Microsoft to Impose Fees on Unlicensed OneDrive for Business Accounts

Key Takeaways:

• Microsoft OneDrive will automatically archive user accounts that have been unlicensed for more than 90 days.
• Organizations will incur fees for storing and reactivating these archived accounts.
• Microsoft advises IT admins to identify and manage unlicensed accounts before the new changes take effect in January 2025.

Microsoft has announced some important changes to its storage policies for unlicensed OneDrive accounts. Starting in January 2025, Microsoft OneDrive will automatically archive any user accounts that have remained unlicensed for over 90 days.

Causes and risks of unlicensed OneDrive accounts

According to Microsoft, unlicensed accounts can exist within a tenant for several reasons. For instance, these accounts are retained because they fall under a retention policy that prevents their deletion. In some cases, the user may no longer have a valid OneDrive license, such as when the license is removed, but the user isn’t deleted from Microsoft Entra ID.

Microsoft warns that unlicensed accounts can create significant security and compliance risks in enterprise environments. Additionally, these accounts could cause confusion and lead to file duplication.

Microsoft to auto-archive unlicensed OneDrive accounts in 2025

Once archived, Microsoft OneDrive users will lose access to unlicensed accounts. Administrators will be required to enable unlicensed account billing in the Microsoft 365 admin center in order to retrieve these archived files. It will be applicable to all unlicensed OneDrive accounts within the organization.

“There is a fee of $0.05/GB/month to store unlicensed accounts in the Microsoft 365 Archive, and a fee of $0.60/GB to reactivate accounts stored in the Microsoft 365 Archive. Account reactivation takes up to 24 hours and provides 30 days of access to the account, and then the account returns to an archived state,” the company explained on the Microsoft 365 Admin Center.

How to prepare for this change?

Microsoft advises IT admins to navigate to SharePoint admin center > Reports > OneDrive accounts to view a list of unlicensed accounts. This page will show the number of unlicensed accounts and the reasons why they are unlicensed. It will be available to all commercial customers globally by August 16, 2024.

Microsoft advises organizations to set up Archive billing for unlicensed accounts as well as delete any accounts that they don’t wish to retain. We invite you to check out this support page for more details on how to detect, monitor, and manage unlicensed OneDrive accounts.