Starting May 4, 2026, Microsoft is changing how Cloud Solution Provider (CSP) subscriptions behave when they reach the end of their term. The familiar grace period after expiration is being removed and replaced with Extended Service Terms (EST): a paid, month-to-month extension that applies when subscriptions are neither renewed nor cancelled.
For CSP partners, this change directly impacts renewal planning, billing outcomes and customer conversations. Understanding how EST works (and how to move customers out of EST when needed) is key to avoiding unexpected charges and confusion.
What are Extended Service Terms (EST)?
Extended Service Terms (EST) are a paid, monthly continuation period that begins when an eligible Microsoft subscription reaches the end of its term without being renewed or explicitly cancelled.
Previously, subscriptions with auto renew disabled would enter a short grace period, allowing services to continue temporarily without billing. That grace period is ending.
Under EST:
- Services continue without interruption
- Billing switches to month‑to‑month
- Pricing is the standard monthly rate plus a 3% uplift
- A higher uplift (up to 23%) applies if no monthly SKU exists
At the end of a subscription term, customers now have three explicit options:
- Renew the subscription (auto renew ON is the default)
- Cancel at end of term (service stops at expiration)
- Move to EST as a paid extension
Why is Microsoft introducing EST?
Microsoft has stated that EST is designed to:
- Align CSP subscriptions with modern SaaS billing standards
- Eliminate unintended “free” usage after expiration
- Standardize end‑of‑term behavior across channels (CSP, MCA‑E, Buy Online)
- Improve billing predictability and compliance
When does EST take effect?
EST applies to CSP subscriptions that meet all the following conditions:
- Purchased on or after April 1, 2025
- Expiring on or after April 1, 2026
- Auto renew is set to OFF
Subscriptions purchased before April 1, 2025 are not impacted.
Important enforcement clarification
While EST eligibility begins for qualifying subscriptions expiring on or after April 1, 2026, Microsoft will begin actively enforcing EST on May 4, 2026.
From May 4 onward, subscriptions reaching end of term without an explicit end‑of‑term decision will no longer continue at no charge and may transition directly into paid EST billing.
What this means for CSP partners
No more service after expiration
The traditional safety net is gone. If a customer does not renew or cancel, billing continues under EST. Without proactive management, partners may face unexpected charges and difficult renewal conversations.
Explicit end‑of‑term decisions are mandatory
Microsoft now expects partners to clearly define what happens at end of term for every eligible subscription. “Doing nothing” is no longer neutral; it can trigger paid EST billing.
Pricing and margin impact
EST includes a pricing uplift, which can affect margins if not planned for in advance. Customers who unintentionally fall into EST may also question higher‑than‑expected charges.
Operational and system readiness
Partners should expect to review and adjust:
- Renewal tracking and reporting
- Billing and reconciliation processes
- PSA and ERP integrations
- Customer renewal communications
- Internal service and escalation workflows
What Microsoft expects partners to have in place before May 4, 2026
Before enforcement begins, Microsoft expects CSP partners to have:
- Visibility into subscriptions expiring on or after May 4, 2026 that are eligible for EST
- A clear end‑of‑term decision set in Partner Center for each subscription (renew, cancel at end of term or move to EST)
- Internal awareness that EST is a paid extension, billed monthly at the current monthly rate plus a 3% uplift (or higher where no monthly SKU exists)
- Proactive customer conversations completed before expiration, so intent is confirmed in advance
What happens if you do nothing?
Here’s how subscription behavior changes once EST is enforced:
| Scenario | Outcome |
| Auto renew ON | Subscription renews normally |
| No explicit cancellation | Service and billing continue under EST |
| Cancel at end of term selected | Service stops at expiration |
What will no longer happen:
- There is no grace period after expiration.
How do you move out of EST?
EST is not permanent. Partners and customers can exit EST in two main ways:
- Cancel the subscription
- The subscription can be cancelled at any time while in EST
- Service stops after cancellation
- Unused EST time is credited on a prorated basis, following standard Microsoft billing rules
- Convert back to a standard NCE subscription
- Customers can renew or repurchase the subscription under a normal NCE term (monthly or annual)
- Once converted, EST billing stops and standard NCE pricing and commitment rules apply
This flexibility allows customers to maintain service continuity while finalizing longer‑term renewal decisions.
How partners should prepare now
To reduce risk and avoid customer friction, Microsoft strongly recommends that partners:
- Engage customers well ahead of renewal dates to confirm end‑of‑term intent
- Ensure renewal or cancellation decisions are accurately reflected in Partner Center before expiration
- Audit expiring subscriptions regularly, especially those with auto renew turned off
- Train sales, support and billing teams on EST billing behavior and scenarios
- Review pricing and margin models to account for EST uplifts
Microsoft provides renewal visibility through Partner Center insights, along with FAQs and EST scenario documentation to support this transition.
Review the resources available
- Learn more about extended service terms.
- View the partner FAQ or the EST scenarios deck.
