Effective May 4, 2026, Microsoft is introducing a major change to subscription end-of-term behavior, called the Extended Service Term (EST): the free 30-day grace period is being removed!
Below is a summary of the impact of this change, along with an FAQ section and recommendations.
What’s changing:
Microsoft is ending the free grace period (previously 30 days) that applied when a subscription reached its end of term without a scheduled renewal.
At the end of the term, customers will now have three options:
- Renew the subscription for a new commitment term (recommended)
- Cancel at the end of the term (the service stops immediately after expiration)
- Move to the Extended Service Term (EST) to continue the service on a monthly basis at an increased price
Eligible subscriptions for EST:
The Extended Service Term (EST) applies to Microsoft cloud subscriptions under the New Commerce Experience (NCE) with a commitment term (license-based) across all three segments—Commercial, Education, and Nonprofit—when they reach the end of their term without a scheduled renewal.
Eligible subscriptions include:
All subscriptions purchased or renewed on or after April 1, 2025, that expire on or after May 4, 2026 (inclusive).
EST terms and conditions:
The Extended Service Terms (EST) allow customers to continue using their service after the expiration date, with monthly billing as follows:
- Monthly price + a 3% uplift, or
- A 23% uplift if no equivalent monthly plan exists
Important Reminder
- At the end of the term, the service stops immediately
- Data from canceled subscriptions is retained for 90 days, but the service cannot be restored without an active subscription (standard or EST)
Extra
- EST is a paid option — it is not a free grace period
- Customers can remain on EST indefinitely
- Subscriptions can be canceled or converted to a new commitment term at any time
- Subscriptions under EST cannot be transferred between partners (not supported via P2P)
- EST charges appear as separate SKUs on invoices
- No changes allowed to quantity, term, or billing frequency
- No upgrades are permitted
- Can be canceled at any time (no 7-day cancellation window)
- Charges are prorated based on usage
- Coming soon: The EST option will soon be available in your ITCloud partner portal. More details will be shared shortly.
Recommandations:
We strongly recommend that you:
- Review upcoming expirations for eligible subscriptions
- Discuss renewal preferences early with customers
- Explicitly define an end-of-term option for each subscription:
- Renew
- Cancel at the end of the term
- Move to EST
- Use the Services/Client Report feature in your ITCloud partner portal to access the list of impacted subscriptions
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