Microsoft introduction of Extended Service Terms (EST)
Please note: Microsoft has postponed enforcement of the Extended Service Term from 1st April 2026 to 4th May 2026. The information below has been updated to reflect this change
Microsoft has announced the introduction of Extended Service Terms (EST) within the CSP framework, effective from 4th May 2026. These changes are designed to improve subscription management and offer users increased flexibility.
The current behaviour of a subscription that reaches its end of term with auto renew off, will be cancelled in Cloud Market which stops billing, however, at the Microsoft side it enters a grace period. Effective 4th May, 2026, the free grace period for accessing services on nonrenewed subscriptions is discontinued.
The current approach to expiring subscriptions will be modified by removing the Auto Renew off option that previously triggered a grace period, replacing it with the new Extended Service Terms (EST).
Partners that want to set subscriptions to expire have two options, they must set either:
- Cancel at end of term – now resulting in immediate loss of service for end customers, or
- Opt for a paid EST, which is billed monthly at the standard rate plus a 3% surcharge (or 23% if no monthly plan is available).
The EST and related policies will apply to *eligible Commercial, Education, and Non-profit license-based services across all channels (CSP, MCA-E, and Buy-Online), covering all markets. All subscription durations – monthly, annual, and triennial – will be affected by the extended service terms.
Even though this change has been announced, Microsoft are still making changes to their implementation, as such, there are still some unknowns, as such, all information shared is based on what we know so far.
We’ve compiled this FAQ page, which will be updated with new details as soon as they become available.
1. What’s changing?
Microsoft is changing the end of term behaviour by removing the current grace period for expired subscriptions and introducing Extended Service Terms (EST) from 4th May 2026.
If you don’t renew you must either cancel at the end of the term (losing access immediately) or enter a paid EST, billed monthly at the standard rate plus a 3% uplift (or 23% if no monthly plan exists).
As a result of Microsoft’s changes, starting 18th December, Giacom’s updated Microsoft 365 Service Specific Terms (SSTs) will be available in Cloud Market for review.
2. Why is this change being introduced?
The change is being introduced by Microsoft ‘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.’
3. Which channels and products are affected by the extended service term?
The extended service term and supporting features and policies will be applied to Eligible Commercial, Education and Non-profit 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).
4. When is the Microsoft policy regarding extended service terms introduced and where can I find it?
The Microsoft extended service term policy will go into effect on 4th May, 2026, and is applied to any eligible subscription purchased on or after 1st April, 2025, that expires on or after 4th May, 2026. The policy is reflected in the CSP Program Guide (dated March 2025).
5. How can I agree to the new Microsoft 365 Service Specific Terms (SST) ahead of the enforcement
Starting 18th Dec, 2025, to agree the new M365 SST, simply navigate to the agreements section of Cloud Market [https://cloud.market/account-setting/terms-conditions/6/false/false] to review and agree terms. Once proactively agreed you will avoid any disruption to the service once the enforcement arrives.
6. When will the Microsoft 365 Service Specific Terms be enforced and what does that mean?
The new SSTs are now enforced in Cloud Market ahead of Microsoft’s EST launch. License changes can’t be made until the SSTs have been agreed. Partners can now set the new end‑of‑term behaviour.
7. Why is the default auto renew off position for existing subscriptions going to be converted Renew to EST?
Microsoft advise their main goal is to prevent accidental loss of service for customers who need more time to decide whether to renew, upgrade, or cancel. EST provides flexibility for partners and customers to maintain access while working through procurement or budget approvals.
8. What are the new end of term options?
The new options that have now been introduced to Cloud Market are:
- Renew your subscription: This is the default setting for all new subscriptions, if selected it will automatically renew. This includes any scheduled changes or simply continuing as is.
- Extended Service Term (EST): This option will provide continuation of service, EST’s are billed at the monthly term rate + 3% uplift. EST’s offer flexibility for making further changes and can be cancelled or upgraded to a new standard subscription at any time.
