Microsoft NCE Changes for the Public Sector

As of August 1, 2024, Microsoft stopped the sale of all Legacy Public Sector products for new subscriptions. Microsoft defines the public sector as nonprofits, government, and education customers.

After that, all new subscriptions need to be transacted through the new Microsoft New Commerce Experience (known as NCE) platform.

What is NCE? What Changes Should I Be Aware Of?

The new commerce experience (NCE) “per seat” model for Microsoft 365, Dynamics 365, Windows 365, and Power Platform subscriptions is the latest in the evolution of the CSP program.

Key changes to be aware of in NCE compared to legacy CSP include:

• Commitment Periods: NCE enforces annual and monthly commitment periods, with monthly subscriptions carrying a 20% price premium.
• Modification Window: While customers can add seats at any time, they have seven calendar days post-activation to change the subscription term, decrease quantity, or cancel. After this period, the subscription is locked in for the agreed term.
• License Qualification: A single customer tenant can qualify for both education and nonprofit licenses under NCE.

Timeline Overview

• August 1, 2024: New subscription purchases must be on NCE.
• No earlier than September 1, 2024: Microsoft-led migration for the public sector begins.
• March 31, 2025: End of legacy incentives.

What Happens Next?

Starting on September 1, 2024, there will be an automatic migration process for all Public Sector Legacy subscriptions to the NCE platform on the subscription’s Legacy renewal date.

• Subscriptions will be transitioned to an annual commitment and inherit the existing Legacy subscription billing term of annual or monthly.
• Subscriptions will be transitioned to the NCE version of the product and keep the same quantity.
• Subscriptions dependent on one another (base/add-ons) will all be migrated at the base subscription’s renewal date.
• Subscriptions will have a seven-day (167-hour) window to make any changes.
• Subscriptions will be provided a new subscription ID and must be synced to PSA integrations.
• Commercial subscriptions that are tied to a public sector subscription will not move to NCE until after the public sector migration is complete.

Sourcepass is Here to Help

Sourcepass will be handling all subscriptions / migrations for our clients and will be in touch regarding this. Some key considerations we will review with you include:

• Budget cycles: We understand that public sector clients rely heavily on pre-allocated annual funding and annual commitment through NCE is the most economical option. We will review changes to your licensing structure and payments so you can allocate the right costs to the upcoming operational budget.
• Fluctuating user number: In the public sector, the number of software subscription users fluctuates heavily throughout the year. Sourcepass recommends to allocate annual subscriptions to the core user base that is likely to remain constant throughout the year and keep the rest flexible with monthly subscriptions - the most economical approach.
• Security review: Cyber criminals often target public sector organizations to access their sensitive data, such as personal identifiable information (PII). With the transition to NCE, this is a great time to review and improve your security posture. By upgrading to modern SKUs, Sourcepass can help you secure your environment and consolidate your security costs.

If you’re still not sure if you’ll be affected or not, or are unsure what to do, please reach out to us for help.