We are considering the available licensing options for Microsoft products under the CSP/ NCE model.

Anna Gajdowicz Anna Gajdowicz October 23, 2023

One of the frequent questions from our clients interested in purchasing Microsoft products through the CSP (Cloud Solution Provider) program is about the available licensing options and which one best suits their needs. In this article, we will take a closer look at the range of Microsoft licensing options for businesses considering purchases such as Dynamics 365 under the CSP/NCE model.

Microsoft offers various payment structures to cater to different preferences and budgets. What can you expect when receiving a licensing offer? In the legend, the letter “P” stands for “Plan,” and “1M,” “1Y,” and “3Y” indicate whether the commitment is monthly, yearly, or three-year. There are several key aspects to consider when choosing the most suitable option, with one of the main factors being the flexibility of monthly payments versus the cost-effectiveness of annual commitments.

Let's consider the available subscription billing models:

1. P1M Monthly (Monthly payment with an option to cancel each month):
This licensing option allows you to pay for the Microsoft service on a monthly basis, giving you the flexibility to cancel the subscription within 7 days of the renewal date (for example, if your subscription started on the 10th of the month, the cancellation window is open from the 10th to the 17th of each month). While this subscription billing model provides the flexibility of monthly payments, the costs might be slightly higher compared to an annual commitment (due to the risk of currency fluctuations). We recommend this option for companies that frequently make changes to their team and anticipate the possibility of reducing the number of licenses in the subscription.

2. P1Y Monthly (Monthly payment with an annual commitment):
In this licensing model, payments are made monthly, but you commit to maintaining and paying for the subscription for a 12-month period. This commitment provides Microsoft with a steady income throughout the year and offers clients lower costs compared to the P1M Monthly model due to the annual commitment. This billing model requires an agreement that obligates you to pay the installments and is recommended by Microsoft for direct purchases.

3. P1Y Annually (Annual Payment): This licensing model involves a one-time upfront payment for an entire year of service. By committing to use the service for a full year and paying in advance, Microsoft can offer a reduced rate compared to the monthly payment options. This is a very cost-effective option for organizations that can commit to a year-long subscription.

4. P3Y Annually (Three-Year Payment): This licensing model involves making a one-time upfront payment for a three-year period. It is suitable for customers who plan to use the service long-term and want to optimize their subscription costs. By committing to a three-year period, organizations can benefit from even lower rates, making it an excellent option for those with long-term strategic plans.

In summary, Microsoft offers various payment structures to cater to different preferences and budgets. To choose the most suitable subscription model, we encourage you to contact us to share your expectations. We will be happy to provide recommendations tailored to your specific needs. Remember, Microsoft licensing should align with the needs and strategy of your organization.

For more information on licensing terms, please refer to the current: MS Licensing Guide.