💡 Our Technical Review in summary
Summary
- Microsoft is introducing the Extended Service Term (EST), a new paid option for subscriptions reaching the end of their term.
- This new model replaces the previous “grace period” policy, which allowed for a short window of continued service after expiration without additional cost.
- The EST is designed as a temporary, monthly extension to prevent service disruption while organizations finalize their long-term renewal plans.
- The update affects all Online Services governed by the Microsoft Customer Agreement (MCA), including both Direct and Cloud Solution Provider (CSP) customers.
Impact
- Financial Cost: Unlike the retired grace period, the EST is a paid service. The pricing is set at 3% higher than the standard monthly rate.
- Prorated Billing: Charges for the EST are prorated, meaning organizations only pay for the specific number of days the extension is active before a full renewal or cancellation.
- Service Restrictions: While a subscription is in the EST phase, administrators cannot change the seat count or modify the service level (tier).
- Immediate Disruption: If a customer chooses the “Cancel at term end” option or fails to select EST/Renew, service will terminate immediately on the expiration date. While data is retained for 90 days, active access to services will cease.
- Flexibility: The EST can be converted back to a standard subscription or canceled at any time during the extension month.
Action Required
- Review Renewal Timelines: IT Admins should audit current subscription expiration dates to ensure renewal decisions are made before the deadline to avoid the 3% EST premium.
- Update Procurement Workflows: Internal purchasing processes should be updated to reflect that there is no longer a free “grace period” for Microsoft 365 services.
- Direct Customers: Manage renewal or EST selections via the Microsoft 365 Admin Center or through assigned Microsoft sales specialists starting February 9, 2026.
- CSP Customers: Coordinate with your Channel Sales Partner to understand how they will implement these options. Note that the effective date for CSP subscriptions is May 4, 2026.
- Policy Awareness: Ensure stakeholders are aware that choosing “Cancel” results in an immediate loss of service, even though data remains recoverable for 90 days.
Microsoft Official Update
Service: N/A
Category: planForChange
Severity: normal
Updated February 9, 2026: We have updated the CSP timeline. Thank you for your patience.
Microsoft is introducing a new paid Extended Service Term (EST) to give customers additional time at the end of a subscription term to make the right subscription choices for their business without any service disruption.
Customers who don’t choose to renew their subscription by the renewal date will now have the ability to select a paid Extended Service Term (EST) option. This replaces the previous option of an automatic grace period that will be retired.
[Your Options at Subscription End:]
When a subscription reaches the end of its term, customers now have three options:
- Renew on time
- Renew (with or without changes to subscription terms) before the end date to continue service without interruption.
- *New* Extend service with a paid Extended Service Term (EST)
- Monthly, paid extension to maintain service while finalizing renewal plans
- Can be canceled or converted back to a standard subscription at any time
- Prorated charges—pay only for days used
- Pricing is 3% higher than the standard monthly rate
- Seats and service level cannot be changed while in EST
- Cancel at term end
- No additional charges
- Service ends immediately at term end
- Customer data is retained for 90 days, then deleted
These options provide a clear, predictable experience at expiration, making it easier to renew, temporarily extend service without disruption, or cancel
[Who This Applies To:]
This change applies to Online Services subscriptions governed by the Microsoft Customer Agreement (MCA).
- Customers who purchase directly through Microsoft will make changes through the Microsoft Admin Center or, where applicable, through their Microsoft sales specialist.
- Customers who purchase through a Channel Sales Partner (CSP) have the same options and will work with their partner to select the appropriate action at expiration.
[When This Takes Effect:]
- Customers who purchase directly through Microsoft: Applies to subscriptions purchased or renewed on or after February 9, 2026.
- Customers who purchase through a CSP partner: Applies to subscriptions with expiration dates on or after May 4, 2026 (previously April 1) (confirm impacted subscriptions with your partner).
