Extended Service Terms (EST): Ensuring Cybersecurity Continuity

Effective April 1, 2026, Microsoft is introducing Extended Service Terms (EST), a major update to subscription management for Microsoft 365 and Azure services. This change replaces the current free grace period for non-renewed subscriptions and aims to provide customers with greater flexibility and continuity. 

For Cloud Solution Provider (CSP) partners, EST represents a strategic opportunity to strengthen customer relationships, drive renewal upsells, and offer tailored subscription options while maintaining a strong focus on cybersecurity and service continuity.

With the evolving landscape of cyber threats, organizations must ensure that their Microsoft services remain operational even during subscription transitions. EST ensures that CSP partners and customers can maintain access to mission-critical resources, avoid downtime, and reduce the risks associated with lapsed subscriptions.

What Are Extended Service?

Extended Service are a new billing option that allows customers to continue using their Microsoft services on a monthly basis without requiring a full subscription commitment. Unlike the previous free grace period, which provided a temporary extension after subscription expiration, EST is designed to ensure uninterrupted access to Microsoft 365 and Azure services. This approach allows businesses to maintain a secure and continuous operational environment while they evaluate subscription needs or consider upgrades.

The key benefits of EST include:

• Service Continuity: Customers maintain uninterrupted access to Microsoft 365, Azure, and related services, minimizing operational disruption and protecting sensitive data.
• Flexible Billing: Subscriptions on EST are billed monthly at the current monthly term price plus a 3% uplift (or 23% if no monthly plan exists), giving organizations financial flexibility without committing to a long-term contract.
• No Full Subscription Commitment: EST allows businesses to continue services temporarily without being locked into a full renewal, which is particularly useful for managing cybersecurity risks, compliance requirements, or seasonal workload fluctuations.

By leveraging EST, organizations can maintain secure access control, ensure uninterrupted authentication and endpoint security, and mitigate the risk of data breaches during transitional periods. These factors are critical to maintaining a robust cybersecurity strategy in today’s fast-changing threat landscape.

Eligibility and Scope of EST

The Extended Service Terms apply to license-based services across all channels, including CSP, Microsoft Customer Agreement – Enterprise (MCA-E), and Buy-Online, covering all markets and term lengths—monthly, annual, and triennial. However, some subscriptions are excluded from EST:

Included:

• Subscriptions purchased on or after April 1, 2025.
• Subscriptions expiring on or after April 1, 2026.
• Subscriptions with auto-renew set to off.

Excluded:

• Software subscriptions and perpetual licenses.
• Azure Reservations.
• Third-party offers and Azure Savings Plans.

Subscriptions purchased before April 1, 2025, will not be affected by EST. CSP partners should carefully review eligibility to ensure all customers are informed about their options.

How EST Works: Billing and Flexibility

Under EST, customers no longer enter a free grace period after a subscription expires. Instead, they have the following options:

1. Renew to a New Term: Continue the subscription with or without modifications.
2. Cancel at End of Term: Services end immediately, which requires careful attention to business continuity planning to avoid downtime or loss of access to critical resources.
3. Move to EST: Continue service on a monthly basis with billing at the current monthly term price plus a small uplift.

Once a subscription enters EST, customers can:

• Remain in EST and renew monthly.
• Cancel the EST subscription at any time and receive a prorated refund.
• Convert to a standard paid subscription (with or without changes) with a prorated refund applied.

This approach ensures operational flexibility while maintaining compliance, data security, and continuous access control across Microsoft services.

Opportunities for CSP Partners

1. Drive Upsell Motions During Renewal Conversations

CSP partners can leverage EST to promote higher-value subscriptions, including Microsoft 365 E5 or Azure Premium services. By showcasing advanced security capabilities—such as protection against ransomware, phishing attacks, and evolving cybersecurity threats—partners can create compelling business cases for upgrades. EST provides a low-risk path for customers to continue accessing their services, making it an ideal moment for targeted upsell campaigns.

