February 1, 2022

Now available: Seat-based offers in the new commerce experience

By Alex Perez

Two men working in front of a multi screen environment.

Microsoft’s goal of providing a unified new commerce experience (NCE) took a big step forward with the January 10, 2022, launch of commercial seat-based offers for Microsoft 365, Dynamics 365, Power Platform, and Windows 365 in the Cloud Solution Provider (CSP) program. Simultaneously, as part of the launch, an array of new features and functionalities have been and will be introduced to CSP provisioning and billing, in response to partner requests and customer needs.

You can now learn more about the new commerce experience by visiting the new NCE landing page on the Partner Network!

Two time-bound promotions are currently available for direct bill and indirect CSP partners. The promotions run through March 31, 2022, for annual offers, and through June 31, 2022, for monthly offers. To see which ones you’re eligible for, go to the promotions page in Partner Center.

We’re also excited to announce that we’ve extended the availability of incentives for Legacy seat-based offers in CSP from October to December 31, 2022.

A brief overview

Part of a multi-phase journey that’s changing the way customers transact with Microsoft, the new commerce experience for seat-based offers in CSP provides partners with greater standardization of offers and terms; gives customers more choice and flexibility in how and where they purchase; and enables partners to sell/upsell to a larger set of existing and new customers.

By consolidating its sales programs to a single platform, Microsoft is making it easier for customers to buy and manage assets with cloud offers such and perpetual software also now widely available. The result is a more intuitive and streamlined purchase experience that will benefit both you and your customers.

NCE_Partner_Opportunity

Learn more with this simplified look at the changes in the new commerce experience, including where partners should be focused in their NCE adoption journey.

Get ready to sell

To prepare to sell these new offers, check out the readiness collection.

Still have questions? Find answers in the FAQ below.

Question Answer
Is Microsoft changing the focus on CSP with the new commerce experience? No. We’ll continue to invest in the CSP program as one of our key sales motions for SMB, as well as in Microsoft’s overall commerce experience, to provide the differentiated offers and capabilities partners need to grow their business.
Will the new commerce changes apply to all types of CSP partners? Yes. All partner types in CSP (Indirect Provider, direct bill, indirect reseller) will be included in the new commerce experience.
Will I need to sign or accept any new or different agreements? The Microsoft Partner Agreement (MPA) that partners accept to activate their CSP tenants will continue to be the standard agreement for partners. Customers will continue to accept the Microsoft Customer Agreement (MCA) that governs their purchases. Neither partners nor customers will be required to sign or accept again the MPA or MCA, respectively, as part of this new commerce transition.
Will legacy and new commerce experiences coexist and, if so, for how long? New orders for legacy commercial subscriptions can be placed until March 10, 2022, and renewals of legacy commercial subscriptions can made until July 1, 2022. We want partners to have ample opportunity to become accustomed to the new commerce features and functionalities, migrate legacy subscriptions to the new commerce experience, and adjust customer billing and accounting operations based on the standardized new commerce invoicing process and schedule. Any annual or multi-year term subscriptions on the legacy platform will remain in effect with existing legacy pricing and policies until the end of their respective subscription terms.
What specific benefits will my company receive from this migration? Here are just some of the enhancements and benefits that partners and customers can take advantage of as a result of this transition:

·        A new monthly term that allows customers to cancel at the end of any month with no further payment obligation

·        More customer billing options, such as annual billing for multi-year offers

·        More options and flexibility in managing subscriptions (e.g., scheduling subscription changes such as SKU conversions at renewal)

·        New subscription upgrade and seat assignment capabilities

Will all of the offers in the existing CSP catalog be available to sell in the new commerce experience catalog? At the October launch, only commercial seat-based offers were made available for provisioning in new commerce. Government, education/academic, and charity/non-profit offers will be added to the new commerce catalog in the future (date TBD).
Will there be any special pricing or discounts to encourage partners to move existing business or put new orders on new commerce in CSP? Yes. Starting on January 10, 2022, monthly and annual term commercial seat-based offers in new commerce will be priced at a discount—monthly term offers at the regular price of annual term offers (instead of the usual 20% premium pricing), and a 5% discount off annual term offers. These discounts will apply to all seat-based offer types except Windows 365 and for up to 2,400 seats per subscription. Monthly term promotional pricing will be in effect through June 2022; annual term promotional pricing will be in effect through March 2022, with the possibility of being extended through June 2022 (with advance notice provided to partners; promo discounts not applicable in Brazil). More details can be found in the Global Promo Readiness Guide and the Operating Guide for this release.
What is the new cancellation policy in new commerce and how does it differ from the legacy policy? In the legacy CSP experience, an option to cancel a subscription was not available. Instead, a partner could suspend a subscription to stop the partner billing for it, and the subscription would eventually expire if not renewed at the end of the term. In new commerce, a seat-based subscription of any term length can be cancelled, but only within the first 72 hours of the term, with prorated refund (proration calculated daily). After that first 72 hours, no cancellation is possible; the partner will continue to be billed for the remainder of the term or will not receive a prorated refund if the subscription was billed up front for the entire term.
Does the 72-hour window for cancellation and seat reduction in new commerce only apply to business days? For example, if I order a subscription on Friday, do I have until the following Wednesday to cancel? And does the cancellation window also exclude holidays? The 72 hours at the beginning of each seat-based subscription term in new commerce, during which a partner can cancel the subscription or reduce seats on that subscription, includes all days of the week and does not exclude weekend days or holidays. So, if a subscription is purchased on a Friday, the partner has until the following Monday to cancel or reduce seat counts.

