Microsoft has introduced a significant update to how CSP subscriptions behave after their term ends: Extended Service Terms (EST). This change replaces the traditional free “grace period” model and introduces new billing, operational, and customer-experience implications that every CSP partner must understand.
This blog breaks down:
Extended Service Terms (EST) are a paid extension period that begins when a CSP subscription reaches the end of its committed term and the customer has not renewed, changed terms, or cancelled.
EST applies when:
Under EST:
This is a major shift: Microsoft is ending free post-term continuity and moving toward a formal, billed extension mechanism.
Official Microsoft source:
Use Extended Service Terms (EST) for Cloud Solution Provider (CSP) subscriptions – Microsoft Learn.
Why Did Microsoft Introduce EST?
According to Microsoft’s Partner Center documentation and recent Tech Community updates, EST is being introduced to:
Changes roll out in phases:
This is not optional; all partners must adopt EST workflows. This shift makes renewal accuracy and billing automation essential for CSP partners.
EST introduces new rules that impact CSP renewals, customer communication, billing, operations, and compliance. Here’s what partners need to know.
1. No More Free Grace Period After Subscription Expiry
Historically, customers continued to use services for free right after a subscription expired.
EST eliminates this.
If the customer doesn’t act, the subscription automatically moves into EST, and partners must bill accordingly.
This increases risk of:
2. Billing in EST Is Monthly + 3% Uplift
Even if the original subscription was annual, once it enters EST, Microsoft bills partners monthly with the uplift.
Partners must:
3. Partners Must Track New End-of-Term Options
CSP subscriptions now have three possible end-of-term outcomes:
This new logic must be managed consistently and accurately.
4. Customer Communication Becomes More Critical
EST billing may surprise customers who expect the old grace period.
Partners must:
5. Operational Complexity Goes Up Without Automation
Partners will need to track:
Manual tracking is no longer sustainable.
Work 365 is designed specifically for CSP billing automation, subscription lifecycle management, invoicing, usage billing, and Partner Center integration. EST changes perfectly align with some of the problems Work 365 already solves.
Here’s how Work 365 simplifies EST for partners.
End-of-term workflow automation
Work 365 coordinates:
No surprises. No silent transitions. No missed renewals.
c) Accurate billing and invoicing
Work 365 automatically:
This ensures partners never lose revenue.
Dunning & collections for customers
Work 365’s dunning automation:
Real-time reporting + forecasting
Work 365 gives partners visibility into:
Forecasting becomes predictable again.
Reduces compliance risk
By maintaining:
Coming Soon: Work 365 Support for Microsoft CSP Extended Service Terms
We are continuously monitoring Microsoft’s EST rollout and will introduce updates as the Partner Center APIs and billing models stabilize.
Work 365 ensures partners meet Microsoft’s evolving compliance expectations. Microsoft’s new Extended Service Terms model introduces real operational impact:
CSP partners who rely on manual processes will struggle, especially once the grace period disappears.
Work 365 gives partners the automation, accuracy, and governance needed to stay compliant, protect margins, and deliver a better customer experience under EST.
Reach out to Work 365 for Billing Health Check with our CSP Experts.