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Microsoft Announces A New Licensing Model – Tech Tip For January 4, 2022


Happy New Year! As we start off our tech tips for 2022, we wanted to spend the month of January covering recently announced, important changes to Microsoft seat-based licensing for cloud products like Microsoft 365 and Office 365. Microsoft announced a new licensing model called New Commerce Experience (NCE) which is slated for rollout in mid-January. This week we will cover a summary of the changes and take a deeper look at the SKUs that are slated for a price increase.

NCE in Summary

While specifics of the NCE program may change, overall the NCE rollout includes the following:

  1. A price increase to many seat-based cloud licenses including some Office 365 and Microsoft 365 SKUs.
  2. Enforcement of licensing terms – 30-day (month to month), 12 month, and potentially 36-month agreements.
  3. A fee or price differential for 30 days (or month-to-month) licenses.
  4. An offer to maintain current pricing by signing a 12-month agreement by a certain date.
  5. This date is in flux but could be as early as March 2022.

Price Increase

Microsoft is increasing prices on certain seat-based SKUs between 8% and 20%. This change impacts commercial and public sector licensing. Non-profit licensing will not be impacted at this time.
It is important to note that if your organization moves to an annual (12-month) agreement prior to March 2022 (this date may change), you will be able to take advantage of the current (in place) lower pricing structure for the term of the agreement.

The details of the price increases are as follows:

  • Enterprise licenses with price increases
    • Office 365 E1 is increasing to $10 per user per month (PUPM) from $8 PUPM 
    • Office 365 E3 is increasing to $23 PUPM from $20 PUPM 
    • Office 365 E5 is increasing to $38 PUPM from $35 PUPM 
    • Microsoft 365 E3 is increasing to $36 PUPM from $32 PUPM 
  •  SMB/Business licenses with price changes
    • Microsoft 365 Business Basic is increasing to $6 PUPM from $5 PUPM 
    • Microsoft 365 Business Premium is increasing to $22 PUPM from $20 PUPM 
  • Licenses not impacted at this time
    • Licenses not listed above
    • Dynamics 365
    • Microsoft 365 E5
    • Microsoft 365 Business Standard, 
    • Frontline Worker 
    • Non-profit licensing

Next week we will take a look at the different agreement types offered by NCE. If you have any questions or want to get jump on preparing for the upcoming changes, please contact us.

Important Microsoft Announcements:

      • Microsoft will be rolling out price increases for seat based CSP licensing (Microsoft 365, Office 365) starting in January 2022. In addition, they will be introducing annual and potentially 3-year licensing agreements. The pricing changes will substantially increase the price for month to month CSP agreements. Please contact us at  gettechwise@techwisegroup.com to understand how you can minimize the impact of the upcoming price increases.
      • Microsoft will begin the rollout of Windows 11 through Windows Update as an update to Windows 10 machines starting on October 5, 2021. This update can be postponed. If you need assistance with controlling the rollout of Windows 11 to your organization, please contact TechWise Group or your IT department.
      • Starting November 1, 2021, the following versions of Outlook for Windows, as part of Office and Microsoft 365 Apps, will not be able to connect with Office 365 and Microsoft 365 services:

Office 2013

5.0.4970.9999 and older


Office 2016

6.0.4599.9999 and older


Microsoft 365 Apps for enterprise (formerly Office 365 ProPlus)

705 and older


Microsoft 365 Apps for business (formerly Office 365 Business)

705 and older


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