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.

So much change, all the time. It’s a challenge to stay abreast of all the updates Microsoft makes across the Microsoft 365 ecosystem. Subscribe to the Office 365 for IT Pros eBook to receive monthly insights into what happens, why it happens, and what new features and capabilities mean for your tenant.