Beginning in January 2025, Microsoft will start charging organizations for storage used by unlicensed OneDrive accounts. As a result, admins need to manage these accounts proactively to avoid surprise costs or potential loss of OneDrive data.
Unlicensed OneDrive accounts
An unlicensed OneDrive account occurs when:
· If we remove a user's licenses.
· If we delete the user from our organization.
After deleting a user, we have the option to decide what happens with their OneDrive files, such as granting another user access for 30 days. Even after the user is deleted, any files they shared via OneDrive will still be accessible to others.
Unlicensed OneDrive accounts will be archived 93 days after the license is removed or the user is deleted. For instance, if a OneDrive account's license is removed on August 1, 2025, it will become inaccessible on November 2, 2025.
Starting January 2025, all unlicensed OneDrive accounts will incur storage charges. If not, these accounts will be deleted after 180 days.
Note: These changes do not apply to EDU, GCC, or DoD customers.
To check how much space all licensed and unlicensed users take up in their OneDrive storage, we can Export OneDrive usage report in Microsoft 365 admin center.
Organizations have several options for managing unlicensed OneDrive users:
- Enable Microsoft 365 Archive billing to keep accounts you want to retain.
- Remove unlicensed accounts in Microsoft 365 that are no longer needed.
- Assign Microsoft 365 licenses to maintain access.
- Convert user mailboxes to shared mailboxes.
Microsoft 365 Archive Billing
If you don’t take action to this, unlicensed OneDrive accounts will be archived, which means Microsoft 365 Archive will start charging you for storage and file reactivation. This option allows you to keep the OneDrive account and its data for future retrieval.
Once the unlicensed accounts are automatically archived, you can still access their files by enabling unlicensed account billing in the Microsoft 365 admin center. When this feature is turned on, it applies to all unlicensed OneDrive accounts in your tenant. You'll incur a charge of $0.05 per GB per month for storing these archived accounts, and a fee of $0.60 per GB for reactivating them. Reactivation takes up to 24 hours and provides access to the account for 30 days before it reverts to an archived state.
To keep costs down, it's a good idea to export all unlicensed OneDrive accounts and decide which ones you want to keep. After that, review the default retention period for deleted OneDrive users and adjust it according to your needs.
Get All Unlicensed OneDrive Accounts Report
To view all the unlicensed OneDrive accounts within your organization, follow these steps:
How to Get Unlicensed OneDrive User Accounts Report
Thats it.
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