In the rapidly changing world of software licensing, staying informed about vendor policy shifts is crucial. Recently, Microsoft, a dominant player in enterprise software, has introduced several significant changes to its licensing models, impacting organizations of all sizes. In response, this blog sheds light on these developments and offers actionable insights for IT asset management (ITAM) professionals.
Understanding the New Commerce Experience (NCE)
📅 Announced: March 26, 2025
🔗 Microsoft Partner Center – March 2025 Announcements
Microsoft’s New Commerce Experience (NCE) represents a shift in how organizations purchase and manage Microsoft 365 subscriptions. Key aspects include:
- Commitment Terms: Microsoft changes under the New Commerce Experience (NCE) require organizations to choose between monthly, annual, or three-year subscription terms. Notably, monthly subscriptions come with a premium price and limited flexibility.
- Cancellation Policy: There’s a 72-hour window post-purchase during which subscriptions can be canceled for a prorated refund. Beyond this period, cancellations are not permitted until the end of the term.
- Pricing Adjustments: Starting April 1, 2025, monthly billing plans for annual and triennial subscriptions will incur a 5% price increase compared to upfront annual payments. This change aims to standardize billing structures across Microsoft’s offerings.
💡 Action: These Microsoft changes require ITAM professionals to revisit renewal calendars and budgeting processes to avoid locking into suboptimal terms and pricing.
Global Licensing Realignment: Microsoft 365 and Teams
📅 Announced: November 12, 2024
🔗 Microsoft Licensing News – Teams Decoupling
Effective April 1, 2024, Microsoft restructured its Microsoft 365 and Office 365 offerings globally. The key modifications include:
- Decoupling Teams: Microsoft introduced new versions of Microsoft 365 and Office 365 that no longer include Teams by default. Organizations can now purchase these suites without Teams and add it separately as a standalone SKU if needed.
- Impact on New Customers: New enterprise customers must now purchase a Microsoft 365 or Office 365 suite without Teams and then add Microsoft Teams Enterprise as a separate product if required.
💡 Action: This realignment offers organizations greater flexibility in tailoring their collaboration tools but requires careful consideration during procurement and renewal processes.
Read our other blog on how to “Right-Size Your Mircorosft 365 Licenses Before Your Renewal“
Phasing Out “From SA” Licenses
📅 Announced: December 15, 2023
🔗 Microsoft Partner Center – November 2024 Announcements
In a related shift, “From Software Assurance” (From SA) licenses, which provided discounted rates for organizations transitioning from on-premises to cloud services, are being phased out:
- Effective Dates: As of February 1, 2024, for Microsoft 365 and April 1, 2024, for Dynamics 365, new From SA licenses are no longer available for purchase.
- Renewals: Existing From SA licenses can continue to be renewed in like quantities, but organizations must plan for eventual migration to full User Subscription Licenses (USLs).
💡 Action: ITAM professionals should assess current From SA licenses and develop strategies for transitioning to alternative licensing models to ensure compliance and cost-effectiveness.
Strategic Recommendations for ITAM Professionals
Given these significant changes, ITAM professionals should consider the following actions:
- Start by Conducting a Comprehensive License Audit: Evaluate current license usage to identify underutilized or redundant subscriptions, ensuring alignment with actual organizational needs.
- Then, Assess Subscription Terms: Analyze the cost implications of different subscription terms under NCE, considering the trade-offs between flexibility and pricing.
- Next, Plan for Licensing Transitions: Develop a roadmap for transitioning from SA licenses to full USLs, accounting for budgetary and operational impacts.
- Additionally, Stay Informed: Regularly consult official Microsoft licensing news and updates to remain abreast of policy changes and new offerings.
- Finally, Engage Stakeholders: Collaborate with procurement, finance, and IT departments to ensure a unified approach to licensing decisions, balancing cost, compliance, and functionality.
Conclusion
Currently, Microsoft’s licensing landscape is undergoing substantial transformation, presenting both challenges and opportunities for organizations. By staying informed and adopting a proactive, strategic approach to license management, ITAM professionals can navigate these Microsoft changes effectively, optimize costs, and ensure compliance.
Need help making sense of these Microsoft changes or planning your next move? If so, contact us to get expert guidance on Microsoft licensing strategy, cost optimization, and compliance.
