On May 4 2026, Microsoft is making a significant change to how CSP subscriptions behave at end-of-term. That change removes the grace period that gave partners and customers breathing room after a subscription expired. In its place come three distinct end-of-term outcomes. Understanding the difference between them, and choosing deliberately, is now a core part of managing your customers' subscriptions.
This post gives you clear guidance on understanding these new policies, communicating the changes to customers, and adapting business strategies to keep succeeding in partnership with SoftwareOne.
Until now, if a subscription wasn't renewed when its term ended, the service kept running for 30 days giving partners and customers time to decide what to do next. That window is closing. From May 4, every subscription that reaches end-of-term will go one of three ways: Renew, Cancel, or enter an Extended Service Term (EST).
There will no longer be a free buffer while you figure out your next move.
Preparations for this change have already started at Microsoft. Subscriptions previously set to "auto-renew off" have been converting to "renew to EST" since February 6. Nothing changes before May 4, but the process is already well underway.
The three outcomes you will face need careful consideration. “Renew” works exactly as it always has. “Cancel” stops the service the moment the term expires. “EST” continues the service day-by-day at a billing premium, billed day-by-day at the monthly rate plus a 3% uplift or potentially up to 23% higher where no monthly plan exists. It's not designed as a long-term arrangement. But as a short-term bridge giving partners time to finalize renewal decisions or manage customer conversations without pressure it does what the old grace period used to do, at a modest cost. Use it deliberately and move on.
Of the three, “Cancel” is the one that demands the most care. It's not the same as simply not renewing. Under the old model, letting a subscription lapse gave you 30 days. Under the new model, “Cancel” means the service goes dark the moment the term ends. Microsoft retains the data for 90 days which means that purchasing a new license within that window can restore access. But in the meantime, users lose the service entirely. If that service is email, even reaching support becomes a problem. That's a materially different outcome and one worth making sure your team fully understands before May 4.
The takeaway: “Cancel” should now only be used when a service genuinely needs to stop at end-of-term. In almost every other situation, EST is the safer choice.
When explaining these changes to customers, keep it clear and straightforward. Start the conversation early, well before a subscription reaches end-of-term and walk through the new options in plain language. The key thing is to make it clear that doing nothing is no longer a safe default: it can mean services switches off or temporary loss of access. Flag up the Extended Service Term (EST) as a short-term safety nety and be open about the consequences of each option.
Customers will value your honesty and choose what works best for their business.
SoftwareOne is aligning Cloud-iQ with Microsoft's default: EST. From March 4, you can configure the new renewal options directly in the platform. From March 18, EST status will be visible across the subscription overview and available exports. A new bulk configuration tool will also let you set multiple subscriptions to "cancel at end-of-term" in one action so you don’t have to update each subscription individually. Just like CloudiQ, PRISM partners have the flexibility to turn off EST directly from the Manage Subscription screen. EST SKUs will be added to PRISM as hidden items, accessible only within the Manage Subscription page for eligible services. EST services will be billed separately from other offerings using the Recon billing method. For partners still on Legacy billing, all EST usage will also be processed through Recon. Naturally, your account manager and support team will be able to help you while these improvements are being rolled out.
All subscriptions that had previously been set to Auto renewal OFF are set to cancel at expiration. Customers will be able to self-service the renewal from April 8 when EST capabilities have been released in-platform. All subscriptions with auto-renewal ON renews to new term as expected.
The key is to take deliberate action before May 4. Review your customers' upcoming end-of-term dates. Decide which subscriptions should renew, which should enter EST, and which should cancel.
Speak to your SoftwareOne contact if you need guidance working through this important change.
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We're Microsoft experts. Ask us about what you want from Cloud_iQ and we'll get right back to you.
