What Is Microsoft NCE?

Microsoft NCE

Microsoft NCE means Microsoft New Commerce Experience – this is the underlying commercial system used within Microsoft to transact all Microsoft Cloud and Subscription services. The NCE platform was first released for Azure, and in 2022 has been formally released for all user-based licenses – such as Microsoft 365 and Dynamics products.

NCE Subscriptions

An NCE Subscription records the purchase of a Microsoft Service by a particular end customer or tenant. Each subscription has an associated quantity, a related product/SKU, Payment terms and a commitment duration. Subscriptions can have a monthly, annual or tri-annual term. The terms available depend on the product selected)

Microsoft CSP

Microsoft CSP means Microsoft Cloud Solution Provider. Microsoft CSPs are Microsoft Partners who are entitled to resell Microsoft cloud services. CSPs use the Microsoft New Commerce Experience to transact the sale of Microsoft Cloud Services.
There are three types of Microsoft Partner involved in the Cloud Solution Provider programme:

Indirect CSP Providers

Indirect CSP providers resell Microsoft NCE subscriptions through many Indirect CSP Resellers. Indirect CSP Providers are often referred to as Distributors and usually resell software, services and hardware from many other providers.
There are not many Indirect CSP Providers globally, typically there are 1-5 in each market. Some CSP Providers operate globally or across a region.

Each indirect provider is billed by Microsoft monthly for all of the subscriptions being consumed by all of the end-customers for each of their Indirect CSP Resellers.

Learn More: About Microsoft 365 Management with Atria

Indirect CSP Reseller

Indirect CSP Resellers are typically IT Providers or MSPs that provide IT support services to end-customers. In most cases they will have many smaller businesses as customers (<50 users each) and will usually be a smaller MSP (<30 staff).

The Indirect CSP Reseller transacts Microsoft subscriptions through their chosen Indirect CSP Provider on behalf of their customers. Indirect CSP Resellers are sometimes referred to as Tier2 resellers.

Every time they need a subscription or a change to the subscription, this must be handled through their indirect Reseller.

Indirect CSP Resellers use Microsoft Partner Center to manage their tenants and licenses, but they are unable to create new Microsoft Tenants or Microsoft NCE Subscriptions. The Indirect CSP Provider must create the tenant and the subscription for them, then grant the Indirect CSP Reseller access.

The Indirect Provider bills each Indirect CSP Reseller monthly for all of the subscriptions consumed by the Indirect CSP Resellers customers.

Direct CSP Reseller

Larger IT Service Providers who transact more significant volumes of business are able to join the CSP Programme as a Direct CSP Reseller. They are sometimes called Tier 1 Providers.

Like Indirect CSP Providers, the Direct CSP Reseller is able to create new Microsoft Azure AD tenants and also create new NCE Subscriptions. The Direct CSP Reseller is billed by Microsoft on a monthly basis for all subscriptions.

CSPs options

Each Microsoft Partner considering joining the CSP programme may be able to choose between becoming a direct reseller, or can sell through an indirect provider.

There are more requirements for joining the CSP programme as a Direct CSP Partner

This includes:

• A commitment to transact a minimum $value of subscriptions through CSP
• Direct CSP Resellers MUST purchase a support plan from Microsoft. This can be a Premier support agreement or a CSP Support agreement.
• 24×7 Support options must be provided to end-customers if you are a direct CSP reseller
• Must develop or acquire automation technologies to support provisioning, customer management and billing processes.
• Microsoft must accept your application to become a direct reseller

Some of the Differences between the two CSP Reseller types

Why become a Direct CSP Reseller?

For many Managed Service Providers using an Indirect Reseller is likely to be more cost effective. If you are reselling more than $300,000 per year of Microsoft services, then becoming a direct provider could offer you greater margins and more flexibility for scaling your operations.

The key difference is that direct CSPs have access to the full PartnerCenter API. This can be used for Provisioning new tenants and creating and updating subscriptions. When combined with an IT provisioning system such as Atria, the processes associated with Microsoft licensing can be streamlined into user provisioning processes. In addition systems like Atria can enable channel partners and end-customers to provision their own licenses without needing to contact their CSP reseller.

Azure NCE

Is Azure also available through New Commerce Experience?

The Microsoft New Commerce Experience (NCE) for Azure was released first with support for Azure consumption based services (versus user license based services such as M365). A key feature is a single offer catalog for Azure Plan, a common standardised price list in USD, and billing which is aligned with calendar months (Previously this was different for individual CSP partners based on the date they joined the program). As part of this change, improved cost management features have been added to Azure.

Microsoft Price Increase

The New Commerce Experience launched in 2022 for user based licenses – i.e. for finished end-user Microsoft products vs Azure services. For example M365 licensing, Dynamics and Power Apps.
A price increase combined with a change in pricing model was introduced with NCE, this has made the introduction of NCE controversial with Microsoft partners.

The price increase was as follows.

1. For some (widely used) M365 products, prices were increased by 20% across the board.
2. For NCE Subscriptions, an additional uplift of 20% was applied for subscriptions with a monthly term commitment.
3. An annual commitment subscription did not receive an increase.

So, for similar terms as were available in pre-NCE subscriptions, the price increase could be two fold. Prior to NCE Microsoft CSP Partners enjoyed flexibility with subscriptions and were able to increase/decrease quantities at any time and only pay from the time the change was made.

NCE Cooling off Period

Once a subscription has been created, it is possible to cancel the subscription within the first 7 days. After this time, the subscription is fully committed and the CSP Reseller must pay the subscription for the full term, even if the end-customer defaults on payment, the CSP reseller is held accountable for payment of all associated invoices.

A facility is available to suspend the subscription, while suspended the CSP is still required to pay for the service. It gives a mechanism which can be used to encourage the end-customer to pay for the services being consumed.

Does NCE apply to Government, Education and Not for Profit Licenses?

At present, NCE only applies to Commercial licenses.  The legacy commerce system still works for Education, Not for Profit and Government segments.  We expect (but do not know) that Education, Not for Profit and Government licensing will also transition to NCE at some point in the future.

About Atria for NCE

Atria provides automation features that can be used by both indirect and direct providers to reduce the costs associated with managing hybrid and cloud customers. Learn more

Key features include:

• Subscription management (for direct CSP resellers)
• User provisioning and license assignment
• Delegated Administration (enable customers to perform their own changes)
• Automated billing integration (via Connectwise, Kaseya or Autotask)
• Simplified API for billing and provisioning

Related article: New Commerce Experience Portal for Direct CSPs