Note that the 72-hour cancellation and seat-reduction period begins at the time on the clock at which the subscription order or renewal is made.

What are the refund policies for cancellation? A partner can receive a prorated refund of the initial subscription payment of the term only within the first 72 hours after the order is placed or renewed (proration calculated daily). After those first 72 hours of the term, the subscription cannot be canceled and payment for the remainder of the term must be made by the partner.
Will a customer be able to increase or reduce seat counts on a subscription in the middle of the term in new commerce? The seat count on a subscription can be increased during the middle of an annual term, with billing adjustments reflected on the next invoice and reconciliation file. But if more than 72 hours have elapsed since the subscription order was placed or renewed, the seat count cannot be decreased until next renewal of the subscription.

This policy is in line with current market practices for per-user subscription plans. For monthly term subscriptions, the seat count can be increased or decreased at renewal at the end of the month term.

A seat-count decrease within the first 72 hours of a subscription term (after either initial purchase or renewal) can be made via self-serve in Partner Center or through the API.

With the new commerce experience for seat-based subscriptions, when a customer purchases an annual-term subscription from Partner A, are they allowed to move that subscription to Partner B within that year’s term? Or are they locked in with Partner A until the term ends at the end of the year? No. Moving subscriptions across partners is not a supported feature in new commerce. Partners can cancel subscriptions but must adhere to the cancellation policies regarding their committed term.

For example, if the customer purchases a subscription from Partner B after the first 72 hours of the term of the subscription purchased from Partner A, Partner A will not be able to cancel that original subscription on behalf of the customer and there will not be any refund for the remainder of the annual term of the subscription with Partner A. In that case, it would be best for the customer to wait until the time of renewal of the Partner A subscription to purchase the same SKU from Partner B and then to not renew the subscription with Partner A.

When will I be required to move existing subscriptions to new commerce? Microsoft recognizes that CSP partners will need time to operationalize the provisioning, billing, and policy changes in new commerce and to migrate existing (legacy) subscriptions to the new commerce platform, so we’re taking a phased approach to requiring partners to transition their subscriptions.

·        Phase 1 – March 10, 2022: Partners can no longer place new commercial subscription orders on the legacy platform.

·        Phase 2 – July 1, 2022: Partners can no longer renew legacy commercial subscriptions on the legacy platform.

Please note that existing legacy subscriptions can remain in effect with the legacy billing date, pricing, and policies until they reach the end of the term, if the partner and customer so choose. But starting July 1, 2022, all legacy commercial subscriptions must be renewed on new commerce. Based on that date, the commercial subscription migration from legacy to new commerce will need to be completed by the end of June 2023, with the exception of any remaining legacy three-year Dynamics 365 subscriptions. When a legacy subscription reaches the end of its term and can no longer be renewed on legacy, the partner will not receive an automatic notification and the legacy subscription will not automatically renew into new commerce. The partner will need to manually renew the subscription on new commerce and choose either an annual or monthly term and the billing frequency, as well as the seat count.

Though legacy subscriptions can still be renewed on the legacy platform between March 10 and July 1, 2022, an existing legacy subscription that has not yet reached the end of its term cannot be repurchased on the same SKU on legacy as a means of extending the legacy term end date, as this would be considered a new subscription order on legacy and would therefore be blocked after March 10.

