Microsoft is introducing a new paid Extended Service Term (EST) to replace the current automatic grace period at the end of a subscription term.
- This change applies to Online Services subscriptions governed by the Microsoft Customer Agreement (MCA) and is intended to give organizations additional, controlled time to finalize renewal decisions without service disruption.
- The change affects customers who purchase directly from Microsoft (via the Microsoft 365 admin center or a Microsoft sales specialist) as well as customers who transact through a Cloud Solution Provider (CSP) partner.
Timeline
- Customers who purchase directly from Microsoft:
Applies to new subscriptions or renewals processed after 8 February 2026. Billing admins can manage the new EST directly in the Microsoft 365 admin center or through a Microsoft sales specialist. - Customers who purchase through a CSP partner:
Applies to subscriptions with an expiration date after 31 March 2026. Customers should consult their CSP partner for details.
What is changing?
Currently, when a subscription enters the Expired status, billing admins have 90 days to resolve conflicts for any assigned licenses that exceed the purchased quantity. During this 90-day period, there is no service interruption for subscriptions assigned on a per-user basis. For non-user-based subscriptions, such as Office 365 Extra File Storage for SharePoint, a reduction in the license quantity immediately results in a reduction in storage.
This grace period will be retired and replaced by a new, paid Extended Service Term (EST), which maintains service on a month-to-month basis while internal renewal decisions are finalized. Billing admins can either renew the subscription on time or cancel it to prevent the EST from being applied.
To summarize it:
- Renew a subscription before the end date to continue service without interruption. More information
- Cancel a subscription at the end of the term to avoid additional charges. The subscription ends immediately at term end. Customer data is retained for 90 days before deletion. More information
- NEW: Extend the subscription with a paid Extended Service Term (EST).
EST is a monthly, paid extension that keeps the service active while renewal plans are finalized. It can be canceled at any time or converted back to a standard subscription. Charges are prorated, so you only pay for the days used, but the price is 3% higher than the standard monthly rate. While in this extension, the number of seats and service level cannot be changed. - Automatic (free) 90-day grace period for expired subscriptions will be retired.
