Microsoft To Allow Partner-To-Partner NCE Subscription Transfers This Quarter

“This change was made based on partner feedback and will provide greater flexibility, creating a smoother experience for both partners and customers,” according to Microsoft documents.

This quarter, Microsoft plans to allow solution providers in its Cloud Solution Provider program to transfer end customer new commerce experience subscriptions from one partner to another midterm, eliminating one of the biggest issues that has continued to affect some solution providers since the rollout of the controversial NCE program.

The change applies to direct bill and indirect providers, according to documents shared with CRN and confirmed by a Microsoft spokesperson. The NCE cancellation policy of seven days still applies after the transfer and the changes only apply to CSP license and seat-based subscriptions.

“This change was made based on partner feedback and will provide greater flexibility, creating a smoother experience for both partners and customers,” according to the documents.

Microsoft NCE Update

In an email to CRN, a Microsoft spokesperson confirmed that the policy change will allow two separate MSPs and two separate distributors to transfer NCE subscriptions as long as the original MSP and distributor agree to it.

“The future partner is responsible for payments to Microsoft for the remainder of the subscription term,” according to the spokesperson. “If a current partner is being billed monthly for an annual term subscription, the current partner will no longer receive further invoices upon transfer. If the current partner made an upfront payment to Microsoft for the entire subscription term, they would receive a prorated refund.”

The inability for Microsoft solution providers to transfer end customer NCE subscriptions before they’ve ended has caused issues for some partners when bringing on a new customer in the midst of a subscription with a separate solution provider, partners have told CRN.

Some partners have had to work out deals leaving revenue to the old partner, for example, until the subscription ends, partners have told CRN. This could mean months of lost revenue if the end customer opted for an annual commitment. Under NCE, annual commitments are 20 percent less than monthly terms.

Jean Prejean, president of Metairie, La.-based Microsoft partner Guardian Computer – a member of CRN’s 2024 MSP 500 who previously discussed facing such a difficulty after NCE’s debut – told CRN in an interview that midterm transfers are a “highly beneficial change.”

“This flexibility is crucial for adapting to business dynamics like mergers, acquisitions or shifts in customer preferences,” she said. “It allows us to be more responsible and agile in how we manage our client relationships.”

The Microsoft spokesperson confirmed that M&As are among the scenarios partners cited for needing to transfer licenses.

For future NCE adjustments partners are interested in, solution provider executives including Prejean have told CRN that a longer cancellation window than seven days – such as at least a month – would provide customers more flexibility without financial consequences.

A blog post on distributor Pax8’s website about the “change of channel” policy says that transfers do not “open a new seven-day modification window” for the subscription. The current and new indirect provider or direct bill partner both need to approve the transfer.

Bobby Guerra, CEO of Jacksonville, Fla.-based Microsoft partner Axiom, told CRN in an interview that the rollout of NCE despite vocal criticism from some partners looked as if Microsoft didn’t understand the value of CSP partners and MSPs in grassroots implementation of the Microsoft 365 suite.

It “is exciting news to see Microsoft moving in the direction we have been begging for since NCE’s inception,” Guerra said.

Other NCE Updates

In the Microsoft documents revealing the policy change, the vendor said it is also updating the current Azure plan and per-user subscription transfers “to allow for new commerce subscriptions” and “enable CSP partners to move their customers’ subscriptions to either new or different partners, primarily by enabling NCE subscriptions to transfer from one partner to another,” according to the documents.

“This enhancement also covers transferring Microsoft 365 with Teams subscriptions for existing customers,” according to the documents.

Other NCE changes include Government Community Cloud (GCC) offers becoming available in CSP new commerce on April 1, according to Microsoft.

On March 1, NCE license-based public sector product stock-keeping units (SKUs) became available in partner center. However, Microsoft continues to address some errors that happened in the CSP NCE public sector price list. Some of those issues will be fixed May 1, according to the vendor.

In June and September, Microsoft will retire select NCE application programming interfaces (APIs) that retrieve billed and unbilled daily rated usage reconciliation. Newer APIs are generally available, according to the vendor.