I have worked in IT and development since 1998, and Rizonetech is a Microsoft Partner: we transact, deploy and support Microsoft 365 directly. For which plan each person needs, and where your data is stored, read our Microsoft 365 guide for South African SMBs. Every rule below is Microsoft’s own, read on 12 October 2026.
What is the New Commerce Experience?
The New Commerce Experience (NCE) is how Microsoft sells Microsoft 365 through its partners. It separates two things that are easy to confuse:
- The term is how long you commit to the licences: a month, a year, or for some products three years, according to Microsoft’s partner documentation.
- The billing frequency is how often you pay. An annual term can be paid once a year or each month.
The term is what decides your flexibility. Paying monthly on an annual term does not make it a monthly commitment.
Microsoft 365 NCE monthly vs annual commitment: what does each cost?
On Microsoft’s South African price pages, a monthly subscription costs 20% more than the same plan paid yearly. These are Microsoft’s list prices per user per month, in US dollars, excluding VAT, read on 12 October 2026:
| Plan | Paid yearly (annual term) | Monthly subscription |
|---|---|---|
| Business Basic | USD 7.00 | USD 8.40 |
| Business Standard | USD 14.00 | USD 16.80 |
| Business Premium | USD 22.00 | USD 26.40 |
These are the versions that include Microsoft Teams. Microsoft also sells each plan without Microsoft Teams at a lower price, so check which version a quote names. A partner sets its own price and its own rand conversion, so a quote may differ from these list prices.
There is a third option between the two. Since 1 April 2025, an annual term billed monthly costs 5% more than the same term paid up front, according to Microsoft’s billing announcement. You keep the annual lock-in but spread the payments.
What does that mean for a ten-person business?
Take ten people on Business Standard, at the list prices above, before VAT. These illustrative totals assume all ten seats stay active for twelve months and the monthly price does not change at any renewal:
| How you buy | Cost for a year |
|---|---|
| Annual term, paid yearly | USD 1,680 |
| Annual term, paid monthly (5% more) | USD 1,764 |
| Monthly term for all ten | USD 2,016 |
| Eight annual seats paid yearly, two monthly seats | USD 1,747.20 |
The monthly term costs USD 336 more a year for flexibility you only use if your headcount changes. Keeping two seats on a monthly term costs USD 67.20 more than committing all ten, and lets you schedule the removal of those two seats at their next monthly renewal, within your partner’s notice period.
When can you cancel or reduce an NCE subscription?
Only in short windows. Microsoft’s rules for new commerce subscriptions give these:
- Cancelling: within 168 hours (seven days) of the start of any term, for a prorated refund. That includes the first seven days after each renewal. After that, the subscription is billed for the full term, even if you stop using it.
- Reducing seats: only within seven days of when those seats were added, whether at purchase, at renewal or mid-term. Seats added mid-term have their own seven-day window, which covers only those seats.
- Adding seats: at any time. Added seats share the subscription’s end date and price.
So on an annual term, if someone leaves in month four, that licence keeps billing until renewal. Plan for it: reassign the licence to the next person who joins, or keep that role’s seat on a monthly term.
Can you change plan or term during the year?
You can move up, but not down. Microsoft calls a move to a higher paid plan an upgrade, and allows it mid-term or scheduled for the renewal date. Downgrades are not supported, and an upgrade cannot be undone once it is submitted.
The term works the same way. For an eligible subscription, your partner can move a monthly term to an annual term mid-term, but not an annual term to a monthly one. Converting to an annual term starts a full annual commitment from the conversion date, and it does not open a new seven-day cancellation window. Ask your partner to confirm the new end date before you approve it.
At renewal, your partner can schedule changes: more or fewer seats, a different term or billing frequency, or an upgrade. Subscriptions renew automatically by default, and a scheduled change only works while auto-renew is on. A move to a lower plan means reducing seats at renewal and buying the lower plan as a new subscription.
Microsoft’s price for an unchanged subscription is protected during its term. Microsoft says price changes take effect at renewal, upgrade or term conversion, so an upgrade or a move to a longer term takes the current price. That protection is a real benefit of an annual term when prices rise, as Business Basic and Business Standard did on 1 July 2026. Whether your rand invoice stays fixed depends on your agreement with your partner.
