What is Microsoft’s New Commerce Experience (NCE)?

In January 2022, Microsoft launched the New Commerce Experience (NCE). This rollout impacted how MSPs and end-users purchase Microsoft 365 licenses.

In addition, Microsoft created the NCE to reduce complexity and offer savings for long-term commitments while also introducing new features to make CSP a competitive alternative to the traditional Enterprise Agreement (EA).

This post will cover the most important updates MSPs and IT providers you need to know about Microsoft NCE.

What this article will cover:

• What is Microsoft NCE?
• What’s “new” with the New Commerce Experience?
• What do these updates mean for users and MSPs?
• How incentives does NCE offer?
• What questions do IT providers have about MS New Commerce Experience?

NCE is an evolution of Microsoft’s Cloud Solution Provider (CSP) program. In an effort to grow the CSP program, MS intended to reduce licensing complexity and costs while providing enough flexibility to support a range of client purchasing needs.

Microsoft launched the New Commerce Experience for Microsoft Azure in 2019 and later expanded it to include Windows 365, Microsoft 365, Dynamics 365, and Power Platform commercial seat-based offers. And as of last year, NCE also includes nonprofit, education, and government licensing, making it the standard model for nearly all CSP transactions.

What is MS New Commerce Experience (NCE)?

Microsoft’s New Commerce Experience (NCE) introduces a simplified and standardized per-seat licensing model for Microsoft 365, Dynamics 365, Windows 365, and Power Platform subscriptions and provides resellers with a more straightforward way to manage subscriptions. As of 2024, NCE is the default model for all commercial and public sector license-based transactions, except for six-year or five-year public sector legacy offers.

Monthly Plans

For customers who need maximum flexibility, NCE supports monthly-term subscriptions with no long-term commitment. This enables MSPs and users will have the ability to purchase Microsoft 365 licenses monthly without an annual commitment, perfect for short-term or seasonal projects. This change was made to provide flexibility for IT providers that need to make regular changes to their M365 or O365 license plans and/or seat count. This month-to-month subscription carries a 20% price increase across all licenses and cannot be downgraded or canceled outside the 7-day window.

12-Month Plans

NCE users can also commit their licenses through a 12-month subscription. Unlike the former legacy CSP model, those customers on a 12-month subscription have the option to be billed on either a monthly or annual basis. As of April 1, 2025, monthly billing for annual commitments includes a 5% premium compared to paying annually upfront.

The 12-month subscription ensures pricing will be locked in for the entire term. This has obvious benefits for the MSP, which can avoid price increases during that time. This subscription will allow users to increase the seat count during the term – and decrease it only before the initial 7-day cancellation window ends.

36-Month Plans

A plan introduced to NCE in 2022 is a Multi-Year Pricing model allowing users to secure three-year pricing for long-term commitments. This plan allows users to be billed monthly, annually, or in total upfront. As of April 2025, monthly billing incurs a 5% surcharge over the standard rate.

This subscription allows users to increase, but there’s no grace period for decreases, a key difference from the 12-month plan.

NCE Launch Timeline

January 10, 2022 – New Commerce Experience (NCE) launched along with all introductory promotions offered by Microsoft. Users are encouraged to adopt the new platform quickly to leverage the available discounts.

March 1, 2022 – M365 price increases come into play, starting on this date, all new and renewed subscriptions must be purchased through NCE.

October 1, 2022 – Legacy programs fall out of support, and all licenses will now have to be purchased through NCE.

March 1, 2023 – Microsoft began transitioning public sector customers (nonprofit, education, and government) to NCE. This process included updates to seat-based licensing rules and eligibility requirements under the NCE model.

September 1, 2024 – The mandatory NCE migration deadline for nonprofit, education, and government licenses took effect. All CSP transactions, regardless of sector, were now required to follow the NCE model.

April 1, 2025 – Microsoft implemented a 5% premium surcharge on monthly billing for both 12-month and 36-month NCE term offers. This change impacts Microsoft 365 E3/E5, Power BI Pro, Teams Phone Standard, and other major SKUs.

July 1, 2025 – Microsoft expanded support for three-year term offers to more enterprise-level SKUs, including Microsoft 365 E3/E5 (with or without Teams), Teams Phone, and E5 Security/Compliance suites.

September 1, 2025 – Microsoft will enforce new Partner of Record (POR) authorization requirements. Updates to the Partner Licensing Assignment (PLA) API and UI will ensure that distributors (formerly indirect providers) can assign only authorized indirect resellers as the POR for new CSP subscriptions.

October 4, 2025 – Microsoft will begin enforcing new CSP compliance requirements, including updates to the Microsoft Partner Agreement and operational policies for resellers and indirect providers.

What does this mean for users and MSPs?

