Microsoft Delays End of Auto-Renewals of Legacy CSP Subscriptions

Office 365

Microsoft has indefinitely delayed its plans to block auto-renewals of monthly subscriptions that are currently sold by Cloud Solution Providers (CSPs). CSPs are partners that can directly provision, manage, and support customer subscriptions for Microsoft products. The software giant had planned to begin blocking automatic monthly renewals for older accounts on July 11. It planned to replace monthly renewals with the New Commerce Experience (NCE), which substitutes monthly subscriptions with annual plans.

Microsoft first announced the New Commerce Experience (NCE) back in 2019 for Microsoft Azure. The new subscription model intends to eliminate the monthly payment option available for Microsoft’s services and pushes customers toward annual payment plans. This change will impact various services, including Microsoft 365, Dynamics 365, Windows 365, and the Power Platform (Power Automate, Power BI, Power Apps).

Unlike the previous CSP model, the New Commerce Experience requires companies to purchase licenses for the entire year. This means that customers will no longer be able to return these licenses within that time frame. Microsoft is still offering a monthly payment plan for organizations that refuse to switch to NCE. However, these customers will need to pay a 20 percent premium price in that case.

An update that follows pushback from customers

Microsoft blocked companies from ordering the older CSP subscriptions on March 10, 2022. It was a part of an effort to encourage all CSP partners to bring their customers onto the New Commerce Experience subscription model. However, some CSPs created a petition urging the company to keep the old monthly plans and revert the 20 percent price hike.

Fortunately, Microsoft has apparently listened to these complaints from its CSP partners and customers. The company has indefinitely extended the previously announced July 11 deadline. This means that the auto-renewals of legacy CSP subscriptions will continue to happen until further notice.

“Previously, we communicated that legacy commercial seat-based subscriptions would no longer be auto-renewed on the legacy platform starting July 11. Though our goal is still for partners to migrate legacy subscriptions to new commerce before end of term, we have made a business decision to continue supporting the legacy auto-renewal functionality beyond July 11,” the company explained.

Interestingly, Microsoft didn’t mention the reason behind this decision, and it isn’t providing a new date to CSPs. However, Microsoft’s CFO Amy Hood revealed during its Q3 earnings call that “licensing revenue across both the Office and Server businesses was more negatively impacted than expected due to the transition from our open licensing program to our cloud solution provider program.”

Microsoft noted that the cutoff date for the legacy CSP subscriptions will be January 1, 2023. The company recommends its partners to complete migrations to NCE as soon as possible via Partner Center. If you’re interested, we invite you to check out this support page to learn more about the migration process.