Microsoft Rolls Out NCE Discount, But Controversy Remains

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Cloud News

Wade Tyler Millward

“We would just like Microsoft to give us portability for customers,” Lane Shelton, director of licensing for Core BTS, told CRN in an interview. “And we’re more than happy to risk losing our customers to our competitors to gain that advantage.”





Microsoft has launched a 16.7% discount valid until June 30 for new Microsoft 365 customers and existing customers who want to upgrade to a higher-end product – helping some partners still busy rolling out of the “new commerce experience” platform, while still leaving in place some issues partners have with NCEs.

The discount — aimed at small and medium-sized customers and called “Microsoft 365 SMB and New Customer Upsell Promotion for Cloud Solution Provider (CSP) Customers” — is for customers who purchase “a low-risk monthly commitment” for a variety of Microsoft 365 plans, Microsoft Teams Essentials and Microsoft Defender for Business, according to a announcement by the Redmond, Washington-based tech giant.

Valid M365 plans are Business Basic, Business Standard, Business Premium, and Apps for Business. The discount does not work on “legacy” subscriptions – those made from NCE.

[RELATED: Microsoft Partners At A Crossroads: Radical Changes Rattling The Channel]

Did Microsoft change NCE?

CRN has contacted Microsoft for comment. The company announced the promotion on September 1.

In a document explaining the 16.7% discount, Microsoft said it created the discount “to allow partners to explain how Microsoft 365 can help potential and existing customers ‘do more with less’ by consolidating vendors or improving their security and productivity posture with a higher premium product.”

For new M365 customers, “This promotion creates immediate savings in both product value and price for new customers while allowing customers and partners to retain the flexibility of a monthly commitment,” according to Microsoft.

For customers interested in upgrading to a higher subscription type, “This promotion is a fantastic opportunity for partners to explore with their existing customers how to upgrade to products such as Microsoft 365 Business Premium – or expand their investment. Microsoft 365 with standalone products like Microsoft Defender for Business – can save existing customers money through vendor consolidation while delivering needed productivity and security value,” according to Microsoft.

Lane Shelton, director of licensing for Core BTS — an Indianapolis-based Microsoft partner and member of CRN’s 2022 Solution Provider 500 — told CRN in an interview that the promotion helps his business because it upgrades many customers to the Business Premium subscription.

Early in the NCE rollout, Core BTS used conversations with customers to try to sell them on Microsoft products.

“We’ve had a lot of customers transitioning, which I don’t think they would have done if NCE hadn’t forced them to talk to us,” Shelton said. “Especially in the beginning, when they had discounts on annual SKUs (stock keeping units), we were like, ‘Hey, you need to talk to us in the next 30 days, because maybe we can save you some money. ‘silver.

He continued, “Every client was talking to us. And then they ended up modernizing. And so that was great because they got some extra discounts. They need to upgrade. We had more income. The customer was happy. So there were a lot of those things. We would like that to continue. »

But Microsoft still hasn’t solved one of the main problems with NCE – when customers buy an annual commitment, customers can’t switch MSPs until the end of the contract, which can lead partners to take on a customer and forfeit revenue until the end of the contract with the original MSP.

“We would just like Microsoft to give us portability for customers,” Shelton said. “And we’re more than happy to risk losing our customers to our competitors to gain that advantage. Because we just think that’s the biggest gap they have right now. …(removing the 20% monthly bonus) would mean we could still do monthly SKUs with the vast majority of our customers.

The 20% bonus on monthly commitments also punishes seasonal business customers who like to change license counts from month to month, Microsoft partners told CRN.

And if customers purchase annual commitments for M365 packages, partners may be required to pay for the remainder of the contract if the customer goes out of business or needs fewer licenses.

In July, Microsoft rolled back a policy that encouraged partners to move legacy subscriptions under its Cloud Solution Provider program to NCE by January, providing an indefinite deadline for when partners must move legacy subscriptions to NCE.

However, partners selling new subscriptions for M365 packages must sell them through NCE – and therefore with the 20% bonus for monthly commitments – unless the customer upgrades to a higher subscription type or is new to M365. Then they benefit from the 16.7% reduction.

More about discount

The discount ends for customers on the first monthly anniversary date after June 30, according to Microsoft. The discount ends automatically.

Or, “[p]Partners can work with their customers to upgrade to a standard NCE Annual Engagement from the monthly engagement promotional offer,” according to Microsoft. “This can be done at any time during the promotional period. Cancellations and automatic renewal adjustment can also be scheduled in advance. »

Microsoft continued, “Partners should decide with their customers whether an annual or monthly commitment makes the most sense based on customer needs and credit risk.”

Microsoft encourages partners to conduct upsell conversations with the tech giant’s security offerings, according to the document explaining the discount. Partners can also use the uncertain economy as a talking point, as “the pressures of the changing global economy compel organizations to reduce costs and optimize operations as they continue to shift to a hybrid working world. “.

Partner Center features can help partners determine if customers are eligible for the promotion. Customers with annual commitments cannot change existing subscriptions to monthly subscriptions. Customers can cancel monthly subscriptions for the first 168 hours after renewal for a prorated refund, according to Microsoft.

NCE isn’t the only major change Microsoft announced for partners in 2022. In August, the company unveiled changes to virtual base licenses and the outsourcing of certain licenses to Google Cloud and Amazon data centers. Web Services.

Next month, Microsoft will officially launch its Partner Capability Scores and new Partner Program designations that will replace the long-standing gold and silver system.


    More about Wade Tyler Millward

Wade Tyler Millward

Wade Tyler Millward is an associate editor covering cloud computing and channel partner programs from Microsoft, IBM, Red Hat, Oracle, Salesforce, Citrix and other cloud providers. He can be contacted at [email protected]


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