Change isn’t always the most welcome thing in the IT space. Instead, agreements are designed with specific profit margins, and most MSPs dread having to renegotiate price increases with their clients. Thankfully, the New Commerce Experience is meant to be a growth-oriented initiative thanks to improved revenue predictability, simplified licensing, a choice of term options, and added features that empower MSP resellers.

Look forward to:

Flexible Term Options

• Monthly term: No long-term commitment; carries a 20% premium over annual pricing.
• 12-month term: The term is locked for a year with upfront or monthly payment options.
• 36-month term: Now available for Microsoft 365, Dynamics 365, and more with upfront, annual, or monthly payment options.

(Not all products will have a monthly term option. 36-month options will only be available across a select range of Microsoft cloud products.)

Windows 365 subscriptions are slightly different. These licenses will only be available through the monthly term offer on NCE. Microsoft assures us that Windows 365 subscriptions will not be subject to the 20% premium for monthly terms under the current NCE model.

Nonprofit, Education, and Government licenses are not yet available on NCE. However, because they haven’t been carried over, these products will not be subject to the price increases in March.

Cancellation policies for new commercial seat-based subscription orders in CSP allow a seven-day modification window for full cancellations or seat reductions. After this period, only seat additions are allowed until renewal MSPs still benefit from this as it gives partners more time to make post-purchase corrections to orders. Under this model, any charges for canceled subscriptions or seat reductions will be prorated from the subscription’s creation until the changes take effect.

Add-ons are purchased as individual subscriptions separately from core product subscriptions. This means that end dates may not be the same between the base product and the add-on. Additionally, add-ons are still not supported by the API Upgrade tool for migration to NCE. Instead, Microsoft says that add-ons will need to be removed from legacy before migration and then re-purchased on NCE.

Upgrades on NCE are handled as a migration from one paid subscription to another paid subscription. Users will not be allowed to transfer from a higher-paid SKU to a lower-paid SKU. However, MSPs can purchase an upgrade at any time and choose to either do a complete upgrade where all seats are upgraded or a partial upgrade where only selected seats are upgraded.

Promotions are available (see below), but those offered by Microsoft at this time carry a maximum of 2,400 seats per subscription. Any transaction, including more than 2,400 seats, will be submitted at non-promotion prices. Promotion eligibility is determined at the subscription level for each partner.

Trials of NCE are available with 25 licenses that are valid for 30 days and cannot be canceled. In addition, trial licenses are automatically converted to paid offers at the end of the trial period. While Microsoft now provides clearer Partner Center alerts and expiration tracking for trials, it still auto-converts after 30 days unless cancelled. This aligns with the two options available at the end of the trial period: automatic conversion of all 25 seats into a paid subscription or manual conversion where the MSP or user can choose to upgrade the licenses.

Change of channels policies have been changed since. Microsoft now allows mid-term transfers of seat-based NCE subscriptions between CSPs, unlike before, when it was only possible at the time of term renewal, within a three-day window.

This includes direct, indirect, and distributor relationships. Billing ownership (i.e., channel) can change anytime during the active subscription term with approval from both current and new partners. This supports scenarios like partner transitions, mergers, or distributor handoffs. Additionally, transfers don’t trigger a new 7-day modification period (for cancellations or seat changes), and funds are prorated between partners from the effective transfer date.

Are any incentives being offered for moving to NCE?

Microsoft continuously encourages partners to change over to the New Commerce Experience, so multiple limited-time promotion are still ongoing. Here are some of them:

• For three-year term

• 10% discount on new-to-offer Microsoft 365 E3/E5 (with or without Teams) three-year subscriptions. It’s available June 9 through December 31, 2025, for customers with 100–2,400 seats.
• A similar 10% discounted promo applies to the new E5 Security and E5 Compliance minisuite three-year SKUs from July 1 through December 31, 2025, for 100–1M seats.

• For annual-term Microsoft 365 E3/E5

• The ”Accelerate with Microsoft 365″ promotion serves new-to-offer customers. It offers a 15% discount on annual-term E3/E5 extended through September 30, 2025, for up to 2,400 seats.

• Microsoft 365 Copilot “Getting Started”

• The 15% Copilot CSP promotion remains active through September 30, 2025, for 10–2,400 seats, retaining the flexible addition option.

These promotions apply to all new commerce seat-based commercial offers for subscriptions of up to 2,400 seats. Windows 365 subscriptions are excluded from both promotions.

(Note that these promotions are accurate at the time of this writing and are subject to change. Discounts are calculated as (promotional price – list price)/ list price.)

Complete changeover to NCE by 2026

The Microsoft NCE program brings MSPs new opportunities to scale their licenses and better serve their clients. Hopefully, you’ve had time to take advantage of the promotional offers available during the rollout — but ultimately, all MSPs will need to plan a complete changeover to the New Commerce Experience by the end of the year. The NinjaOne team will continue to follow significant updates in the Microsoft partnership and post updates as they become available.