, 2021, newly purchased licensing subscriptions (NCE) are set to auto-renew at their designated renewal date as a default, but this auto-renew component can be toggled on and off. Software subscriptions purchased before October 14, 2021 don’t have auto-renew turned on and are not eligible for auto-renew to be applied. If a software subscription is either ineligible for auto-renew, or auto-renew is turned off, a partner can see the expiration date on the subscription detail page; otherwise, a renewal date is visible.
There are implications to unchecking the box. If a subscription is not renewed by the expiration, a grace period starts. The grace period is 7 days for a monthly subscription and 30 days for an annual subscription. If you renew the subscription after the expiration, the term will start back immediately after the expiration date, and there is a risk of loss of service or even loss of data.
Microsoft has added a new change scheduling feature that can be used as a best practice to control the expiration. If you want a subscription to expire or change, we can schedule the cancellation or reduction to occur on the expiration date. This can be planned well in advance and is our recommended approach because it has the lowest risk to availability of the service and associated data.
We’re here to help.
There is a lot to wade through when it comes to these licensing changes, and most IT professionals are too busy to dig into them – but we’re here to help. We can review your current Microsoft licensing and make recommendations for optimizing your spend, making sure you get the most from your Microsoft investment.