File level archiving and version trimming will be available in March 2026 for Microsoft 365. Microsoft continues to expand its storage management capabilities for SharePoint and OneDrive. Two recently introduced features are file level archiving and version trimming, designed to help organizations reduce storage consumption without deleting valuable data.
For organizations managing millions of files across Microsoft 365, controlling storage growth has become a major challenge. SharePoint storage costs can rise quickly, especially when older files and excessive file versions accumulate over time. The new Microsoft features are an important step forward but they also introduce limitations that organizations should understand before relying on them for large-scale storage optimization.
In this article, we take a closer look at how file level archiving and version timming work, what benefits they bring, and where their limitations lie.
File level archiving allows users to archive individual files in SharePoint and OneDrive instead of deleting them. The archived file remains part of the site but is moved into an archived state. The idea behind this feature is simple: organizations can keep rarely used data without allowing it to actively consume high-performance SharePoint storage. Archived files remain discoverable and can be restored when needed.
From the user perspective, archiving is straightforward:
a user right-clicks a file
selects Archive
the file enters the archived state
When needed, the file can later be restored to its original location. This approach is designed to help organizations manage growing storage volumes without forcing users to permanently delete data.
Another major storage driver in SharePoint environments is file versioning. When versioning is enabled in document libraries, SharePoint automatically stores previous versions of a file. While this is extremely useful for collaboration and compliance, it can dramatically increase storage consumption. Version trimming allows organizations to reduce this footprint by automatically removing older file versions.
With version trimming, administrators can:
limit the number of stored versions
automatically remove older versions
reduce storage consumption without deleting the latest file
For many tenants, version history accounts for a surprisingly large portion of storage usage, making this feature a valuable addition.
While File Level Archiving sounds promising, the current implementation has an important limitation. At the moment, archiving must be initiated manually by end users. Admins can activate or deactivate the feature side- and tenant-based. A policy-based automation is planned.
This means:
uers must identify files that should be archived
users must manually trigger the archiving process
zhere is no automated filtering mechanism yet
From an IT perspective, this creates a scalability challenge. Most organizations manage millions of files across thousands of sites and libraries. Expecting end users to actively clean up data at this scale is unrealistic. Even when organizations encourage users to archive old content, adoption tends to be very low.
Another major limitation is the lack of administrative control. Currently, administrators cannot create policies to automatically archive files based on criteria such as:
last access date
file age
file type
storage consumption
library or site rules
multiple sites
multiple libraries
or across the entire tenant
Without automated filtering or policies, organizations lack a way to systematically identify and archive large amounts of inactive data.
Microsoft is aware of this limitation and plans to introduce administrative policies in a future update. According to Trent Green, Product Manager for SharePoint and OneDrive, the current preview focuses on manual archiving, while admin-driven policies are the next major step.
These policies are expected to enable:
automated archiving
large-scale deployment across organizations
rule-based identification of inactive files
The primary scenario Microsoft aims to support is archiving files based on last access date, which would allow organizations to manage millions of files more efficiently. While no exact release date has been confirmed, Microsoft indicated that policy-based archiving could arrive later this year.
This applies to both:
the site storage
the tenant storage quota
Archived files no longer consume active SharePoint storage quota, but they are stored in Microsoft 365 Archive storage, which is billed separately. For organizations that simply want to retain data in a colder storage tier, this may still be useful. However, it does not solve one of the most common challenges organizations face: running out of SharePoint storage capacity.
Consider the following real-world scenario. An organization’s SharePoint tenant has reached its storage limit. To prepare for a migration from an on-premises system, the organization archives 1 TB of old data. The expectation might be that this frees 1 TB of space for the migration. However, because archived files still count toward tenant storage, the tenant remains at full capacity.
If the organization now wants to migrate 1 TB of new files, it would exceed the storage quota and still need to purchase additional SharePoint storage. For many organizations migrating legacy data to Microsoft 365, this makes the feature less useful for storage optimization.
Another operational limitation concerns the reactivation of archived files. Depending on the archive state, restoring content can take from minutes up to 24 hours. During this time, the file remains unavailable to users.
From a user perspective, restoring a file works as follows:
the user right-clicks the archived file
selects Restore
the file is reactivated
Typically, the file will reappear in the same location where it existed before archiving. However, Microsoft warns that users should expect delays depending on the duration of the archived state. For organizations where quick file access is critical, these restore delays may impact usability.
Solutions like ShArc were designed specifically to address storage growth in Microsoft 365 environments. Instead of simply changing the state of a file within SharePoint, ShArc allows organizations to archive files from SharePoint storage entirely while maintaining access through SharePoint. This provides several advantages:
Real storage reduction
Archived files no longer count toward SharePoint tenant storage. They are stored in Azure Blob Storage, which is cheaper than Microsoft Archive.
Automated policies
Administrators can define filters and policies to identify files across:
Large-scale archiving
Millions of files can be identified and archived automatically.
Fast file access
Files remain accessible without long restore delays. This makes the approach particularly useful for organizations facing storage limits or preparing large data migrations into Microsoft 365.