On April 1, 2026, Microsoft is ending the free grace period that customers currently receive when a Cloud Solution Provider (CSP) subscription expires without renewal. Instead, expiring subscriptions will use a paid Extended Service Term (EST) model.
Under the EST model, when a CSP subscription’s term ends, customers and partners have three options:
- Renew the subscription for a new term (to continue service as normal).
- Cancel at end of term, ending the service immediately upon expiration. (A new “cancel at end of term” option will be available in CSP systems by January 2026 to facilitate this.)
- Enter an Extended Service Term (EST), a paid monthly extension, to continue service beyond the original end date without interruption.
Availability timeline: Microsoft has been rolling out the EST feature ahead of time.
In November 2025, the EST option became available in partner sandbox environments for testing.
By January 2026, the Partner Center dashboard will be updated (including the new “cancel at end of term” setting) to support EST.
The EST policy officially takes effect for all applicable CSP subscriptions expiring on or after April 1, 2026.
What is Extended Service Term (EST)
Extended Service Term (EST) is a paid extension period for CSP subscriptions after their scheduled end date. It allows customers to maintain access to their cloud services while deciding next steps. If a subscription is not renewed or explicitly set to cancel, it will automatically transition into EST once it expires.
How EST works: During the EST period, service continues uninterrupted under the expired subscription. The subscription essentially goes month-to-month, billed at the standard monthly rate plus a 3% uplift, a small surcharge on the regular price. This means you pay a bit more than the normal monthly price to keep using the service after the term end. You can exit EST at any time – either by canceling the subscription or by converting to a new standard subscription term (renewing properly).
Comparison with the current grace period model: Today, if a CSP subscription lapses (not renewed), there is a short free grace period during which services remain available without payment. In other words, customers had a limited time after expiration with no loss of service and no charges, allowing breathing room to decide on renewal. Starting April 1, 2026, this free grace period will no longer exist. With EST, any continued use of the service after the end date will incur charges (at the 3% higher monthly rate). In summary: previously you got a brief free extension; going forward you must either renew, stop the service at term end, or pay for an extended term if you need extra time. This change provides a clearer, more accountable approach – if you keep using the service, you will pay for it, rather than Microsoft covering it for free.
Key Features
- Continuation of Service: EST ensures there is no interruption in service when a subscription term ends. Customers who need more time to make renewal decisions can keep their cloud services running seamlessly into the EST period.
- Paid Monthly Extension: The EST is a month-to-month extension of the subscription, billed at the normal monthly subscription price plus a 3% surcharge. (For example, if the monthly rate was $100, EST rate would be $103.) This small uplift aligns with the cost of maintaining services during the extended term.
- Flexible Cancellation: Customers can cancel EST at any time. There is no long-term commitment in the extended term.
- Renewal or Conversion Options: At any point in EST, you can choose to renew into a new standard term (for example, start a new annual subscription) or let the EST continue month-to-month. This provides flexibility: you might use EST while finalizing a renewal or migration plan, then either renew fully or stop the service.
- Automatic Enrollment if No Renewal: For eligible CSP subscriptions, entering EST will happen automatically if you take no action. Any subscription that meets all of the following: 1) was purchased on or after April 1, 2025 (under the new commerce system), 2) expires on or after April 1, 2026, and 3) had auto-renewal turned off, will be seamlessly moved into EST when it expires. This safety net ensures customers don’t accidentally lose service — but they will be paying for the extended period. (Subscriptions purchased before April 2025 are generally not automatically moved to EST and will follow their original terms.)
Licensing
From a licensing perspective, the introduction of EST means that organizations must plan their renewals and expirations more carefully. There will no longer be a “buffer period” of free service after a term ends. If you intend to stop using a product at term end, it is important to utilize the new “Cancel at end of term” option (available by early 2026) to ensure you are not charged. Conversely, if you need continuity but are unsure about renewing for a full year, EST provides a paid interim solution.
Customers should update their internal processes to accommodate these changes by April 2026. Budgeting for software renewals should take into account that any post-term usage will be billed. It’s wise to decide before the expiration date whether to renew or cancel, to avoid unintended costs. The EST can be seen as a convenient fallback to prevent service disruption, but it comes at a price premium, so proactive renewal management remains important.
Call to action: If you have questions about how Microsoft’s EST policy will impact your licensing or need guidance on the best renewal strategy for your organization, please contact SCHNEIDER IT MANAGEMENT. Our licensing experts can provide personalized advice on managing CSP subscriptions under these new rules and help you choose the most cost-effective option (renewal vs. EST vs. cancellation) for your needs.
More Information
For further details straight from Microsoft, please refer to the original announcements and documentation on this change. Below are useful sources with more information about the Extended Service Term for CSP:
- Microsoft Partner Center Announcement – “New extended service term for Cloud Solution Provider (CSP) subscriptions” (October 14, 2025).
https://learn.microsoft.com/en-us/partner-center/announcements/2025-october#13 - Microsoft Partner Center Announcement – “Extended service terms (ESTs) in sandbox and November price lists” (November 1, 2025).
https://learn.microsoft.com/en-us/partner-center/announcements/2025-november
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