Microsoft Ends Free Grace Period, Changes Partner Subscription Billing

Microsoft has started the Kerberos Hardening Phase for Windows Domain Controllers, but the company is also rolling out partner billing changes that could impact subscription costs.

According to Neowin, Microsoft has introduced new billing rules tied to Extended Service Terms (EST) for partner-managed subscriptions, with enforcement beginning this week.

Microsoft Removes 90-Day Grace Period for Expired Subscriptions

Under the new rules, Microsoft has removed the long-standing 90-day free grace period after a subscription expires. Instead, expired subscriptions now move directly into Extended Service Terms, which is a paid state.

EST charges the standard monthly subscription price plus a 3% surcharge. Customers must actively cancel the subscription, or the system automatically transitions it into EST and starts monthly billing.

What Extended Service Terms Mean for Partners

Microsoft designed EST to give partners more control over what happens at the end of a subscription term. Partners can now:

• Renew subscriptions proactively
• Cancel subscriptions before expiration
• Allow subscriptions to move into a paid extended term

This approach helps prevent surprise renewals, but only if partners configure settings correctly ahead of time.

Risk of Unexpected Charges If Partners Don’t Prepare

Partners who fail to review their renewal settings may see subscriptions automatically enter EST. That scenario triggers monthly charges until someone explicitly cancels the service.

Microsoft now allows partners to check EST eligibility directly in Partner Center and adjust expiration and renewal behavior to match the new model.

What Partners Should Do Next

To avoid billing surprises, Microsoft recommends that partners:

• Audit upcoming subscription expirations
• Review renewal and cancellation settings
• Align customer agreements with the new EST billing structure

The company says these changes improve transparency and flexibility, but the added surcharge could increase costs for customers who miss renewal deadlines.

Whether this move hurts paying customers or simply encourages better subscription management remains to be seen. In other Microsoft news, the company has pushed emergency Windows updates and recently edited an ad after accidentally promoting Google Chrome.