- Cancel at end of Term: Selecting this option will immediately terminate the service at the end of the term. Whilst data retention is maintained, the service cannot be recovered or reactivated.
9. How are EST subscriptions different from Standard NCE subscriptions?
If your subscription is in extended service term, you have the following options:
- Stay in Extended Service Term: Partners can keep the subscription in extended service term indefinitely. Services will continue and be billed monthly at the current monthly price plus a 3% uplift (or 23% if no monthly plan exists).
- Cancel immediately: Partners can cancel extended service term subscriptions at any time and receive a prorated refund based upon the remaining billing period.
- Upgrade to a standard subscription: Partners can choose to upgrade their EST subscription to a standard subscription at any time. When they do, the EST subscription will be cancelled immediately, and a prorated refund will be issued. A new standard subscription will begin on the day of upgrade. During the upgrade process, partners will have the flexibility to adjust seat counts or make other changes to the new standard subscription.
- Partners can also schedule their Extended Service Term (EST) to upgrade back to a standard subscription at the end of the current extended service term. In this case, no prorated refund will be issued as the extended service term was not cancelled prior to the end of its term.
10. Can a subscription be modified in extended service term state?
Once a subscription enters the extended service term (EST) state, no modifications are permitted excluding cancellation. However, customers can convert/upgrade from an extended service term subscription to a new standard subscription at any time.
11. What happens if I have an existing subscription with auto renewal already off and the term is due to end May 20th, 2026?
Microsoft will set all eligible subscriptions that meet all three of following conditions to automatically be transitioned into extended service term at their expiration:
- Purchased or renewed on or after April 1, 2025, and
- Auto-renew is set to off, and
- Expires on or after 4th May, 2026
We have now introduced an update to the end-of-term behaviour in Cloud Market. Partners who prefer not to have their services automatically converted into Extended Service Terms will have the option to change to ‘Cancel at the end of term’ before the term ends on or after 4th May, 2026.
12. How will I be able to tell if my subscription is in EST?
There are a couple of ways you will be able to tell if a subscription is in EST:
- The naming convention chosen by Microsoft will denote it is an extended service term subscription – a current example of an EST subscription is Microsoft 365 Business Basic (no Teams) – Extended Service Term
- The Subscription Management Report CSV and API have been updated to include an end of term parameter – this new setting will highlight the currently selected end of term behaviour for EST subscriptions (Renew OR Cancel at end of term)
13. What happens if I have an existing subscription with auto renewal already off and the term is due to end 4th May, 2026, and I do nothing?
As Microsoft are automatically converting all existing subscriptions with auto renew off that end on or after 4th May 2026 to Extended Service Terms (EST), then if you do nothing, at term end the subscription will move to EST and be billed to you at the Monthly Term rate + 3% (or 23% if no monthly plan exists). Within Cloud Market Cloud Market and if you prefer, you will have the option to change the end of term behaviour to instead cancel immediately at the end of term.
14. How will I be able to tell what end of term behaviour is applied to a subscription?
There are a couple of ways you will be able to check the end of term behaviour that is applied to any given subscription:
- The Subscription Management Report CSV and API have been updated to include an end of term parameter – this new setting will highlight the currently selected end of term behaviour for all subscriptions (Renew, Renew to EST, Cancel at end of term)
- Visibility from within the Cloud Market portal under the Manage Renewal service action – In the same way in which the end of term behaviour can be set, it can also be reviewed to confirm which option is applied
15. Where can I find a list of subscriptions with their renewal status?
Partners can utilise the Subscription Management Report (SMR) downloadable CSV or API which indicates the end of term status of ALL their customers’ subscriptions. This can also be seen on a customer-by-customer basis in the Cloud Market portal via the Manage Renewal service action.
16. Can extended service term subscriptions be transferred between partners?
No, EST offers are not eligible for P2P – Microsoft have confirmed there are no plans to enable P2P for EST. Partners can either:
- Target partners can purchase the new SKU the EST supports as a new subscription. The source partner can safely cancel the EST subscription. This option requires close coordination and timing.
