Microsoft Renewals and Extended Service Terms
Microsoft has recently changed how subscription-based licensing renewals are handled. Previously, if auto-renew was turned off on a subscription, there was a grace period at the end of the term. That grace period has now been removed.
This means that if a subscription reaches its expiry date and has not been set to Cancel at end of term, Microsoft may automatically switch it over to an Extended Service Term (EST) to avoid interruption to service.
What is an Extended Service Term (EST)?
An Extended Service Term is a paid month-to-month continuation of a subscription after its original term has ended. It allows services to remain active, but at a higher cost than the original term.
Things to know
- EST applies to subscription-based licensing
- EST is billed at the standard monthly subscription rate, plus a 3% uplift
- EST is not a grace period, it is a billable continuation of service
- Subscriptions on an EST can still be upgraded, converted or cancelled
Why this matters
If subscriptions are not reviewed before expiry, organisations may face:
- increases in monthly licensing costs
- avoidable budget pressure
- continued services that were intended to end or be reviewed first
Recommended action
We recommend reviewing upcoming Microsoft subscription renewals to confirm whether each service should be:
- renewed as planned
- changed to a different licence or term
- cancelled at end of term
If you would like support reviewing your Microsoft licensing position or upcoming renewals, our team can help.
