21 Feb Could you save up to 25% on your Microsoft licensing?
Could you save up to 25% on your Microsoft licensing?
Microsoft requires either a one-year commitment or a significant premium on monthly terms starting in March 2022. Learn more about this change and how to best prepare
Microsoft is Changing CSP Licensing
Any organisation utilising CSP licensing needs to be aware of Microsoft’s changes, which come into effect on 1 March 2022.
Microsoft will be offering Monthly, Annual, and Three-Year subscriptions. All subscription terms will only be able to be cancelled or reduced within 72-hours after purchase, and customers will be stuck with license counts until the end of their subscription term.
- Yearly Term:We expect the yearly term to be the most popular. Pricing is similar to what customers are paying today, and most CSP providers already require a one-year term – even when Microsoft allowed for monthly changes.
- Monthly Term:If an organisation wishes to retain the ability to decrease seat counts/downgrade licenses at frequent intervals, then they will need to put those seats on a monthly subscription. However, Microsoft will charge a significant premium for this option of 20%.
- Three-Year Term:The current plan is to only offer three-year terms for a limited set of offerings, including Dynamics 365. The potential benefit here is that customers get locked into the pricing for three years to avoid potential future price increases across that term.
Microsoft CSP Partners, like CAE, will be able to continue transacting new CSP licenses without these changes until 1 March 2022. We can also work with your organisation to take advantage of pricing models, licensing structures, and promotions when applicable. Further promotional pricing details are still to come and will help mitigate Microsoft’s general price increase, which will also occur in March 2022.
You could avoid the following price increases coming into place from 1st March 2022:
|Microsoft 365 Offer||Price Increase|
|Microsoft Business 365 Basic||20%|
|Microsoft Business 365 Premium||10%|
|Microsoft 365 E3||12%|
|Office 365 E1||25%|
|Office 365 E3||15%|
|Office 365 E5||9%|
How Your Organisation May Be Affected
Customers are encouraged to purchase the monthly term option at the 20% premium markup if they have seats that are not able to commit to an annual term. This allows organisations to cancel at the end of the monthly term with no further payment obligation. Monthly subscriptions are encouraged for organisations with seasonal workers or if downgrading/changes to subscriptions are anticipated. Some businesses will also want to select the monthly term for a portion of their workers and one-year terms for the remainder. For most organisations, we believe that the one-year term options will be the most popular.
After March 2022, for new CSP transactions, organisations are not able to decrease licensing (outside of the 72-hour cancellation window). Conversions between different types of licenses are possible but limited, and organisations must confirm with their CSP partner about the upgrade and downgrade paths. Organisations will be able to utilise partial upgrades, full upgrades, and seat additions:
- Partial Upgrades:Only some of the seats are being upgraded within the same license. The end date is inline with the original subscription end date. An example of this would be adding a new M365 E5 for phone system functionality for a subset of users like a particular branch office.
- Full Upgrades:All seats are being upgraded. An example of this would be wanting to move from E3 to E5 type functionality.
- Seat Additions:Seat additions mid-term of the same license will be prorated and co-termed to your original subscription end date. An example of this would be hiring a new set of incremental employees who need licenses.
CAE have put together some recommendations for organisations to help minimise cost and the headaches associated with transitioning:
- Make licensing changes before 1 March 2022: If you have a current subscription, you can modify or turn down licenses without penalty before 1 March 2022 if you are on an annual contract. CAE can work out a plan to optimise savings for your specific environment moving forward.
- Licensing structure:Committing to annual licenses after 1 March 2022 will save your organisation money compared to monthly subscriptions. Minimise your monthly licenses to only users who are seasonal or temporary. Some CSP Partners will offer monthly billing even when you commit to an annual subscription, although other partners may not be able to offer that. CAE can help discuss different options and structures for your specific environment.
- Connect with Interlink: There are numerous paths available, and CAE are able to discuss which is best for your organisation moving forward to optimise licensing and save money.
If the idea of paying for three years up front puts you off, you can opt for a 12-month contract or even to pay monthly for a one or three-year contract, locking in your lower price, for longer.
For many businesses, avoiding a potential 25% increase represents significant savings at a time when outgoings are being heavily scrutinised. Microsoft products are at the heart of our customer businesses and play a vital role in enabling modern ways of working. We therefore see it as crucial that this potential saving is realised.
Value of the CSP Changes
Microsoft’s changes will include several new features, including the following offers and options for Microsoft 365 (subject to change):
- Home Use Program (HUP):Employees of organisations on the new licensing options after 1 March 2022 can receive a discount on the purchase of certain Microsoft 365 consumer offers as an employee benefit that they can use on their personal devices.
- Payment Flexibility: Unlike Enterprise Agreements (EA), which are paid one year in advance, CSP partners can offer a monthly payment option on annual or three-year subscriptions. This will enable organisations to manage cash flow and have predictable monthly spend.
NB – Promotions for this change are currently available.
How CAE Can Help
CAE’s experts are ready to help discuss how to optimise your organisation’s licensing and save money. Comparing licensing options and knowing which will be best for your organisation can be confusing.
As a Microsoft Gold Partner with 30 years of experience in delivering effective technology and support to customers, we want to help you maximise your value gained from investment in Microsoft technology, while minimising your costs.
We can discuss strategy, leverage promotions, and offer monthly billing for annual subscriptions to help your organisation save money and reduce headaches.