Important Changes to Microsoft NCE License Transfers

Microsoft has streamlined the process for transferring its New Commerce Experience (NCE) licenses, ensuring a seamless transition between CSP partners.

Here’s what you need to know:

1. Simplified Transfer Process

NCE license-based subscription transfers can now occur mid-term from one transacting CSP partner to another. Subscription transfers result in the creation of a new subscription under the new CSP partner, maintaining the original subscription's pricing.

1. Initiate Transfer: The new CSP initiates the transfer request through the Partner Centre and sends this to the original source CSP partner.
   
2. Source Partner Acceptance: The source partner must accept the transfer request for it to proceed.
   
3. Submission and Approval: The transfer request is submitted and processed, with statuses such as pending, in progress, and complete to track progress. A transfer can include multiple subscriptions or line items and transfers may take up to 72 hours to complete.
   
   

2. Financial Responsibilities

The source partner is financially responsible for the subscription up to the point of transfer, with the new CSP being responsible for the remainder of the term.

If the source partner prepaid upfront for an annual term subscription, they would receive a pro-rated refund for the remainder of the subscription term. Pro-rata credits for prepaid subscription charges are reflected in the subsequent month's invoice.

Why Retain Early Termination Clauses for NCE Licenses?

Despite the streamlined transfer process, it is worthwhile to retain early termination clauses in service agreements. Here’s why –

1. Protection Against Costs: If a client terminates the agreement before the end of the 12-month commitment, without transferring to a new CSP, early termination costs will inevitably arise.
2. Unforeseen Charges: The transfer process may not cover all potential costs incurred during the process, now or in the future.
   

For detailed information, refer to the official Microsoft documentation here.

These long-awaited changes simplify the NCE license transfer process. However, maintaining early termination clauses in relevant service agreements remains beneficial. These clauses ensure that service providers are adequately protected against unexpected costs, ensuring comprehensive protection and financial stability.


Interested in incorporating these changes into your service agreements? Our expert legal advisor is dedicated to providing tailored solutions that protect your business interests and ensure that your agreements remain up-to-date with future changes.

Get in touch with us today!