Microsoft wants to simplify licencing with the new commerce experience (NCE). To achieve this, from 1st January 2022, the current Open License programme will end. Customers and partners will no longer be able to renew software licences or online services. Instead, new licence-only purchases will be transacted through partners in the Cloud Solution Provider (CSP) programme.
The Microsoft Open License programme
With a customisable platform and price advantages for volume purchasing, the Open programmes (Open Value, Open Value Subscription, and Open License) have provided a simple, cost-effective way to buy perpetual software licences and online services on an as-needed basis to avoid overspending on licence sprawl.
It was seen as a refreshing change for smaller businesses that often came up against the challenge of meeting minimum purchasing requirements.
The Open License programme evens the playing field and gives SMBs access to competitive pricing. Now, organisations of any size get the same opportunities to harness Microsoft services and licensing on their terms as they scale.
But this model must keep evolving to fit today’s market.
In response to today’s customer needs, Microsoft is stripping out old and unwanted purchasing options and providing new offers via the Microsoft new commerce experience.
Businesses can continue to renew and purchase new software licences, Software Assurance, and online services through the Open License programme until December 31, 2021. After that, they’ll have to reach out to partners in the CSP programme.
What does this mean for MSPs?
Microsoft is actively encouraging businesses to turn to their partners for licence asset management. This is a great new revenue stream, but it comes with some challenges:
- Direct partners will have to manage the additional billing and provisioning for newly onboarded customers. Meanwhile, indirect partners must have faith that their indirect provider can manage the task at scale.
- To encourage annual licence commitments, monthly subscription prices will rise. MSPs must have frank conversations with their customers and manage their expectations accordingly.
What should MSPs do about the Microsoft Open License programme change?
Learn more about your customers
Licence changes and resubscriptions are perfect opportunities for MSPs like you to get under the skin of your customers. If you want to offer them the best products and services, you need to have frank conversations about your clients’ future.
By understanding their goals and challenges, you’re better equipped to offer the solution they need – even if that solution is more expensive.
For example, if your client wants the flexibility of monthly license subscriptions, due to market worries or employee churn, you can have an open discussion about the costs involved.
This consultative approach positions you as the trusted advisor, allowing you to guide your customers’ tech maturity in a way that leads to long-term profitability.
Explore new product opportunities
Selling licences isn't the money-maker it used to be. For MSPs today, the big margins are in the service wrapper you put around Microsoft products. But there's still space for innovative licence products that can help new customers.
Spend time understanding the Microsoft licence offerings and find innovative ways to market to new customers in a way that makes you stand out from the crowd. Think about the challenges your potential customers face in the wake of the Open License changes and rise to meet them.
Choose the right indirect provider
When choosing the right CSP indirect provider, it’s important to know which questions to ask. Great CSP indirect providers are more than Microsoft licence shopfronts. They give MSPs access to recurring revenue sources like product services, managed services, and packaged IP. They offer training, support, and business strategy that allows you to turn tech into a service that empowers your customers.
Now powered by Pax8, we can take your business further. We help MSPs with:
- Identifying new opportunities
- Bringing products to market
- Sales training
- Certification support
…and simply navigating the Microsoft ocean in which we all swim!
There’s an opportunity in change
Businesses that were going it alone with their IT licence management are about to arrive at your door. The changes to the Open License programme are an opportunity to rethink your business strategy, maximise profitability, and help your customers do more.