How does a partner’s notice period fit the renewal date?
The windows above are Microsoft’s rules for the subscription your partner holds. Your agreement with your partner can add its own commitments and notice deadlines, and Microsoft’s seven-day window does not override them. Before you rely on monthly seats, get written confirmation that your agreement allows monthly reductions and what notice it needs.
Your partner needs time to schedule your changes before Microsoft’s renewal date, so that the reduced number of seats takes effect when the term renews. Rizonetech’s own NCE agreement covers one-year terms: each subscription runs for one year, renews on its own, and needs written notice at least 60 days before the term ends to stop a renewal.
Put two dates in your calendar for each subscription: the notice date 60 days before renewal, when you decide what changes and ask your partner to schedule it, and the renewal date itself. Get the scheduled change confirmed in writing. If something still needs correcting after the renewal, ask your partner for the exact end of the seven-day window. The admin centre shows each subscription’s dates on the Billing, Your products page.
What about the security you pay for in Business Premium?
Business Premium’s value is its security, and several of its controls need configuring. Premium includes Microsoft Entra ID P1, which gives Conditional Access for rules such as requiring multifactor authentication or blocking sign-ins from unmanaged devices. Risk-based policies need Entra ID P2, which is not part of Premium.
Without Conditional Access policies and enrolled devices, you leave important Premium controls unused. Some email protection works without setup: Microsoft’s Built-in protection gives Safe Links and Safe Attachments to all recipients by default. Our Business Premium activation guide lists what to switch on.
Is your Microsoft 365 data stored in South Africa?
For specified workloads, yes. For a tenant with South Africa as its default geography, Microsoft commits to store Exchange mailboxes, SharePoint, OneDrive and Teams chats at rest in South Africa. Other services, such as Forms and Planner, are outside that commitment. Check the Data location page in your admin centre rather than assuming, especially for an older or migrated tenant. The commitment term does not change where data is stored.
What are the mistakes to avoid?
- Committing everyone annually and then needing to cut seats. After seven days, those seats bill until renewal.
- Paying the monthly price for a stable headcount. On Business Standard that is USD 2.80 per user per month for flexibility you do not use.
- Missing the notice date. A reduction is best scheduled before the renewal, and a partner needs notice to do it.
- Buying Premium and never switching its security on.
- Assuming every service stores data in South Africa. Forms and Planner are outside the commitment.
How should you decide?
Answer these in order before you buy or renew:
- Which seats are stable for a year? Put those on an annual term.
- Which seats might go in the next few months? Keep those on a monthly term, or plan to reassign them.
- Do you want to pay monthly? If so, an annual term billed monthly keeps the lower commitment price for 5% more.
- What is each subscription’s renewal date, and when is your partner’s notice date before it?
- Is the security you pay for configured? Check Conditional Access and device management in the admin centre, and run the free Microsoft 365 check to see what your setup shows from outside: the tenant, mail route, SPF, DKIM, DMARC and Autodiscover.
FAQ
Is an annual NCE subscription billed monthly the same as a monthly subscription?
No. An annual term billed monthly is still a one-year commitment, with the same seven-day windows. Only the payments are spread, at 5% more than paying up front. A monthly term can be reduced at each monthly renewal, subject to your partner agreement.
Can I cancel Microsoft 365 after 7 days?
Normally, no. After 168 hours, cancellation is no longer available under Microsoft’s rules for these subscriptions, except where the law requires otherwise. Ask your partner to stop the next renewal; the current term remains payable.
Can I reduce licences mid-term on an annual NCE subscription?
Only seats added in the last seven days. Other seats stay until the renewal, when you can reduce them in the seven days after it renews.
Do Microsoft 365 prices change during my term?
Not for an unchanged subscription. Microsoft’s price is protected for the term, and changes at renewal, upgrade or term conversion. Whether your rand invoice stays fixed depends on your partner agreement.
What should you do next?
Look up the renewal dates of your subscriptions, then sort your seats into stable and uncertain before the next one comes round. If you would like help, licensing is part of our Microsoft 365 service: the right licence for each person, and the NCE terms explained before you commit. For larger estates moving to the cloud, read the Azure governance whitepaper.
Published 16 June 2026. Last updated 12 October 2026.