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Microsoft 365 Archive Takes On Unlicensed OneDrive Sites
What are we to make of the announcement in message center notification MC836942 (26 July 2024) that Microsoft plans to charge for storing unlicensed OneDrive for Business sites through Microsoft 365 Archive?
Slipped into the newsfeed late on a Friday afternoon (the recommended way to share bad news), Microsoft’s announcement is both unexpected and entirely predictable. It’s unexpected because Microsoft hadn’t communicated their intention of doing this during high-profile conference keynotes (perhaps because of the bad news element). It’s predictable because Microsoft hadn’t the tool to handle unlicensed OneDrive sites until Microsoft 365 Archive (Figure 1) came along. Archiving unlicensed sites makes a ton of sense.
An unlicensed OneDrive site can exist for several reasons. The most common is that the site comes within the scope of a retention policy (or items within the site have retention labels). In this situation, OneDrive must retain the sites even after the retention period configured for deleted OneDrive accounts (by default 30 days) elapses. It’s also possible that the owner’s account no longer has a OneDrive license.
The simplest reading for this story is that Microsoft wants organizations to clean up (remove) unlicensed OneDrive sites. It could also be a step to help organizations manage the removal of OneDrive sites belonging to ex-employees better. These reasons are valid, but as often the case with Microsoft, some other influences might also contribute to the decision.
Helping Copilot for Microsoft 365
Copilot for Microsoft 365 might be another factor in this story. By their very nature, unlicensed OneDrive sites are unmanaged and prone to contain obsolete and unwanted information. Keeping the obsolete sites online and available for Copilot to access increases the chances that Copilot will reuse some of the material contained in the sites in its responses to user prompts. That’s obviously a bad thing.
As I noted on May 20, archiving obsolete material can help organizations deal with the digital debris found in obsolete SharePoint Online sites. The same applies to obsolete OneDrive sites.
Payment for Archived OneDrive Sites
Like SharePoint Online sites managed by Microsoft 365 Archive, Microsoft will charge to archive unlicensed OneDrive sites. The charge is minimal ($0.05/GB per month) with a $0.60/GB fee to reactivate an archived site. Like other Microsoft 365 Archive operations, payments must be made through an Azure subscription.
The interesting thing is that reactivation lasts 30 days after which the site becomes archived again. It seems like this is a strong hint for someone to use the time to extract any required information from the reactivated OneDrive site before removing the account.
One thing that’s unclear is what happens if you don’t set up an Azure subscription. From the text, it seems like OneDrive will automatically move the unlicensed sites into Microsoft 365 Archive and the sites will remain there in an inaccessible (can’t be reactivated) state until the organization creates an Azure subscription and links the subscription to Microsoft 365 Archive. However, even when an Azure subscription is not present, archived sites remain indexed and available to Purview compliance solutions like eDiscovery, so administrators can still run content searches to find and export content from the archived sites.
I don’t think archiving unlicensed OneDrive sites will be a huge revenue generator for Microsoft. But what it might do is bring Microsoft 365 Archive to the attention of organizations that have not used it before who might then start to use the product to archive obsolete SharePoint Online sites. The big attraction here is that moving SharePoint Online sites to Microsoft 365 Archive frees up expensive SharePoint storage.
Next Steps
To help tenant administrators understand how many unlicensed OneDrive sites are present, Microsoft plans to introduce a new report for OneDrive in the SharePoint Online admin center. The new report should be available in all tenants worldwide by August 16, 2024. The report notes why OneDrive accounts are unlicensed. Tenant administrators can’t do much about sites required for retention, but they can remove the other sites.
January 27, 2025, marks the point when Microsoft moves unlicensed OneDrive sites into Microsoft 365 Archive and Azure subscriptions are required to reactivate sites. The six-month period before automatic archiving of OneDrive sites in an unlicensed state for 90 days begins should be enough time to discuss and decide how to accommodate this new aspect of OneDrive management.
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Hi Tony, does this mean that any OneDrive retention period beyond 90 days (currently limited at 3650 days) will only continue to be accessible if the user was added an “Archiving subscription”?
The MSFT documentation indicates that retention will apply regardless of the additional subscription. However, as long as the prerequisites arent met, you’ll not be able (even as admin) to access the data after that 90 days. And the prerequisites are all about billing setup and subscription assignment.
And I assume archiving can only last for as long as the retention period is configured?
Thank you!
There’s retention applied by OneDrive and retention applied by Purview.
It seems clear that any OneDrive site unlicensed for more than 90 days will be archived. How long it remains in that state depends on whether a retention hold applies to the site or files in the site OR the OneDrive retention period. At least, that’s my understanding. We need to test this when the code is available.
Thanks for the article, Tony. May I ask where you found the information that suggests “archived sites remain indexed and available to Purview compliance solutions like eDiscovery, so administrators can still run content searches to find and export content from the archived sites.” I must be missing it, but I can’t find that in the Message Center post, nor in the accompanying articles.
I asked the development group.
Best news I’ve heard all week. Thank you!
Well, I won’t believe anything 100% until I have tested it myself when the code is available, but that’s what the developers say.
Thanks for the article, Tony. Could you please clarify if the payment rules for archived Unlicensed OneDrive accounts are the same as those for archived SharePoint sites, particularly in terms of storage consumption? According to the documentation for Microsoft 365 Archive, there’s no additional storage cost for archived sites if the tenant hasn’t yet consumed its already licensed Storage quota.
For example, if the active tenant storage quota is 100TB and the active storage usage is 50TB, and the storage used by unlicensed OneDrive accounts is 20TB, will I be charged for this 20TB when they are moved to Microsoft 365 Archive?
The same rules apply. You pay five cents per month per gigabyte for archived drives unless your tenant SharePoint storage quota is not fully used, in which case the unused quota offsets any charge arising from the archived OneDrive accounts. In your example, the 50 GB of unused tenant quota will fully offset the 20 GB of archived OneDrive content.