Will I continue to be paid partner incentives rebates on legacy subscriptions during the new commerce transition? All legacy commercial subscriptions in CSP will earn incentives rebates until October 1, 2022. For example, a legacy annual-term commercial subscription purchased in February 2022 and billed monthly to the partner would provide about 7 months of rebates to the partner out of the 12 months of the term. As a result, for commercial subscriptions purchased or renewed on the legacy platform after October 2021, partners may want to consider migrating them to new commerce before these subscriptions reach their respective renewal dates. Note that incentives rebates have been paid for new commerce transactions since Oct. 14, 2021, so moving a legacy commercial subscription to new commerce by September 30, 2022, ensures that there will be no interruption of rebate payments to the partner.
Why do monthly term subscriptions cost more than annual-term ones in new commerce? The new monthly term subscriptions in new commerce are billed by Microsoft at a 20% higher price than annual term offers of the same type because they give the partner the ability to cancel on behalf of the customer at the end of any monthly term, instead of incurring additional payments for the remainder of an annual term. The premium pricing is in line with standard practice in the Microsoft Web Direct program and in other industries—for example, an online media subscription in which the customer pays more for a month-to-month subscription than for an annual term commitment.

Note that some commercial seat-based offers in new commerce do not have the monthly term option currently available; see the CSP catalog and pricing list to confirm monthly term availability.

Can monthly term subscriptions be changed to annual term easily in new commerce? Some businesses need subscriptions or additional seats only during peak times of year, for example. Yes. A customer’s subscription can be changed from monthly term to annual term in new commerce. The following month’s reconciliation file will include a credit for the prorated difference that’s paid in advance (reflecting the 20% less-expensive price for annual), and the annual term charge will be effective from the date the subscription term is changed. However, an annual term subscription in new commerce cannot be changed to a monthly term subscription except for the first 72 hours of the term (through cancellation and repurchase) and at the time of renewal, as the annual term subscription cannot be canceled after the first 72 hours of the term.
Can the customer have a combination of annual and monthly terms on the same offer to allow for seasonal or temporary users on the monthly term? Yes. The customer could have both monthly term and annual term subscriptions for the same seat-based offer at the same time with the appropriate number of seats in each term to accommodate its permanent and seasonal employees.
When I suspend a customer’s subscription for non-payment or if the customer is temporarily unable to use the subscription due to business disruption, how do I resume the active subscription when the customer is paying again, or their situation returns to normal? To resume a subscription, you would simply need to go to the subscription account in your tenant and change the status from “Suspended” to “Active.” The customer’s access to the subscription would then be restored with no loss of data or user accounts. You can perform this resumption step at any time during the subscription term. Note, however, that unlike legacy, the billing for the subscription will continue during the period of suspension.
Will I be able to sell Windows 365 as part of the new commerce experience in CSP? Windows 365, announced in July 2021 and launched as a product in August 2021, is the world’s first cloud PC for every organization, securely streaming the Windows experience—including desktop, apps, processing power, storage, and more—to any customer device.1,2 The cloud PC experience can scale to fit customers’ needs and is easy to deploy without the need for VDI expertise.

Windows 365 was made available in the current CSP experience in August 2021, and in CSP new commerce in October 2021. The following options and conditions apply to Windows 365 in CSP new commerce:

·        It’s available only through the new monthly term offer (compared with availability only with annual terms in the current CSP experience).

·        The pricing for the monthly term offer for Windows 365 in new commerce is the same as for annual term seat-based offers.

·        The monthly term option in new commerce allows customers to try Windows 365 with no long-term commitment and to adjust the number of users monthly with per-user pricing.

·        The same cancellation policy applies to Windows 365 in new commerce that’s in effect for all other seat-based offers.

·        Any promos that are available for other seat-based offers in new commerce will not apply to Windows 365.

·        Lastly, new Windows 365 features and future enhancements will only be made available on the new commerce offer in CSP.

1Internet access required, fees may apply.
2Please see Windows 365 FAQ for a list of supported devices.

Along with the invoice changes, will the monthly pricing lists reconciliation files be provided differently? Yes. As part of the addition of license-based offers to new commerce, partners in CSP will be able to integrate monthly pricing lists via API and will be provided with access to a single reconciliation file updated hourly.
I’m billed by Microsoft for Azure plan subscriptions on the 8th of each month. Will that be the case for Microsoft 365 and other seat-based offers? Yes. Monthly partner invoices for new commerce transactions of any offer type will be posted in the partner tenants between the sixth and eighth day of each month. As a result, partners should adjust their internal accounting and billing schedules and systems to accommodate this standardized new commerce billing date for seat-based offers sold in new commerce.

With the inclusion of seat-based offers in new commerce, partners will be able to track and manage charges for these offers in the Azure Cost Management tool, along with Azure plan. More details are available here.

Next steps

Learn more with these additional resources:

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