Navigating the world of Microsoft Licencing

United Kingdom, Nov 17, 2022

By Stewart Kennedy

It's always been a bit of a minefield navigating the Microsoft licencing world.  With various different agreement types, licencing use rights and a multitude of options to choose from. Everything from an Enterprise Agreement (EA), Microsoft Products and Services Agreement (MPSA), Direct and Cloud Solution Provider (CSP) and more recently Microsoft Customer Agreement (MCA). Now that I have the acronyms out of the way. I’m hoping to share some insights on what is available and what might be the option to consider for your organisation based on some recent announcements by Microsoft. 

Microsoft’s EA commits customers with more than 500 users to a three-year volume licence agreement term. It provides a fixed cost and discount with optional extras such as software assurance which allows you to bring your own server and SQL license to the cloud known as Hybrid benefit. Hybrid benefits can make a huge dent to the cost of running your workload in the cloud. You basically only pay for the under lying compute. When it comes to moving to hosted exchange, SharePoint, Teams and all the wonderful tools Microsoft offers as part of the Office 365 and Microsoft 365 plans. The EA does not offer the flexibility and agility to meet a hybrid cloud landscape. EA renewal can often be a long and tedious process, ensuring your mapping the correct plans to the user requirements While juggling the costs to ensure you stay within budget. 

To meet this changing landscape Microsoft introduced the Microsoft Products and Services Agreement (MPSA), followed by the Cloud Solution Provider (CSP) program. These offered more flexibility and agility to meet the hybrid challenge of running software on-prem and in the cloud. CSPs are less of a reseller and more of a cloud partner that provide support, professional and managed services wrapped around your license purchase. 

Over the past year Microsoft announced a number of commerce changes that warrants a review of your current purchasing channel and makes the CSP channel very attractive. 

In January Microsoft introduced the New Commerce Experience (NCE) which offers discounted pricing through CSPs depending on how you purchase and manage your licenses. 


Then in March Microsoft increased pricing to a few of its core Office 365 and Microsoft 365 plans. To be fair there has not been a price increase for quite some time and Microsoft have significantly improved the features and added new products to these services. So, the price increase (for the growing value and ROI) is long overdue. The increase only affected six of the core Office 365 and Microsoft 365 plans, including: 

  • Microsoft Business Basic increased by 15% 
  • Microsoft 365 Business Premium increased by 15% 
  • Office 365 E1, E3 and E5 increased by 15% 
  • Microsoft 365 E3 increased by 15% 


Existing customers are not impacted until their next contract renewal date or on new purchases after 1st March 2022, 

Then at the end of June Microsoft introduced new benefits to NCE under CSP that presented Enterprise customers with less than 2400 seats a feasible option to consider transacting under this program. These changes mean clients may not see the volume pricing benefits when entering or renewing and EA.  

The NCE is designed to ensure customers have an optimal experience. Once it’s fully launched, it will enable faster, simpler transactions. Through the use of a self-service portal together with your CSP partner you can identify and use a blend of long-term and short-term commitments to suit your specific licensing needs.  You can purchase, provision add or remove addons in real-time.


Benefits of NCE 

  • Consolidate your purchasing and management of Microsoft license together with the enhanced support or managed services provided by your CSP 
  • Integrated license tools and self-service license procurement 
  • Flexibility to dial up or down licenses to meet business or seasonal demand. 
  • Monthly and or Annual commitment and scalable discounts 
  • Hybrid Use Benefit now included (no longer just a Software Assurance/EA benefit) 
  • Price protection for up to 36 months now offered 
  • New communication credit offers (no longer just an EA benefit) 
  • Multi-Geo capabilities included (no longer just an EA benefit) 
  • Scheduling of subscription changes/upgrades to new SKU’s (which removes the need for admins to make changes on anniversary dates) 
  • Auto-renew toggle (similar to Microsoft Direct) 


So, whatever agreement you are purchasing under it makes sense to run a Microsoft 365 Efficiency Health Check. This will analyse all your current licensing and identify where you can optimise and or re harvest licenses to improve your efficiencies. You can find more information on our M365 Efficiency Health Check here.  

In today's Hybrid world it’s critical to have a trusted Microsoft partner who can help your organization navigate these changes. Additionally, since you cannot change partners during an NCE subscription term, it is equally as important to find a partner you trust to manage your Microsoft licensing subscriptions throughout the full licensing term.




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