Mintivo update on Microsoft's 2022 licencing pricing increase
Changes to Microsoft Licencing
When Office 365 (or as we know it Microsoft 365) launched in 2011, none of us could have foreseen the momentous impact the suite would have on the business world. Now, 10 years, 1,400 new products, and over 300 million users worldwide later, 365 is arguably one of the most well-known and well-loved commercial suits out there.
Although a lot has changed since 2011, it’s fair to say that the Microsoft licencing structure has remained largely unaltered. It, therefore, wasn’t a surprise when Microsoft announced back in the summer of 2021 that there will be a new licencing overhaul, designed to reflect the true value of the products that have changed our lives, especially in the last 18 months.
For you, the end-user, there are a few things worth noting. As your Managed Service Provider, we will be handling these changes for you, and while we take the hassle off your hands, we need to inform you of what’s going on. Please note these are Microsoft’s changes, not ours.
The main and most important change to you is the change in pricing.
As of the 1st of March 2022, licencing prices across the board will be increasing, these increases will vary depending on the licence type itself. There are also new subscription term options: you can choose to commit to monthly subscriptions, annual subscriptions (paid monthly or upfront), or 36-month* subscriptions.
It is worth noting that for the new monthly term, which allows you the flexibility to remove and cancel seats on a monthly basis, there is a 20% premium. These terms can be combined with annual subscriptions to help balance costs in a hybrid solution.
Another major change is how the licences can be managed. On the current structure, named Legacy, licences can be purchased and cancelled at any time with no extra charges. For instance, a licence can be purchased and then removed a week later, with no commitment or repercussions.
On the new licencing structure, named New Commerce Experience (NCE), this is not possible. Licences can be purchased at will, but after 72 hours they cannot be removed, cancelled, or deleted and they will need to be paid for until the end of the licencing term period with no refund, no exceptions. For example, if your purchase a new licence, once the 72 hours is up, that licence will need to be paid for until the end of its term. These new cancellation policies are consistent across all licences. You will no longer be able to decrease the number of seats you have purchased mid-term – any cancellations must be made within 72 hours of purchase.
Are you ready for the change?
We appreciate this is complicated. We encourage you to reach out to us for questions and next steps and we can make suggestions on a case-by-case basis for you on how to proceed. These are changes for us too and we want the process to be as smooth as possible for everyone.
What this means for you
There will be no more open licencing.
NCE will no longer allow users to reduce quantities on annual agreements. At the moment, licence quantities and types can be reduced and changed during the yearly agreement as and when, but with the New Commerce Experience, that will no longer be an option. The customer is committing to that quantity for an entire year and is only able to increase that quantity. Even if a user leaves, their licence cannot be cancelled, however, it can be reassigned when needed. For example, if someone leaves and frees a licence, a new starter can take that licence and use it.
Your options and next steps
Microsoft has offered that any licences purchased before the 28th of February on an annual subscription will be locked into the current price for a year and will not be moved onto the new pricing structure until 2023. We recommend this as it ensures that your licence pricing does not increase for another year.