Microsoft New Commerce Expirience (NCE)

History

2022: Microsoft partners around the world refuse to switch to a new license sales scheme

At the end of April 2022, Microsoft admitted that partners were slowly moving to the Microsoft New Commerce Expirience (NCE) software license sales scheme. Sellers complain that this scheme makes software more expensive.

When Microsoft announced the NCE, the company said it had offered a simplified approach and greater flexibility in acquiring software licenses in an understandable form, directly improving the management of licensed assets and providing predictable costs. In this scheme, the sale of perpetual licenses was canceled in favor of a new commercial experience, which focuses on subscriptions to cloud products for a certain period and makes payment by month more expensive, reports The Register.

Microsoft partners around the world refuse to switch to a new license sale scheme, which makes software more expensive

However, the scheme has worried some members of the Microsoft partner community who fear it could make them dependent on some customer purchases.

Research firm Canalys valued the new scheme as more beneficial to Microsoft than to its partners or customers. Analysts also noted that the changes include significant price increases, and expressed the view that this caused significant anger from partners around the world.

These partners expressed their dissatisfaction with the fact that they did not use the new scheme - despite the fact that it became the standard product offered by Microsoft in early 2022.

"Our revenue from licensing local transactions across Office and Server was more negative than expected due to the transition from open licensing to cloud delivery. It just takes us a little bit longer to connect the whole community to make sure they can do operations within the program the way they want. So I think it will take a longer period than we assumed. We will continue to see this impact in Q4, "Microsoft CFO Amy Hood said.

Microsoft CEO Satya Nadella also noted that this change is very good for both partners and customers and Microsoft in the long term. So there is still a lot of work to do, but we want to do it because it benefits everyone.

By the end of April 2022, some partners clearly see no benefit, and that hurts Microsoft's bottom line - enough to get a mention during quarterly results. But at the same time, this was only a mention along with other rapid growth rates, and the extent of the impact was not quantified.^[1]

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