Microsoft’s New Commerce Experience (NCE) Updates for CSP: April 2025
What you need to know…
As a Microsoft Solutions Partner and Tier-1 (direct) Cloud Solution Provider (CSP), Oakwood is dedicated to ensuring our customers stay ahead in the ever-evolving Microsoft ecosystem. With technology continuously advancing and Microsoft refining its cloud-based offerings, businesses must remain informed to make strategic licensing decisions that align with their operational and financial objectives.
Recently, Microsoft announced significant updates to the New Commerce Experience (NCE), set to take effect in April 2025. These updates will directly impact licensing costs and subscription commitments, making it crucial for organizations to assess their current agreements and explore optimization opportunities.
In this guide, we break down the key changes, their implications, and how businesses can proactively adjust their licensing strategies to minimize cost increases and maximize value.
A Little Background…What is the New Commerce Experience (NCE)?
The New Commerce Experience (NCE) is Microsoft’s continually advancing licensing model aimed at streamlining subscription management, reducing operational complexity, and providing businesses with flexible purchasing options across Microsoft 365 and other software services. This model offers organizations greater predictability in pricing, enhanced automation for license management, and a clearer structure for commitments and renewals.
Since its launch, Microsoft has continuously refined the NCE framework to align with customer feedback and market conditions, adjusting terms and pricing structures to balance flexibility with cost efficiency. While the model simplifies licensing, it also introduces structured commitment terms that businesses must navigate carefully to optimize costs and maintain agility.
With the upcoming changes, businesses must be proactive in understanding how pricing adjustments and subscription commitments may affect their operational budgets. Organizations currently utilizing monthly, annual, or triannual agreements should evaluate their licensing strategies now to mitigate unnecessary costs and ensure long-term alignment with their IT and financial planning goals.
Key Changes Coming in April 2025
Microsoft has announced the following updates to the NCE structure
5% Price Increase for Monthly Billing on Annual Licenses
- Beginning April 1, 2025, all new and renewing annual licenses with monthly billing will see a 5% price increase.
- Licenses that are mid-term will not be affected until their renewal date.
- This does not affect Azure consumption; it is specific to Microsoft license subscriptions.
- Customers can avoid the increase by choosing annual subscriptions with upfront billing.
Power BI Pro Pricing Increase
- The price of Power BI Pro will increase from $10 per user/month to $14 per user/month.
- This applies to new subscriptions and renewals starting April 1, 2025.
- Like the licensing increase, mid-term subscriptions remain at their original pricing until renewal.
Monthly, Annual, and Triannual
Understanding Commitment Terms
Microsoft offers three main commitment terms under NCE, each with its own implications for pricing and flexibility.
Monthly
- Customers who need flexibility in seat adjustments often opt for monthly terms.
- Monthly plans typically have a higher per-user cost compared to longer-term commitments.
- With the April 2025 update, monthly billing for annual commitments will now include a 5% price increase at renewal.
Annual
- Customers can commit to an annual subscription and pay upfront or pay monthly.
- Upfront annual payments will not see the 5% increase, making this a cost-saving option.
- Customers on annual commitments cannot decrease seats until their renewal period.
Triannual*
- A newer 3-year commitment option aims to provide price protection for an extended period.
- Customers must pay upfront annually or monthly but lock in rates for the full three years.
- This is ideal for organizations with stable user counts that want to avoid annual price fluctuations.
*Note: The triannual commitment is primarily available for select Dynamics 365 products. It is not universally available across all Microsoft SKUs. Customers interested in this option should check with Oakwood’s Microsoft Licensing team to determine eligibility.
Other Important Subscription Changes
Beyond pricing, customers should be aware of policy updates regarding cancellations, upgrades, and channel changes:
Cancellations
- Customers cannot cancel an NCE subscription mid-term.
- There is a 7-day window after the start of a subscription for partial refunds.
Upgrades
- Full upgrades (moving from one plan to a higher-tier plan) can be done at any time.
- Partial upgrades (increasing a portion of seats to a higher-tier plan) are subject to Microsoft’s licensing rules.
Promotions & Trials
- Microsoft occasionally offers promotional discounts or trial periods.
- Trial licenses do not guarantee pricing protection once converted to paid subscriptions.
Change of Channel
- As of April 1, 2024, Microsoft introduced the Partner-to-Partner Transfer Tool, allowing partners to transfer NCE subscriptions between indirect providers (IP) and direct-bill (DB) partners, like Oakwood.
- This new tool provides added flexibility for businesses looking to adjust their CSP relationships while maintaining their existing NCE subscriptions.
- This transfer process does not open a new seven-day modification window and must be approved by both the current and new IP/DB partners.
How This Affects Your Business
For Oakwood customers, these changes mean that renewal time is the key decision point for adjusting licensing strategies. Our recommendation is to:
- Assess your current licensing commitments before renewal.
- Consider moving to an annual upfront payment to avoid the 5% increase.
- Plan for the Power BI Pro price adjustment in your budget.
- Reach out to Oakwood for a licensing strategy review to ensure cost efficiency and compliance.
Final Thoughts: Prepare Now for April 2025
The April 2025 NCE updates are an opportunity to reassess licensing strategies and optimize costs. Oakwood is here to help our clients navigate these changes and develop a plan that minimizes impact while ensuring licensing compliance.
If you have questions about your Microsoft licensing strategy or want to explore cost-saving options, reach out to Oakwood today. We’re here to help you stay ahead of the changes and make informed decisions.
