TL;DR – Microsoft will end the current renewal model starting April 1, 2026, with enforcement in the CSP channel from May 4, 2026.

Until now, expired Microsoft 365 subscriptions could enter a short “free grace” period. From Q2 2026, they will automatically switch to paid monthly billing instead.

This change will impact hosting providers that resell Microsoft 365, like GoDaddy, listed as a Microsoft Cloud Solution Provider (CSP).

What exactly changes in April and May 2026

Until now:
If auto-renew was turned off and the subscription reached its end date, it entered a short free period. Services continued, but Microsoft did not immediately move it to paid monthly billing. That gave partners time to cancel or renew without extra charges at higher rates.

From April / May 2026:
There is no free period after the end date. If the subscription is not cancelled before it expires, it automatically switches to paid monthly billing under Extended Service Term.

So the change is not “Microsoft keeps charging anyway”, but that the free buffer after expiration is removed.

Under new EST (Extended Service Term), the subscription switches to monthly billing at a higher rate. Payingmonth-to-month instead of yearly can cost about 23% more over the same 12-month period.



Timeline details and operational implications

Although Extended Service Term becomes effective for expiring subscriptions from April 1, 2026, May 4, 2026 is the key date for hosting providers.
That is when Microsoft begins enforcing the EST rules in the Cloud Solution Provider (CSP) program.

The change does not alter product availability only modifies renewal mechanics.

Hosting providers operating at scale must now ensure seat adjustments or cancellations are processed before subscription expiration to avoid automatic transition into EST billing.

Sources:
1. Microsoft Learn – Extended Service Term documentation.
2. Microsoft Partner Center Announcement (February 2026 update).