Microsoft announced that the prices of all Microsoft 365 NCE licences worldwide will be increased from 1 April 2023.

This price increase is a result of the current economic situation, with tariffs varying significantly worldwide and the US dollar becoming increasingly expensive.

By aligning rates with the dollar exchange rate, Microsoft aims to provide more transparency and ensure that cloud services can continue to be developed.

Changes to the licensing model

Last year, Microsoft already made changes to the licensing model, with the main aim of continuing to develop new features. In addition, Microsoft also informed then that as many as 1,400 new features have been added within the licences in recent years.

Rates in line with dollar exchange rate

To provide more transparency and continue developing cloud services, Microsoft is bringing the rates of cloud services in line with dollar exchange rate. This means that the conversion rate will be determined twice a year based on the FX rate.

The first time this happens will be on 1 April 2023 are. After this date, the price of all Microsoft 365 services will be worldwide on average 11% rise. So this also applies to all Microsoft licences.

Important to know for you as a VanRoey.be customer

• Azure, on-premise, consumer, hardware & OEM experience no price impact.
• The price hike applies to commercial, gov and academic.
• On renewal of annual subscriptions before 1 April 2023, the rates remain the same.
• For subscriptions running beyond 1 April 2023, the prices set out in the contract will apply for the remaining term.
• Microsoft will revisit pricing every six months from now on.

In fact, Microsoft changed its licensing structure back in February 2022. This under the name 'Microsoft New Commerce Experience (NCE)' and as a successor to the Cloud Solution Provider (CSP) programme. This new licensing model covers Office 365, Microsoft 365, Dynamics 365, Windows 365, as well as Power Platform licences.

As this new transaction model nears its first anniversary, for many organisations it is THE time to critically scrutinise their Microsoft licences. 

What changes?

For the first time in years, Microsoft is going to hike prices on some key basic subscriptions (+- 11%).

In addition, the way licences are traded in particular has changed:

Teams Rooms Standard becomes Teams Rooms Basic

Meeting room licences have also recently changed. Where previously we spoke of Microsoft Teams Rooms Standard and Teams Rooms Premium, we now get Microsoft Teams Rooms Basic and Microsoft Teams Rooms Pro.

In the overview below, we explain the difference:

Time for action!

As you can see in the equation above, 'Interim downgrades' are no longer allowed in any formula. Since most organisations opt for the 12-month licence model, now is the time - even before the expiry date - to downgrade and/or downgrade your licences where necessary.

Because from 7 days after the renewal date your licences are again fixed for 1 year! From then on, you can only:

• Upgrading your subscription
• Increase licences
• Changing billing frequency
• Apply co-term date

Applying for the necessary changes on time is therefore the message! Allow a few days for processing before the effective expiry date!

Below, Ines shares some quick-wins to look at as an organisation:

Tip 1: Office 365 E3 > Microsoft 365 Business Premium

An example of a 'downgrade' is the switch from Office 365 E3 to Microsoft 365 Business Premium:

• What do you already have? Office, Exchange Online, Teams, SharePoint Online and OneDrive
• What do you submit? Oa. mailbox from 100GB to 50GB + OneDrive 1TB instead of unlimited
• What do you get extra? Security features such as: Microsoft Defender for Office 365, Azure Active Directory, Intune, Defender for Business, ...

Per user, this can save you around €70 on an annual basis! This is provided you don't need more than 300 licences.

Tip 2: Microsoft 365 E3 > Microsoft 365 Business Premium

An example of a 'downgrade' is the switch from Microsoft 365 E3 to Microsoft 365 Business Premium:

• What do you already have? Office, Exchange Online, Teams, SharePoint Online and OneDrive
• What do you submit? Windows Pro instead of Enterprise, no Windows Server CAL rights, less storage mailbox and OneDrive + some Microsoft security features less compared to Microsoft 365 E3.

Per user, this can save you around €200 on an annual basis! This provided you do not need more than 300 licences and no essential already configured security features are missing.

Tip 3: Microsoft 365 Business Standard > Microsoft 365 Business Premium

An example of a recommended 'upgrade' is the switch from Microsoft 365 Business Standard to Business Premium.

• What do you already have? Office (desktop), Exchange Online, Teams, SharePoint Online and OneDrive
• What do you get extra? Security features such as: Microsoft Defender for Office 365, Azure Active Directory, Intune, Defender for Business, ...

This for just a few euros extra per month.