Publish date: 26.11.25

For years, many Microsoft customers have relied on the post-expiry grace period—the short window where services continued running at no cost even after a licence had technically expired. This gave organisations extra time for approvals, budget cycles, and renewal decisions. But this is about to change.

From 1 April 2026, Microsoft is removing the free grace period and replacing it with a new paid option: the Extended Service Term (EST). This shift affects all CSP, MCA-E, and Buy-Online licence-based subscriptions, and it means customers will need to be more deliberate in how they manage renewals.

What’s Changing?

When a subscription expires with auto-renew switched off, organisations must choose one of three paths:

1. Renew the subscription
Start a new term, with the flexibility to adjust seats, billing plan, or product (where allowed).

2. Cancel at end of term
The service stops immediately at expiry.
Available from 19 January 2026.

3. Move to an Extended Service Term (EST)
EST keeps services active while next steps are finalised.

Key points:

• Billed monthly at the standard monthly rate + 3% uplift
• If no monthly plan exists, a 23% uplift applies
• Cancel anytime
• Prorated billing for days used
• Available from 1 April 2026

EST offers flexibility—but it replaces what used to be free.

 

Who Is Affected?

The new rules apply to:

• Subscriptions purchased on or after 1 April 2025
• Subscriptions expiring on or after 1 April 2026, where auto-renew is off

Older subscriptions purchased before April 2025 are not impacted.

If no action is taken, eligible subscriptions will automatically transition into EST and begin billing at the uplifted rate.

What This Means for Xeretec Customers

Xeretec will support you by:

• Reviewing renewal timelines ahead of expiry
• Helping you avoid unexpected EST charges
• Providing clear guidance on whether renewal, cancellation, or EST is the best route
• Ensuring continuous service with no surprises

Our team is ready to help you stay compliant and prepared as the new licensing model takes effect.

 

Key Points at a Glance

• Grace period ends 1 April 2026
• No free access after expiry if auto-renew is off
• EST = paid extension with a 3% or 23% uplift
• Renewal planning now requires more proactive management
• Xeretec is here to support every step

 

Need Support?

If your Microsoft licences renew after April 2026, now is the ideal time to review your approach.
Speak to Xeretec to ensure a smooth transition