Summary
Microsoft Product Terms Update: April 2026
Microsoft's April 2026 Product Terms update, effective 1 April 2026, covers four products: SQL Server and Windows Server subscription rights, Windows 10 Long Term Servicing Branch (LTSB) 2016 Extended Security Updates, Azure AI content safety controls, and Teams recording notification liability.
SQL Server and Windows Server subscription SA-equivalent rights consolidated from the separate "Server Subscriptions for Azure" section into each product's own Software Assurance (SA) benefits table
Windows 10 Enterprise LTSB 2016 ESU terms added, ahead of the end of support on 13 October 2026
Azure Limited Access Services list expanded to require registration for modifying guardrails for high-risk content in Azure Direct Models
Teams Product Terms now state that customers who disable recording or transcription notifications assume full legal liability for compliance with applicable laws
SQL Server and Windows Server: Subscription Rights Consolidated
Microsoft has consolidated the subscription licence terms for SQL Server and Windows Server that were previously buried in a separate "Server Subscriptions for Azure" section of the Microsoft Customer Agreement (MCA) Product Terms.
Until now, MCA subscription customers for these products were directed to a separate section of the Product Terms called "Server Subscriptions for Azure". The SQL Server Availability section opened with a note stating that subscription licences purchased through MCA were "subject to different terms as set forth in the Server Subscriptions for Azure". Windows Server had an identical redirect. In practice, the redirect meant subscription customers had to cross-reference a different part of the document to understand their rights, and the relationship between those rights and SA benefits was not clearly stated.
Microsoft has eliminated the redirect. The separate "Server Subscriptions for Azure" terms have been folded into the main product entries for both SQL Server and Windows Server. The SA-equivalence statement that previously lived in the "Server Subscriptions for Azure" section now appears directly in each product's SA benefits section:
The changes apply to both MCA and Enterprise Agreement (EA) / Enterprise Agreement Subscription (EAS) Product Terms. EA is the traditional perpetual-licence agreement; EAS is its subscription-based counterpart.
What Moved Where
The "Server Subscriptions for Azure" section already granted subscription customers SA-equivalent rights for Extended Security Updates, Windows Server Annual Channel for Containers, Self-Hosting, and Disaster Recovery. These rights have not changed. What has changed is that they now appear in each product's own SA benefits table rather than in a separate section.
SQL Server
For SQL Server, the MCA terms now include an SA benefits table. The key entries are:
Disaster Recovery for all editions, including fail-over rights allowing one fail-over Operating System Environment (OSE) for any purpose (including high availability) and two fail-over OSEs for disaster recovery, per primary workload
License Mobility for all editions except Parallel Data Warehouse, which allows reassignment of licences to shared servers in a server farm
Self-hosting for all editions
Windows Server
For Windows Server, the MCA terms now include an SA section (previously absent from the product entry itself) listing:
The April rewrite is structural, not substantive. SQL Server and Windows Server subscription customers receive the same SA-equivalent rights they had before; Microsoft has simply stopped routing them through a separate "Server Subscriptions for Azure" section.
Disaster Recovery for all editions
License Mobility for External Connector only
Self-Hosting for all editions except Essentials
Windows 10 Enterprise LTSB 2016 Extended Security Updates
Microsoft has added a new Extended Security Updates (ESU) section for Windows 10 Enterprise LTSB 2016 to the Windows Desktop Operating System Product Terms, in both MCA and EA/EAS.
LTSB stands for Long Term Servicing Branch, the predecessor to what Microsoft now calls LTSC (Long Term Servicing Channel). Windows 10 Enterprise LTSB 2016 was released in August 2016 and is a fixed-function build of Windows 10 designed for devices that should not receive feature updates, such as medical equipment, industrial control systems, point-of-sale terminals, and ATMs.
Unlike mainstream Windows 10, which reached end of support in October 2025, LTSB 2016 reaches end of support on 13 October 2026. After that date, devices without an ESU licence will no longer be entitled to receive security updates.
Licensing Structure
The new ESU section uses a per-device, cumulative, three-year schedule. Microsoft previously used the same approach for Windows 10 ESU and Windows 7 ESU (Windows 7 ended support in January 2020 and had a three-year ESU programme through January 2023). The LTSB 2016 ESU terms are:
Per device licensing. Each device running or accessing an Operating System Environment (OSE) covered by ESU must be licensed.
