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Understand Why Unlicensed OneDrive Accounts Exist
At the end of July, I reported Microsoft’s plan to charge for unlicensed OneDrive for Business accounts. The idea is simple. Ninety days after a OneDrive for Business account enters an unlicensed state, SharePoint Online will move the account into Microsoft 365 Archive. The tenant must then decide what to do with the accounts with the options being to manage the accounts or leave accounts to rot in the archive. Unlicensed accounts arise when an account no longer has access to a service plan for OneDrive (see the product names and service plans reference). Usually, an account enters the unlicensed state for OneDrive when an administrator deletes an account or removes a license like Office 365 E3 or E5 from the account.
Managing accounts requires the tenant to link Microsoft 365 Archive to an Azure subscription to pay for ongoing storage and restore operations. Storage costs $0.05 per month per gigabyte while retrieval costs $0.60 per gigabyte. Restored accounts remain accessible for 30 days. During this time, someone has to review the material in the account and move it to another repository, such as a different OneDrive for Business account or a SharePoint Online site. Once the 30-day period lapses, SharePoint Online archives the account again.
The OneDrive Report
So good, so far. Archiving old OneDrive accounts that clutter up storage is a good idea. It stops artificial intelligence tools like Copilot for Microsoft 365 using the content held in the obsolete accounts in its response to users and helps to better manage information belonging to ex-employees.
When Microsoft issued MC836942 on July 26, they said that by August 16, 2024, SharePoint administrators would be able to access a new report detailing unlicensed OneDrive for Business accounts. The OneDrive report should now be available through the Reports section of the SharePoint admin center in all tenants (Figure 1).
Note the warning that if accounts are left in Microsoft 365 Archive for more than 180 days after becoming unlicensed and the tenant does not take out an Azure subscription to pay for the Microsoft 365 Archive storage costs, SharePoint Online can delete the accounts. No documentation is currently available to cover this point, but it seems reasonable that Microsoft should remove old and unwanted OneDrive accounts if the owning tenant is unwilling to pay the storage costs to keep them in the archive.
Four Categories of Unlicensed OneDrive Accounts
Unlicensed OneDrive accounts fall into four categories:
- Retention period: The owning account is unlicensed but SharePoint Online has retained the OneDrive account because the retention period configured in the SharePoint admin center has not expired.
- Retention policy: A Microsoft 365 retention policy or retention labels prevent the deletion of an unlicensed OneDrive account. It is quite common for tenants to apply a blanket retention policy to all SharePoint Online sites and OneDrive accounts to retain information for multiple years. If this happens, the unlicensed OneDrive accounts cannot be removed until the retention period defined by the policy lapses.
- Active user with no license: The account that owns the OneDrive account is still active (is not deleted), but no longer has access to a service plan for OneDrive.
- Duplicate accounts: The account that owns the OneDrive account has several OneDrive accounts. This used to happen more often several years ago when account provisioning was not as good as it is now. I have not seen a duplicate account created in the recent past.
Figure 1 shows that my tenant has 34 unlicensed OneDrive accounts held by a retention policy. This is expected because I use a broad retention policy to govern removal of material from SharePoint Online and OneDrive for Business. Currently, you cannot see details of the accounts within each of the four categories on-screen. Instead, you must download the CSV file containing the details. In their documentation, Microsoft promises that an interactive UI will be available from January 2025, saying that “You can select a username to view the details.” Presumably, this means that the various sections in the on-screen report will expand to show usernames, and you can then expand a username to see its details, such as those available in the CSV file (Figure 2).
Time to Review Unlicensed OneDrive Account Information
Now that information about unlicensed OneDrive accounts is available in the SharePoint admin center, tenant administrators should check the report and review its content to determine if anything unexpected is present. I don’t imagine that anything strange will turn up, but you never know. Following the review, administrators might decide to adjust retention periods and policies to allow the removal of OneDrive accounts belonging to deleted Entra ID accounts or prepare for long-term storage in Microsoft 365 Archive.
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In our company we have 5 years retention policy for OneDrive, so the report shows some PBs of storage. Interesting Microsoft’s strategy, in the sense you need to pay for something was free (yes, nothing new)
What it is not fully clear for me is the sentence “if you don’t opt-in [do nothing and don’t setup Microsoft Archive], these accounts may be deleted after 180 days of being unlicensed”.
Based on that, since Microsoft can’t delete something with a retention policy applied, just wondering what means the sentence “If no action is taken, the account remains archived through Microsoft 365 Archive.”… in the scenario when you don’t have Microsoft Archive enabled..
Will they remain inaccesible until you setup Microsoft Archive? At the end, will we need to enable the Archive if we want to run an ediscovery case? I think the answer is at the beginning of my comment 🙂
In their documentation, Microsoft says:
5. How does it impact Retention Policy, Retention Setting, or Litigation Hold?
Answer: Archived OneDrive accounts fully honor retention policies, settings, and litigation holds. For example, if your company has a 5-year retention policy, it remains unchanged whether the OneDrive account is active or archived. Archiving does not reset the timeline of the retention policy or holds.
