MC1216259 – Introducing New Paid Extended Service Term (EST)

Product:

Microsoft 365 admin center, Microsoft 365 suite, SharePoint

Platform:

Online, World tenant

Status:

Change type:

Admin impact

Links:

Details:

Summary:
Microsoft introduces a paid Extended Service Term (EST) replacing the automatic grace period, allowing monthly paid service extensions after subscription end. Options at term end include timely renewal, paid EST with prorated charges and no changes allowed, or cancellation with 90-day data retention. Applies to subscriptions under the Microsoft Customer Agreement starting Feb 9, 2026 (direct) and April 1, 2026 (CSP).

Details:
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 April 1, 2026 (confirm impacted subscriptions with your partner).

Change Category:
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Scope:
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Release Phase:

Created:
2026-01-10

updated:
2026-01-10

Task Type

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Docu to Check

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MS Urgency

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MS workload name

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summary for non-techies**

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Direct effects for Operations**

Service Disruption
If customers do not renew their subscription on time and do not opt for the Extended Service Term (EST), they will experience immediate service termination, leading to potential data loss and operational downtime.
   - roles: IT Administrators, End Users
   - references: https://www.microsoft.com/en-us/microsoft-365/blog/2023/10/01/introducing-paid-extended-service-term-est-for-microsoft-365/

Increased Costs
Choosing the EST option incurs a 3% higher monthly rate compared to standard rates, which may lead to budget overruns if not planned for in advance.
   - roles: Finance Managers, IT Administrators
   - references: https://www.microsoft.com/en-us/microsoft-365/blog/2023/10/01/introducing-paid-extended-service-term-est-for-microsoft-365/

Data Retention Issues
If a subscription is canceled at term end without prior renewal or EST, customer data will be retained for only 90 days before deletion, risking loss of critical information.
   - roles: Data Managers, End Users
   - references: https://www.microsoft.com/en-us/microsoft-365/blog/2023/10/01/introducing-paid-extended-service-term-est-for-microsoft-365/

Configutation Options**

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Opportunities**

Improved Subscription Management
With the introduction of the paid Extended Service Term (EST), organizations can better manage their subscription lifecycle. This allows IT administrators to maintain service continuity while evaluating the best options for renewal, thus reducing the risk of service disruption.
   - next-steps: Train IT staff on the new EST options and how to communicate these to end-users. Develop a monitoring system to track subscription end dates and initiate discussions on renewal options well in advance.
   - roles: IT Administrators, Finance Managers, Operations Managers
   - references: https://www.microsoft.com/en-us/microsoft-365/business/compare-all-microsoft-365-business-products, https://techcommunity.microsoft.com/t5/microsoft-365-blog/announcing-the-new-paid-extended-service-term-est-for/ba-p/2000000

Enhanced User Experience During Transition
The ability to extend service with a paid EST allows users to avoid abrupt service interruptions while they finalize renewal plans. This can enhance user satisfaction and trust in IT services, as users feel supported during transitions.
   - next-steps: Create user communication materials that explain the EST option clearly. Implement a feedback mechanism to gather user experiences during subscription transitions.
   - roles: End Users, IT Support Staff, Customer Service Representatives
   - references: https://www.microsoft.com/en-us/microsoft-365/business/compare-all-microsoft-365-business-products, https://techcommunity.microsoft.com/t5/microsoft-365-blog/announcing-the-new-paid-extended-service-term-est-for/ba-p/2000000

Cost Management Opportunities
Although saving costs is a minor priority, the prorated charges for the EST option allow organizations to only pay for the service they actually use, potentially leading to better budgeting and cost management for IT services.
   - next-steps: Review current subscription usage patterns to determine if the EST option can lead to cost savings. Analyze the financial impact of extending services versus renewing subscriptions outright.
   - roles: Finance Managers, IT Administrators, Procurement Officers
   - references: https://www.microsoft.com/en-us/microsoft-365/business/compare-all-microsoft-365-business-products, https://techcommunity.microsoft.com/t5/microsoft-365-blog/announcing-the-new-paid-extended-service-term-est-for/ba-p/2000000

Potentional Risks**

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IT Security**

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explanation for non-techies**

Imagine you have a gym membership that is about to expire. Previously, the gym would give you a free grace period to decide whether you wanted to renew your membership or not. Now, the gym has introduced a new option: a paid extension period. This means that instead of automatically getting extra time for free, you can choose to pay a little extra to keep using the gym while you decide what to do next.

Microsoft is doing something similar with its subscriptions. When your Microsoft 365 subscription is about to end, you used to get an automatic grace period. This grace period is being replaced with a paid Extended Service Term (EST). Just like the gym, you can now pay a bit more to keep using the service while you finalize your decision on renewing or changing your subscription.

You have three choices when your subscription ends:

1. Renew on time: This is like renewing your gym membership before it expires, ensuring no interruption in your workouts.

2. Use the paid EST: This is like paying for a temporary membership extension. You can keep using the service while you decide, but you pay a bit more, and you can't change the terms during this period.

3. Cancel: This is like deciding not to renew your gym membership. Your access ends immediately, but your locker (or data, in Microsoft's case) is kept safe for a short period before it's cleared out.

This change applies to subscriptions under the Microsoft Customer Agreement. If you buy directly from Microsoft, you'll manage this through the Microsoft Admin Center. If you buy through a partner, you'll work with them to make your choice. This new system starts in 2026, so you have time to plan how you'll handle your subscriptions when the time comes.