Three years available. ESU is offered as Year 1, Year 2, and Year 3.
Cumulative requirement. Year 2 may only be assigned to devices also licensed with Year 1. Year 3 requires both prior years. (Product Terms)
Pricing. Microsoft has published Year 1 pricing at $61 per device, or $45 per device for organisations using Intune or Windows Autopatch (Microsoft's managed update service). The price doubles each consecutive year.
Budget Impact
Applying the published Year 1 price and doubling rule to a fleet of 500 devices gives a calculated cost of $30,500 in Year 1 ($61 per device), $61,000 in Year 2 ($122 per device), and $122,000 in Year 3 ($244 per device), totalling $213,500 over three years.
Microsoft used the same per-device, cumulative, doubling-price ESU schedule for Windows 7 and Windows 10. The April update slots LTSB 2016 into that established template. Industrial, medical, and point-of-sale fleets still running 2016 builds face the familiar Year 1 to Year 3 price doubling.
With the Intune/Autopatch discount, the calculated three-year total is $157,500 ($45 in Year 1, $90 in Year 2, $180 in Year 3). Microsoft has not published Year 2 and Year 3 prices for either pricing level; the Year 2 and Year 3 figures above are calculated by applying the doubling rule to the published Year 1 prices, and it is not confirmed whether the doubling applies to the Intune/Autopatch discounted price.
Azure Limited Access Services: Guardrails for High-Risk Content
Microsoft has expanded the Limited Access Services list for Azure AI Services. The existing entry for "Azure Direct Models (Modified Content Filtering/Abuse Monitoring)" now reads "Azure Direct Models (Modified Content Filtering/Abuse Monitoring/Guardrails for High-Risk Content)".
Limited Access Services are a gating mechanism Microsoft introduced for Azure AI features it considers sensitive. Customers must apply through a registration form, and access is currently restricted to customers managed by Microsoft account teams.
What Changed
Azure Direct Models are third-party AI models that Microsoft hosts and serves directly from Azure infrastructure (as opposed to models customers deploy themselves), from providers such as Meta, xAI, Black Forest Labs, and Mistral, whose licensing terms were detailed in the January 2026 Product Terms update. These models ship with default content safety guardrails. Content filtering blocks harmful outputs (violence, hate speech, sexual content); abuse monitoring detects patterns of misuse across a customer's usage. Previously, customers who wanted to modify either of these protections had to obtain Limited Access approval. The April update extends the same requirement to customers who want to modify the default guardrails for high-risk content.
The Product Terms do not define the distinction between "content filtering", "abuse monitoring", and "guardrails for high-risk content".
The addition of guardrails is confirmed in both the MCA and the EA/EAS Product Terms.
Teams: Recording and Transcription Notification Liability
Microsoft has added a new paragraph to the Notices section of the Microsoft Teams Service Specific Terms, in both MCA and EA/EAS.
The previous text stated only that the H.264/AVC Notice applies. The new text adds a detailed clause about recording and transcription notifications, centred on what happens when customers modify the default behaviour.
The paragraph concludes with a full disclaimer of liability, stating "Microsoft disclaims any and all liability arising from your failure to provide such notification."
Liability Shift to the Customer
Teams displays visual and audio notifications to all participants when recording or transcription starts. The April Product Terms clause applies specifically when organisations choose to disable, modify, or replace those default notifications.
Recording consent requirements vary by jurisdiction. Some require all-party consent, meaning every participant must be informed and agree before recording can begin. Others require only single-party consent, meaning the person initiating the recording does not need to notify others. The Product Terms do not specify which laws apply; they place the obligation on the customer to comply with whichever laws are relevant to their operations.
Who Should Pay Attention
The full text of the new clause also references Azure Communication Services (ACS), Microsoft's developer platform for voice, video, chat, and SMS, via its Application Programming Interface (API): "Microsoft will indicate to you via the Azure Communication Services API that recording or transcription has commenced and you must communicate this fact, in real time, to your users within your application's user interface." The ACS refers to organisations building custom applications on top of Teams infrastructure, such as contact centre platforms, telehealth applications, or custom meeting experiences.
Admin policies, custom apps, and third-party integrations that modify the standard Teams notification behaviour also fall within the clause's scope.
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