Where is the source for the statement about accounts being deleted 180 days after becoming unlicensed?
An account can stay in Microsoft 365 Archive even when you don’t connect an Azure subscription to use Archive. If you just want to keep the data, that’s fine. But if you want to access the data (using a client), you need a subscription.
4. How does it impact eDiscovery in Microsoft Purview?
Answer: Microsoft Purview eDiscovery and Content Search will still be discoverable in archived content. You will need to reactivate any archived sites first to access content, and then an export option will be available. Files with retention policies will follow standard procedures of deletion and restoration.
Thanks for the information and reply. The “180 days after becoming unlicensed” sentence is located in the explanation text in the GUI (Figure 1), although is true it is more detailed when you open the documentation with the different scenarios.
Aha, now I know what you’re referring to. The 180 days referred to there is no covered in any Microsoft documentation that I can find (my search capabilities might be limited). But anyway, retention policies take precedence and are explicitly covered in the documentation.
After talking the issue through with some contacts, it seems like the 180 days is an attempt by Microsoft to clean up old OneDrive accounts that a tenant obviously doesn’t want because the tenant is unwilling to pay a minimal storage cost for their retention. I’ll update the text.
Microsoft docs on this topic say to delete unlicensed OneDrive storage you need to delete the user account. But it’s common practice to convert user mailboxes to shared mailboxes to preserve content which remains linked to the user account. Is there a process to delete the OneDrive storage without deleting the user account and having to lose or export the shared mailbox?
I recommend using inactive mailboxes rather than converting mailboxes into shared mailboxes: https://office365itpros.com/2024/07/22/ex-employee-mailboxes-choice/
If you use inactive mailboxes, you can delete the user account and have the OneDrive account removed at the same time.
Thanks for the info. No more ignoring content; Microsoft is now encouraging you to make a decision or pay for the consequences.
To be fair, it’s only taken Microsoft 12 years to make the decision to force people to pay…
It appears there may be an alternate method to delete inactive OneDrive storage for a user and keep the shared mailbox without deleting the user account using SharePoint Online Management Shell and the OneDrive site URL:
Remove-SPOSite -Identity “https://-my.sharepoint.com/personal/username_domain”
where Identity is the OneDrive site URL from the unlicensed OneDrive CSV report.
Absolutely, and if the account is subject to a retention hold, it will be held and not be deleted.
My point about using inactive mailboes is that using this method (rather than converting a mailbox to be a shared mailbox) performs more clean-up, like removing accounts from distribution groups, teams, etc.
I fully understand why they are doing this – there must be an enormous amount of storage in OneDrive sites that are inactive. Slightly frustrating given they have offered us up to 10 years of retention or longer if you didn’t delete the account till now. So at 5p/GB anything over 82GB would mean buying a SharePoint plan 1 licence would be cheaper and probably less if you have a Enterprise Agreement discounts 🙂
We do not delete accounts but rather disable them and then remove the user from all groups and licenses. So, its unfortunate that you must delete an account instead of MS deleting the OneDrive automatically for disabled accounts without license (unless under retention).
In our case that retention time for OneDrive is set to 10 , do we have just 2 option?
1- Lower the retention time to maximum 90 days
2- Pay for a archived storage after Jan 2025
Is there anyway we can delete the OneDrive site while the status on the report is set to “Owner deleted from Entra ID”
Well, you can’t delete a OneDrive account if it is covered by a retention policy. If it’s not, then you can remove it at any time or let it go into the archive.
Thanks for article Tony.
So if I’m understanding this correctly, if for example you had a Purview retention policy that kept all deleted OneDrive accounts forever, the accounts would be moved to the M365 archive, but they would never be deleted due to the retention policy being honoured and would still be searchable and data could be exported using eDiscovery Content Search?
Cheers
That’s my understanding. Things will be much clearer when the actual code is available.
Thank you, very much appreciated!
This was a fun surprise – we had put a retention time of 365 days way back when we setup our tenant. Easy fix for us by changing the “OrphanedPersonalSitesRetentionPeriod” to 90 days. We don’t require retention after deletion in our tenant. We are also pushing hard for OneDrive to be empty when a staff leaves, so there won’t be much to retain anyways.
Another curious issue that arises is from shared mailboxes where we have added a licence (which includes OneDrive) for a period of time when we need to use the shared mailbox directly (i.e. hosting teams meetings) but then removed the licence later on. Now the unlicensed OneDrive report shows a handful of these shared mailboxes. It will be interesting to see if the OneDrives eventually get deleted – all but one are at 0MB anyways.
I think there are a number of kinks to workout when this feature goes live. We’ve had 10+ years of OneDrive account retention for free and people will have done many strange and wonderful things in that time. We’ll find all those things out as the software starts to work. I do like the policy of emptying OneDrive before someone leaves. It makes perfect sense to handover or delete documents before someone walks out the door.