Effective April 1, 2026, the free grace period for non renewed subscriptions will be discontinued. Customers who choose not to renew must either cancel at the end of their term—resulting in immediate loss of access—or continue their service through a paid Extended Service Term (EST).
Under the EST, subscriptions are billed monthly at the current monthly term rate plus a 3% uplift (or 23% uplift if no monthly plan is available). Once a subscription enters the EST, partners may cancel or convert it to a standard subscription at any time. Charges apply only for the days used and are billed monthly on a prorated basis.
Subscription Eligibility
License based services purchased or renewed on or after April 1, 2025, and expiring on or after April 1, 2026, with auto-renew turned off, will automatically move into the EST upon expiration. This routing ensures customers are safeguarded against unintentional loss of service.
To prepare for enforcement of Extended Service Terms (EST)—which replace the historical free grace period—partners should complete the following actions
Proactively discuss options with customers before their subscription end date
Partners should ensure customers understand the three end of term choices:
- Renew their subscription
- Cancel at end of term
- Move into Extended Service Term (EST) at a paid monthly rate
Identify subscriptions that will automatically transition into EST
all the following conditions apply:
- Purchased or renewed on or after April 1, 2025
- Expire on or after April 1, 2026
- Auto renew is OFF
Partners should audit their catalog to flag and monitor such subscriptions
Take action for customers not wanting to move into EST
If a customer does not want to begin a paid EST period, partners must:
- Schedule a renewal (if the customer intends to continue service), or
- Schedule cancellation at subscription expiry to avoid automatic EST activation
Microsoft confirms that customers who do not renew or cancel will be placed into EST by default under applicable conditions.
The change is being introduced to improve subscription management and ensure that customers who continue to use the service after their subscription expires contribute to the cost of maintaining the service.
For eligible subscriptions, customers and partners will have three options at the end of the term.
Renew the subscription for a new term
Partners, on behalf of customers, may renew the subscription with or without any changes. Adjustments can include term length, billing plan, seat count, upgrades, and more.
Cancel at the end of the term
Partners can schedule the subscription to end at the term’s conclusion. Once the subscription expires, all associated services will be immediately unavailable.
Additional cancellation guidance will be shared closer to the effective date.
Move to an extended service term
Partners, on behalf of customers, may transition the subscription to an extended service term.
- Services will continue uninterrupted
- Billing will occur monthly at the current monthly price plus a 3% uplift (or 23% uplift if a monthly plan does not exist)
- Subscription owners can cancel or convert out of the extended term at any time
- Charges will be prorated based on the number of days used
Recommendation: Partners should engage customers early to understand their renewal intentions before the subscription reaches its end date.
If your subscription is in extended service term, you have the following options:
Once a subscription enters the extended service term (EST) state, no modifications are permitted excluding cancellation. However, customers can convert from an extended service term subscription to a new standard subscription at any time. For subscriptions that go to or from EST or convert to other SKUs, the subscription IDs are retained.
The extended service term and supporting features and policies will be applied to license-based services across all channels (CSP, MCA-E, and Buy-Online), covering all markets. Subscriptions of all terms will be impacted by extended service terms (monthly, annual, triennial). The following scenarios will all support the extended service term changes:
- Commercial
- Public Sector in CSP
- Specialized offers
- End of sale SKUs w/conversion
The following scenarios will not be supported by EST:
- Software subscriptions
- Perpetual software
- Azure Reservations
- Third party
- Azure Savings plans
- Trials and End of sale SKUs
By default, new or renewing subscriptions are set to renew into their existing subscription terms the day after the subscription end date. Partners can update their subscription renewal options up until the day before the subscription term ends.
If the subscription is eligible* for extended service term and is not set to auto-renew, then the subscription will automatically transition to extended service term the day after the subscription end date.
The extended service term policy will go into effect on April 1, 2026, and is applied to any subscription purchased or renewed on or after April 1, 2025, that expires on or after April 1, 2026.
Partners can find the renewal status of their customers’ subscriptions in the Cloud Marketplace (CMP).
If a partner selects "cancel at end of term," the subscription will go into a disabled state the day after expiration. In this state, the service will be lost, but the data will be retained for 90 days. This means that partners will still have 90 days from the subscription end date to recover the data for their subscriptions. Once a subscription has been cancelled it cannot be reactivated. The customer must buy a net-new subscription to continue service.
If auto-renew is turned off and the subscription goes to extended service term, it will indefinitely remain in extended service term until it is manually canceled. Once an extended service term subscription has been cancelled, it cannot convert back to the extended service term state.
Yes, you can cancel immediately.
Need Help?
For questions, support, or assistance meeting these requirements:
| Microsoft CSP Partner UpdatesTop 5 Microsoft 365 Misconfigurations Leading to Global Admin Compromise
Even with strong security practices, small missteps in Microsoft 365 can create dangerous gaps. Attackers today use AI agents, generative AI phishing kits, and automation tools to exploit global admins, the accounts with the highest privileges. Know and secure your accounts today.Stay Authorized as a Microsoft CSP Indirect Reseller
Microsoft is introducing new compliance requirements for CSP Indirect Resellers. These updates aim to strengthen partner security and ensure operational readiness. To remain authorized and continue transacting, please review and meet all the requirements outlined below.