2. Educate Customers Early to Avoid Disruption

Proactive communication about EST ensures customers understand their choices and reduces the likelihood of service interruptions. Highlighting the security measures included in Microsoft 365 and Azure—such as threat detection, endpoint security, and incident response—can reassure customers about continuity and compliance with internal and regulatory requirements.

3. Maintain Engagement and Encourage Conversion to Full Subscriptions

CSP partners should monitor subscriptions on EST and offer tailored recommendations for conversion to full subscriptions. Regular check-ins and demonstrations of Microsoft security features, business continuity planning, and productivity enhancements strengthen trust and encourage long-term commitment.

Preparing for EST: Technical and Operational Considerations

To effectively manage the transition to EST, partners need to focus on technical and operational preparedness:

• Updates to Partner Center Insights: Familiarize yourself with new EST options in dashboards to track renewal statuses and manage subscription transitions.
• API Changes: Ensure systems are updated to accommodate the new end-of-term subscription handling.
• Renewal Dashboards: Use the dashboards to monitor eligible subscriptions and plan targeted engagement campaigns.
• Early Preparation: Inform customers early to help them make timely decisions and avoid disruptions in business operations or cybersecurity management.

Key Dates for EST Rollout:

• November 3, 2025: Sandbox testing for new subscriptions.
• January 19, 2026: Manage renewal options for all eligible subscriptions.
• February 1, 2026: EST SKUs available in price list previews.
• April 1, 2026: EST enforced for eligible subscriptions.

Benefits of EST for Cybersecurity and Business Continuity

Implementing EST ensures that organizations maintain access to critical security capabilities during transitional periods. Some key benefits include:

• Continuous Protection Against Cyberattacks: EST ensures ongoing access to Microsoft security solutions, protecting against malware, social engineering, and emerging cyber threats.
• Reduced Risk of Data Breaches: By avoiding gaps in subscription coverage, organizations minimize exposure to unauthorized access and vulnerabilities.
• Business Continuity and Risk Management: EST supports incident response readiness and ensures critical IT systems remain operational, reducing potential financial loss and operational disruption.

CSP partners can position EST as a strategic tool to help organizations manage cyber risks, strengthen their cybersecurity strategy, and maintain peace of mind in the face of evolving cybercriminal activity.

Tips for Communicating EST to Customers

1. Frame EST as a Value-Added Option: Highlight continuity, flexibility, and optional upgrade paths.
2. Emphasize Security and Risk Mitigation: Explain how EST protects against downtime, ransomware, and other cybersecurity threats.
3. Position Partners as Trusted Advisors: Provide guidance on subscription choices, renewals, and security measures.

By presenting EST as both a flexible and secure option, CSP partners can reinforce their role as strategic advisors, enhancing customer loyalty and satisfaction.

Leveraging EST for Long-Term Business Growth

EST not only supports service continuity and cybersecurity but also creates opportunities for partners to grow their business:

• Upsell Higher-Tier Plans: Introduce Microsoft Defender Suite, Microsoft Purview Suite, or Azure premium features.
• Bundle Security Solutions: Offer customers comprehensive protection that includes firewalls, advanced threat protection, and security awareness training.
• Promote Proactive Cybersecurity Measures: Educate clients on risk assessment, threat intelligence, and data protection practices.

By integrating EST into customer conversations, CSP partners can enhance both financial outcomes and cybersecurity posture, ensuring long-term satisfaction and trust.

Conclusion

The introduction of Microsoft Extended Service Terms is a game-changer for subscription management in Microsoft 365 and Azure. It ensures continuity, flexibility, and robust cybersecurity while providing CSP partners with strategic opportunities for upsells and customer engagement. By understanding eligibility, preparing early, and communicating effectively, partners can help customers maintain uninterrupted service, protect sensitive data, and strengthen their overall cybersecurity strategy.

CSP partners should review eligible subscriptions, plan renewal conversations, and leverage EST to maximize business growth while ensuring that customers remain protected from cyber threats and service interruptions. By positioning EST as both a value-added option and a cybersecurity safeguard, partners can solidify their role as trusted advisors in an increasingly complex IT landscape.

For more information and to optimize your Microsoft 365 subscriptions, explore our Microsoft 365 Managed Services.