Microsoft Introduces New Paid Extended Service Term for Subscription Renewals

Towards the end of last year, Microsoft introduced a major pricing update. Now, Microsoft is changing how subscriptions are handled once they reach the end of their term. Until now, customers could either renew a subscription or turn off auto-renew and rely on an automatic 90-day free grace period to maintain service access.

While this approach offered flexibility, it often resulted in unclear timelines and unplanned service usage. So, Microsoft is retiring the automatic free grace period and replacing it with the paid Extended Service Term (EST) to provide more predictability and control.

Instead of free continued access, expired subscriptions can now move to a paid extension, ensuring uninterrupted service with clear and transparent billing. Let’s explore what’s changing and what it means for partners and customers.

EST is a paid extension option that lets customers continue using Microsoft services after a subscription reaches the end of it term, while they decide whether to renew or cancel.

Unlike the free grace period, EST requires an explicit, paid choice and runs on a monthly basis, with charges applied only for the days used. During EST, the number of seats and the service level remain fixed and cannot be changed, ensuring stable access and uninterrupted access while customers finalize their subscription decisions.

When a subscription reaches its term end, you can move it to EST to keep the service active with monthly billing. The subscription is charged at the standard monthly rate plus a 3% uplift or 23% if no monthly plan exists and can be renewed or cancelled whenever needed.

This change applies to online services subscriptions under the Microsoft Customer Agreement (MCA).

Direct Microsoft Customers

• Applies to: New subscriptions or renewals on or after 9^th February 2026.
• How to manage: Microsoft 365 admin center or with help from a Microsoft sales specialist.

CSP Customers

• Applies to: Subscriptions expiring on or after 1^st April 2026.
• How to manage: Through your Cloud Solution Provider (CSP) partner.

EST isn’t a separate product you purchase; it’s simply an option you can choose at the end of an existing subscription. Instead of being limited to just renewing or turning off auto-renew, you now have three clear end-of-term choices:

• Renew the subscription,
• Cancel the service, or
• Continue temporarily under EST.

This gives partners and customers who purchase directly from Microsoft more control and time to align their next steps without causing service disruption.

Let’s look at how these three end-of-term options: renew, extend with EST, or cancel—differ and what each means for you.

Option	Description	Key Details	Billing/ Charges	Additional Notes
Renew	Continue your subscription without interruption.	Service remains active with full functionality.	Standard monthly or annual rate.	You can update subscription terms as needed during renewal.
Extend with EST (New)	Paid monthly extension to keep service active while finalizing renewal plans.	Can cancel anytime or convert back to standard subscription.	Standard monthly rate + 3% uplift (23% if no monthly plan).	Seats and service level cannot be changed during EST.
Cancel	Stop the subscription at term expiration.	Service ends immediately.	No charges.	Customer data is retained 90 days under Microsoft’s retention policy; after that, it cannot be recovered or reactivated.

We hope this blog helps you understand your subscription end options, so you can make the best choice to keep services running smoothly or pause them without surprises. Stay tuned for more upcoming blogs!