Microsoft introduces Extended Service Terms

From 4 May 2026, Microsoft is introducing Extended Service Terms (ESTs). These give you you more flexibility and extra time when deciding whether to renew or cancel your subscriptions.

Under EST, you’ll pay 3% above the monthly rate for your subscription, but in return, you’ll gain the freedom to come out of EST and renew, upgrade or cancel your subscription at a time best for you.

What’s changing on 4 May?

Currently, you’ve got a free grace period for accessing services on nonrenewed subscriptions, however this will be discontinued from 4 May.

This means you’ll need to:

• Pay the additional 3% to enter an EST
• Actively renew or cancel your subscription

What’s new with EST?

Traditionally, you had two options when your subscription expired: Renew, or turn auto renew off, triggering a grace period of free service for a limited time. With EST, you’ll have three: Renew, cancel, or transition to EST for the flexibility to cancel or upgrade your subscription at a time more convenient for you.

It’s important to note, if you’ve turned off auto renew for your subscriptions without scheduling a cancellation, your subscription will be converted to EST to prevent service disruption.

If you want to cancel your subscription at the end of your term, you’ll need to set your cancellation as a scheduled action.

What’s in the future for EST?

Microsoft has indicated further EST-related UX and API enhancements are planned, but specific reporting capabilities are yet to be formally announced.

How to prepare for EST

If you don’t want your subscriptions to transition to EST, you’ll need to set up auto renewal of your licences, or schedule a cancellation at the end of your term. If you’ve already got your next renewal of cancellation set up as a scheduled action, there’s no action required. For context, new or renewing subscriptions are set to renew into their existing subscription terms by default the day after the subscription end date.

If you’re unsure on whether you want to renew or cancel, your subscriptions will automatically transition to an EST, allowing you additional time to make a final decision.

Alternatively, you can convert your EST to a standard subscription at any time, cancelling your subscription and issuing a prorated refund. Then a new subscription will begin on the day of conversion. During the conversion process, you can still upgrade, downgrade, adjust seats, or make any other changes to your new standard subscription.

What’s next?

If you need more guidance on your next steps regarding your subscriptions, or want more information on what Extended Service Terms could mean for you, reach out to us. We’ll be happy to answer any questions you may have, and help you navigate this transition.