- The recommended approach is the source partner converts the EST subscription back to the base SKU subscription. The newly created subscription can then be transferred using the partner-to-partner transfer capabilities.
Note
Business offers have a 300-seat limit. For these cases, partners should convert the EST to a regular SKU and then transfer it. Partners who cancel the EST subscription first and wait for the target partner to purchase will have the negative impact of service disruption. Most partners want to avoid service disruption unless their customers are aware.
17. Will there be any changes to the Subscription Management Report (CSV / API)?
Yes, in an effort to ensure our partners have the most accurate view of their estate, both the Subscription Management Report CSV and API have been updated to include a new end of term parameter – this new setting will highlight the currently selected end of term behaviour for all subscriptions (Renew, Renew to EST, Cancel at end of term)
18. If a subscription is cancelled at the end of the term, how long is data retained and when is service lost?
Starting 4th May, 2026, if a partner selects “cancel at end of term,” for a subscription that is eligible for EST, 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 as per Microsoft policy. 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.
19. If a subscription goes to extended service term, how long will the subscription stay in extended service term?
If the subscription has renewed to extended service term, it will remain in extended service term indefinitely unless upgraded to a standard subscription or cancelled. Once an extended service term subscription has been cancelled, it cannot convert back to the extended service term state.
20. If my subscription is currently in the extended service term state, can I schedule the cancellation of the subscription?
Yes, you can schedule the EST subscription to be cancelled at the end of the current term (via Manage Renewal service action) or cancel immediately.
21. What happens if I do not want to agree to the new Microsoft 365 Service Specific Terms?
As this is a Microsoft led enforcement if you do not want to accept the updated terms, then when enforcement occurs you will be unable to place any Microsoft orders via the Cloud Solution Provider program. The enforcement of EST’s is being applied to all eligible Commercial, Education and Non-profit license-based services across all channels (CSP, MCA-E, and Buy-Online), covering all markets. We have now introduced an update to the end-of-term behaviour in Cloud Market. Partners who prefer not to have their services automatically converted into Extended Service Terms will have the option to select ‘Cancel at the end of term’ before the term ends on or after 4th May, 2026.
22. What is the difference between the Delete and Manage Renewal service actions in Cloud Market?
- Delete: This option is only available within 168 hours (7 days) of purchase or renewal. It allows you to immediately cancel a subscription and receive a credit, but the customer will lose access right away and cannot restore it. The only exception to this rule is the newly announced Extended Service Term offers. If your standard subscription renews into an extended service term, these EST offers can be cancelled at any time.
- Manage Renewal: This option is used outside the 168-hour window to set the required end of the term behaviour – such as Renew, Cancel at end of term, or Renew to Extended Service Terms (EST). These changes take effect when the subscription reaches its end date.
23. Will users keep service access before seats are manually reassigned during renewal?
Yes. When upgrading, old services remain active so you can reassign seats. If manual reassignment is needed, users retain access to their original seats for 30 days. For example, if you cancel 10 Microsoft 365 (M365) E3 seats and increase to 20 M365 E5 seats, the E3 seats stay active for 30 days while you move users to E5. This also applies to many-to-one transitions.
24. Are there any changes to subscriptions that are not eligible for EST.
The end of term behaviour for subscriptions that are not eligible for EST remains the same. If you choose to set the end of term behaviour to cancel, the service will be removed from Cloud Market and billing will cease, Microsoft, at their discretion, continue to offer the 30-day grace period for non-eligible subscriptions.
25. How will I know if a subscription is not eligible for EST?
Subscriptions that are not eligible for extended service terms will only have two end-of-term behaviour options available within Manage Renewal. The option to ‘renew to an extended service term’ will not be one of them, the only options you will see are:
- Renew this subscription: This is the default setting for all new subscriptions, if selected it will automatically renew. This includes any scheduled changes or simply continuing as is.
