Microsoft is discontinuing the Grace Period on its Subscriptions.  Many counted on that extra time for procurement to process a P.O, or for budget approvals to be processed.  Options now are to turn “On” auto renewal, or ensure your agreement us renewed by your anniversary date.

The first seems easiest, but it limits the changes you can make if renewal processed before you proceed with any changes.  Also, if you pass your renewal date,  Microsoft will charge additional fees for the month or months it takes to process your renewal.

The second option  requires IT staff or your MS Partner to provide good management of licensing.   LicenseMySoftware recommends 30 days prior to renewal to address any discussions or hurdles tied to annual renewals.

 

In summary below is an overview of Microsoft’s statement.

⚠️Important Update: Extended Service Terms (EST)

Starting May 4, 2026 Microsoft is introducing Extended Service Terms (EST) and discontinuing the free grace period for non-renewed subscriptions.

What’s Changing?    The free grace period oafter subscription expiration will no longer be available.  If a subscription Auto-Renewal is turned OFF and will not be renewed at end of term, partners/clients must choose one of the following options:

✅ Your End-of-Term Options

1. Renew the subscription- Turn on Auto-Renewal  — Continue service as is or apply scheduled changes

2. Migrate to Extended Service Term (EST) – Default if Auto -Renewal is OFF

Continue service while:

Billed monthly at current monthly term rate +3% uplift

If no monthly plan exists, billed at +23% uplift

Allows renewal, upgrade or cancellation at any time

3. Cancel at expiration

Service stops immediately at end of term.  Data retention policies apply, but services cannot be reactivated.

Why EST?

Extended Service Terms provide additional time to:

Finalize customer intent

Manage upgrades or changes

Avoid service interruption

EST subscription are monthly and can be cancelled anytime

This added flexibility comes at 3% premium above the monthly license rate ensuring uninterrupted service while decisions are being made.

Please review upcoming renewals carefully and discuss end of term