Microsoft is revolutionizing how companies manage charges for Azure cloud services and Microsoft 365 licenses. The shift from the traditional Cloud Solution Provider (CSP) model to the New Commerce Experience (NCE) emphasizes long-term contracts and introduces several new challenges. At Exivity, we’re here to help you navigate this transition smoothly and ensure your business is well-prepared.
Understanding the Shift: Azure and Microsoft 365 Billing
While Microsoft 365 products are billed based on the number of licenses, Azure services operate on a pay-as-you-go model. However, with the introduction of Azure Reservations, businesses can save by committing to one-year or three-year plans for specific resources. This move is part of Microsoft's broader strategy to encourage long-term commitments and simplify billing.
Key Changes in the New Commerce Experience
The NCE brings several significant updates to Azure and Microsoft 365 billing structures:
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- 1-month term: A month-to-month contract comes with a 20% premium.
- 1-year term: Choose between upfront or monthly payments.
- 3-year term: Offers flexibility with upfront, annual, or monthly payments.
- Partner Earned Credit (PEC) Model: The standard discount for CSP partners is now a Partner Earned Credit, incentivizing partners to provide more value-added services.
- Unified Catalog: The Azure NCE integrates Microsoft and third-party apps into a single catalog, simplifying service management. This unified approach includes everything from Azure subscriptions to specialized software provided by partners.
- Bundled Billing: Unlike the CSP model, which offered separate invoicing for marketplace items, the NCE provides bundled billing for a streamlined process.
- Subscription Flexibility: License subscriptions can be paid in advance, with a strict 7-day cancellation policy. Monthly subscriptions allow for user/seat reductions monthly or at renewal, though mid-term adjustments are more restrictive compared to the CSP model.
Key Dates to Remember
- March 10, 2022: NCE became the exclusive channel for new business.
- July 1, 2022: All renewal orders for existing customers must be processed through the NCE.
Challenges and How Exivity Helps You Overcome Them
As these changes roll out globally, Microsoft resellers will encounter several challenges with the Azure NCE. Here’s how Exivity can help:
- Handling Massive Reconciliation Files: The NCE generates extensive daily-rated reconciliation files, which can overwhelm financial teams. Exivity merges daily-rated usage and one-time purchase reconciliation files, retaining detailed granularity while simplifying file management.
- Month-to-Day Data Transformation: Exivity streamlines monthly reporting by consolidating daily usage data, eliminating the need to manually filter raw data from NCE’s daily-rated files.
- Multi-Tier Support: For Tier 2 partners hosted by Multi-Tier partners, Exivity provides financial feature sets that Microsoft doesn’t offer, ensuring seamless financial operations.
💡Did you know you need a billing automation platform to become a Tier 1 Azure reseller? We can help you meet that requirement.
- PEC Insight: PEC affects the Cost of Goods Sold (COGS), not the charge price. If PEC requirements aren’t met, it can result in zero net profit. Exivity offers advanced visibility into PEC, helping you maintain profitability.
- Custom Pricing Uplifts: Exivity’s powerful rating engine allows you to apply category-based discounts and uplifts, giving you flexibility beyond Microsoft’s list prices.
- Data Layout Transformation and Coordination: Exivity ensures your data aligns with what’s shown in the Azure Portal, breaking down Azure Plan subscriptions into individual entitlements for clarity.
- ERP Integration: We tailor outputs to fit different ERP systems, contrasting with NCE’s standardized but less flexible format, reducing manual labor and enhancing integration success.
Partner with Exivity for a Smooth Transition
Exivity is a leading platform for advanced consumption reporting, rate card management, and billing automation for public and private clouds. Our dedicated team of experts is ready to help you transition from the CSP model to the New Commerce Experience, ensuring your business continues to thrive.
Ready to get started? Contact us today to learn how Exivity can streamline your billing processes and maximize your profitability in the New Commerce Experience.