Microsoft OneDrive storage—license change of January 2025

Organizations need to know that since January Microsoft's OneDrive license policy changed. When a user's OneDrive account becomes unlicensed—due to expired subscriptions, employee departure, or organizational restructuring—Microsoft enforces a specific set of actions 93 days after the removal of a license:

• Accounts with retention policies or legal holds are automatically archived. While they remain visible to administrators through administrative tools, neither admins nor end-users have access to their content until specific actions are taken.
• Accounts without retention policies or legal holds are moved to the recycle bin. If no action is taken, they are permanently deleted after an additional 93 days.

This policy, effective as of January 27, 2025, was implemented to streamline storage management and enforce data retention compliance. Organizations must proactively manage unlicensed accounts to prevent unintended data loss or access issues. It is very important for everyone who uses the Microsoft OneDrive storage of these licenses. 

For OneDrive accounts under a retention policy, retention period, or legal hold:

• After 93 days of being unlicensed, these accounts are automatically archived.
• Although visible to administrators, their content remains inaccessible to both admins and end-users.

To regain access, administrators must enable unlicensed account billing in the Microsoft 365 admin center. This incurs a storage fee of $0.05 per GB per month and a reactivation fee of $0.60 per GB. Once reactivated, access is provided for 30 days before the account returns to an archived state.

Administrators must take specific steps to effectively manage unlicensed OneDrive accounts:

• Identify Unlicensed Accounts: Use the SharePoint admin center to generate reports on unlicensed OneDrive accounts. Navigate to Reports > User reports > Unlicensed users to download the report.
• Decide on Account Management:
  • Assign Licenses: For accounts still relevant to the organization, assign appropriate Microsoft 365 licenses to maintain access.
  • Delete Unnecessary Accounts: For accounts no longer needed, proceed with deletion to avoid unnecessary storage costs and potential security risks.
• Enable Unlicensed Account Billing: To access archived accounts, set up unlicensed account billing in the Microsoft 365 admin center. This allows retrieval and management of archived data but incurs associated costs.

To avoid the complexities and costs associated with managing unlicensed OneDrive accounts, organizations can consider alternatives like ShArc.

ShArc is an innovative solution designed to optimize data management within Microsoft SharePoint. By leveraging Azure Blob storage, ShArc enables seamless archiving of data without compromising user access.

• Continuous Access: ShArc migrates data from OneDrive to SharePoint, ensuring uninterrupted access to files.
• Cost Efficiency: ShArc archives data into Azure Blob storage, which is more cost-effective than traditional OneDrive storage solutions.
• User-Friendly Experience: Users can access archived files through SharePoint's familiar interface while benefiting from Azure's secure storage infrastructure.
  
  

• Data Migration: Transfers OneDrive data to SharePoint efficiently.
• Archiving: Stores files in Azure Blob storage, reducing costs and avoiding Microsoft’s 93-day retention limitation.
• Seamless User Access: End-users continue to access archived files through SharePoint’s interface.

By adopting ShArc, organizations can maintain control over their data, reduce administrative overhead, and mitigate risks associated with Microsoft's new archival policies.

Frequently asked questions about Microsoft OneDrive storage and the changes

How to check on Microsoft OneDrive storage?

How to manage OneDrive storage?

How do I free up space in OneDrive?