M365 Changelog: (Updated) Updated Files On-Demand Settings on Windows

MC499439 – Updated February 14, 2023: Microsoft has updated the rollout timeline below. Thank you for your patience.

Microsoft has an update to the OneDrive sync app advanced settings for Files On-Demand on Windows. Previously, a toggle was shown to allow users to opt out of Files On-Demand. After this change, users who have Files On-Demand enabled will no longer see that toggle. Instead, users will see two buttons: Download files as you open them and Download all files now.

This message is associated with Microsoft 365 Roadmap ID 101520

When this will happen:

Microsoft will begin rolling out in mid-March (previously early February) and expect to complete rollout by early April (previously late February).

How this will affect your organization:

This change only affects users who have Files On-Demand enabled. There is no change at this time for users that have the feature disabled from OneDrive settings or by admin policy.

Previously, a toggle was shown to allow users to opt out of Files On-Demand. After this change, users who have Files On-Demand enabled will see two buttons:

• Download files as you open them: This is the default and recommended behavior. New files from the cloud are online-only by default, not taking up disk space. Files are downloaded to the device if a user opens them or chooses the option to “Always keep on this device” from the context menu in File Explorer. Files created on the device are available offline by default.
• Download all files now: This setting is equivalent to choosing the option to “Always keep on this device” from the context menu in File Explorer for the entire OneDrive folder. Selecting this option causes all files from the cloud to be downloaded, taking up disk space on the device. The behavior of this setting is equivalent to the legacy option of turning off Files On-Demand mode, with some improvements like updated icons.

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What you need to do to prepare:

No action is required at this time. If you have documentation that describes how to disable the Files On-Demand setting, you will need to update it. For more information, please visit this page.

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