Having resold Microsoft software and licenses for several decades, we’ve seen zillions of changes in how their products are priced. We don’t publicize all the changes, but one that is coming up will impact a lot of our nonprofit customers. Since there will be reduced flexibility, we believe that it will be necessary to engage in more planning than was required in the past. So, we thought that we would give you a heads-up for thinking about future license budgets and purchases.

Free Office 365 E2 Licenses Discontinued

As you likely know and have hopefully planned for, the free version Enterprise license for nonprofits has been discontinued. From October 1, 2023, customers who subscribed via the Office 365 E2 grant offer will no longer be able to renew the legacy Office 365 E2 grant offer.

Alternatives to the free Office 365 E2 version

At renewal, customers subscribed to this legacy offer must move to the equivalent license, such as the Office 365 E1 plan. Alternatively, small non-profit customers can transition up to 300 of their users from the legacy Office 365 E2 nonprofit grant to the Free Microsoft 365 Business Basic nonprofit grant.

For organizations that have more than 300 users, they can access up to 2000 granted Office 365 E1 licenses through a Microsoft Enterprise Agreement.

Additional Changes

The following are some key points on how the licenses will be administered in the future. One that will affect our users most is the new cancellation policy. In the current arrangement we can return unused licenses or cancel the subscription at any time and get a refund. This feature will go away.

New Cancellation Policy

Subscriptions can only be canceled with a prorated credit or refund within 7 days of starting or renewing. Canceled subscriptions within this period will have their prorated amount credited to the next invoice or returned in the next billing cycle.

New Agreement (MCA), Billing Accounts, and Profiles

A digital, automatically updated purchasing agreement for Microsoft products and services, replacing previous agreements will be issued. Each organization will have a billing account to manage account settings, invoices, payment methods, and purchases. Special roles can be assigned to users within the organization for managing these accounts. Linked to the billing account are profiles which contain payment methods and invoice information for Microsoft purchases.

Flexible Billing Frequencies and Subscription Lengths

In the new system, options exist to pay for subscriptions monthly, yearly, or every three years, depending on the service.

Plan Ahead

Customers are no longer able to renew the legacy Office 365 E2 grant offer and will need to find alternative ways to obtain this functionality. In addition, the fact that there is now only a 7-day cancellation window requires careful planning and selection.