- Cancel at end of Term: Selecting this option will terminate the service at the end of the term. Whilst data retention is maintained, the service cannot be recovered or reactivated.
26. How does this impact Microsoft 365 Secure?
All changes applied to M365 for EST will be replicated into the M365 Secure offering. The following outlines the impact based on the end of term behaviour selected:
- Renew this subscription: This is the default setting for all new subscriptions, if selected it will automatically renew. This includes any scheduled changes or simply continuing as is.
- Renew to Extended Service Term (EST): This option will provide continuation of service, M365 EST Secure variants are billed at the M365 Secure monthly term rate + 3% uplift. EST’s offer flexibility for making further changes and can be cancelled or upgraded to a new standard M365 Secure subscription at any time.
- Cancel at end of Term: This option will de-configure the M365 Secure bundle at the subscription expiry. The Microsoft 365 service will be immediately terminated at the end of the term. Whilst Microsoft data retention is maintained, the service cannot be recovered or reactivated. The remaining services of the bundle (Vade and Acronis) will revert to standalone billable offerings that can either be continued or cancelled separately (to avoid service impact or loss of backed up data).
27. What has changed in the Microsoft 365 Service Specific Terms (SST)?
Only minor updates have been made to reflect Microsoft’s new end-of-term behaviour outlined in the CSP Program Guide, including:
- References to the Microsoft Operating Guide have been replaced with Microsoft NCE Operating Guidance.
- Definitions and references to the Microsoft CSP Program Guide have been added to clarify its link to the Microsoft Partner Agreement (MPA), reinforcing that acceptance of the MPA includes obligations in the CSP Program Guide.
28. Do the new changes for Extended Service Terms (EST) impact individual license reductions?
No, EST simply replaces the previous free grace period after a subscription expires. It has no impact on how license reductions work. Seat reductions continue exactly as they do today, following Microsoft’s normal data‑retention process when licenses are removed.
29. All my subscriptions are Monthly term; some have auto renew turned off; does this impact them?
Monthly term subscriptions will remain unaffected until April 4th, 2026. Beginning on this date, monthly term subscriptions that meet all three specified conditions will automatically transition to Extended Service Terms (EST) upon expiration. For monthly terms, this change applies to eligible subscriptions with auto-renewal disabled on or after April 4, 2026. Subscriptions with auto-renewal turned off prior to this date will continue to expire as usual and will enter the grace period in accordance with the current policy.
Impacted subscriptions:
- Purchased or renewed on or after April 1, 2025, and
- Auto-renew is set to off, and
- Expires on or after May 4th, 2026
30. My customer has an annual subscription with auto renew off with the term due to end March 2nd, 2026; will it be impacted?
No, as the subscriptions end date is prior to the 4th of May enforcement date, it does not meet all three of the impacted criteria. This subscription will expire before the Microsoft enforcement takes place and move to the grace period as per current behaviour.
Impacted subscriptions:
- Purchased or renewed on or after April 1, 2025, and
- Auto-renew is set to off, and
- Expires on or after May 4th, 2026
31. My customer has an annual subscription with auto renew off with the term due to end May 15th, 2026; will it be impacted?
Yes, this subscription would be impacted as it meets all three of the conditions below, if no changes are made to the end of term behaviour this subscription will automatically transition to Extended Service Terms (EST) upon expiry.
Impacted subscriptions:
- Purchased or renewed on or after April 1, 2025, and
- Auto-renew is set to off, and
- Expires on or after May 4th, 2026
32. My customer purchased an annual subscription 15th May 2025, auto renew is on, will they be impacted?
No, the only impacted subscriptions are those that meet all three of conditions below. If the end of term behaviour is set to renew, they will continue to automatically renew.
Impacted subscriptions:
- Purchased or renewed on or after April 1, 2025, and
- Auto-renew is set to off, and
- Expires on or after May 4th, 2026