Extended Service Terms (EST)

Starting May 4, 2026, Microsoft is replacing the standard free thirty (30)-day Grace Period for Expired Subscriptions with a paid Extended Service Term (EST). This new policy applies to license-based services purchased on or after April 1, 2025 and an expiration date on or after May 4, 2026 where auto-renewal is disabled.

Policy Overview

Under this new Microsoft policy, active subscriptions without a scheduled cancellation will automatically transition into a pre-paid, renewing, non-committed monthly Extended Service Terms (EST) subscription upon expiration. This transition includes a price uplift, unless a special additional request is made to cancel the subscription at the end of the term without EST.

Extended Service Terms ensure service continuity but incur a price uplift:

• Standard Uplift: 3% increase over the monthly current term rate.

• Exception Uplift: 23% increase if no corresponding monthly plan exists for the subscription.

Eligibility Matrix

Scope

• In-Scope: Microsoft 365 offers/subscriptions in Commercial, Education, Nonprofit and Government sectors.

• Out-of- Scope: Perpetual Software, Software Subscription, Azure and Azure RI.

CloudBlue Platform behavior

CloudBlue will not support EST in the initial release. To prevent unexpected charges, starting January 19, 2026, the CloudBlue connector will ensure that eligible subscriptions are canceled immediately upon expiration when auto-renewal is disabled.

• This behavior applies whenever a scheduled cancellation is set on an active subscription.

Note: Canceling within the 168-hour (7-day) cancellation window also prevents a subscription from being locked into an Extended Service Term (EST). In this case, the service stops immediately upon the moment of cancellation.

Technical Specification: Subscription Auto-Renewal and ActionType

With the introduction of Extended Service Terms (EST), Microsoft has changed how "Disabled" auto-renewals are handled. To maintain consistent behavior and avoid unintended charges, the logic is defined as follows:

For example:

{
  "autoRenewEnabled": false,
  "scheduledActions": [

    {

      "scheduleType": "TermEnd",

      "actionType": "Cancel"

    }

  ]

}

The ActionType parameter is now mandatory whenever auto-renewal is set to False.

• Microsoft Default Risk: If auto-renewal is set to False but the ActionType is omitted, Microsoft will default the subscription to ExtendedServiceTerms.

• Processor Constraint: The CloudBlue connector must ensure that every "Disable Auto-Renew" request explicitly includes an ActionType. To prevent unintended EST activation, the connector will default to Cancel.

• Partner API Note: Partners who bypass the UI to invoke APIs directly must be alerted that calls failing to include ActionType will result in Microsoft opting the customer into EST by default.

Microsoft and CloudBlue: Handling Extended Service Terms (EST) Backfill

By February 15, 2026, Microsoft will complete an Extended Service Terms (EST) backfill. This process sets a default preference for all active subscriptions with auto-renew disabled (i.e. scheduled cancellation) to transition to Extended Service Terms instead of canceling.

To maintain your expected workflows, CloudBlue will attempt to reverse this change with a separate backfill script that resets the default preference back to cancel:

• Function: Scans all existing production subscriptions where auto-renewal is disabled.

• Action: Explicitly sets the ActionType to Cancel.

• Outcome: Ensures that historical customer choices are honored and subscriptions expire as originally intended.

We will provide further announcements when this backfill script is deployed into production. These updates will help you determine the cut-off date for subscriptions following either the Microsoft or CloudBlue behavior.

Recommendations and Known Limitations

Even with these automated adjustments, CloudBlue recommends the following:

• Manual Inspection: Review the true status of all subscriptions set to expire soon as they approach the EST transition period.

• EST Support: CloudBlue does not currently support the activation of Extended Service Terms.

• Manual Opt-in: While you can opt-in manually via the Microsoft Partner Center (MSPC), doing so will create an unrecoverable lack of subscription parity between the Microsoft and CloudBlue platforms.

Planned Updates for Extended Service Terms in CloudBlue SaaS (Shared and Dedicated)

• For users of CloudBlue Commerce in CB SaaS (shared and dedicated), we intend in the future to implement a method for you to voluntarily opt-in to use extended service terms (EST) on a subscription-by-subscription basis, and to manage how a subscription will exit from extended service terms (EST).

• For non-Commerce marketplace users, the following functions will be available for you to access via the connect processor.

Recommended Action Items for Partners

• Identify At-Risk Subscriptions: Use the Reporting and Data Export component in CloudBlue Commerce to pull reports on subscriptions purchased after April 1, 2025, that have auto-renewal disabled and expire on or after May 4, 2026.

• Early Engagement: Start the renewal conversations with your customer earlier than usual before expiration since there will no longer be a free grace period to chase down late payments.

• Customer Communication: Inform customers that Microsoft has removed the free grace period. Emphasize that services will terminate immediately on the expiration date unless the subscription is renewed at their expense with a price uplift.

• Proactive settings management: Once CloudBlue has fully deployed the first phase of Extended Service Terms (EST), partners will have two primary paths to manage their subscriptions. You can continue using the platform as usual by selecting the configuration that aligns with your customer's intent:

  • Standard Renewal (AutoRenew = Enabled): Ensures the subscription automatically renews for a new commitment term at the current Microsoft pricing.

  • Intentional Cancellation (AutoRenew = Disabled): Ensures the subscription is canceled at the end of the term and prevents it from transitioning into Extended Service Terms (EST).

  In the future, CloudBlue may introduce an ability for you to voluntarily opt-in to Extended Service Terms (EST) on a subscription-by-subscription basis, and manage how a Subscription exits from Extended Service Terms (EST).

For additional information, read the FAQs.