Managing Unlicensed Microsoft 365 OneDrive Accounts
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Microsoft’s recent announcement about changes to OneDrive licensing has significant implications for organizations managing unlicensed accounts. These changes, which began taking effect on January 27, 2025, mean that unlicensed OneDrive accounts - those associated with users who have had their Microsoft 365 licenses removed - will either be deleted or incur storage charges. The transition period for these changes extends until May 16, 2025, and will be applied to tenants gradually.
Reporting: Does this affect your tenant?
If your organization uses OneDrive, these changes will affect you. The key question is how to approach governance in light of this shift. To assess your current situation, you can review your tenant’s unlicensed OneDrive accounts. There is a report of all available unlicensed OneDrive accounts available through the SharePoint admin center. This provides a high-level view of the impact and allows for a more detailed analysis by exporting the data to Excel.
Migration strategies
Once you identify unlicensed OneDrive accounts in your tenant, you have several options. One approach is to do nothing and allow Microsoft to delete these accounts, leading to permanent loss of their contents. If you need to preserve the data, you must determine the best migration method based on your available tools and the volume of files involved. For small-scale migrations, you can manually sync the drive to a new location or use OneDrive’s “Copy to” and “Move to” options. However, for larger datasets, we advise using third-party tools such as ShareGate.
Automating migration
For organizations with advanced governance strategies, automation offers a more streamlined approach. A 500-level maturity model migration would involve automated workflows that trigger content transfers when a user’s license is removed. This ensures that data is moved to a designated storage location without manual intervention, reducing the risk of accidental data loss.
Purview and retention policies
Retention policies play a crucial role in managing unlicensed OneDrive accounts. If a retention policy is in place, the OneDrive account will be archived and saved in cold storage until the retention period expires. The key concern here is ensuring that important files are not lost prematurely. Without a retention policy, unlicensed OneDrives become read-only after 60 days and are deleted after 93 days. However, with retention in place, these accounts transition to Microsoft 365 Archive after the 60-day read-only period. Archiving incurs a cost of $0.005 per GB per month, and restoring data from archive storage costs $0.60 per GB. Organizations should proactively clean up OneDrive content before it enters archive storage to avoid unnecessary expenses.
Understanding Microsoft Archive
Microsoft Archive allows organizations to retain data in an inactive state while maintaining security and compliance standards. The team dives into the differences between SharePoint and OneDrive archiving, exploring how each platform handles storage, retention, and accessibility. They cover the different costs, timelines, and key considerations for archiving and restoring content within the Microsoft ecosystem. Listen in for more detailed information.
Governance moving forward
This change highlights the need for organizations to take a more proactive approach to OneDrive governance. Many assume that once an employee leaves, their OneDrive is automatically deleted, but this is not the case. Now is the time to review storage policies, evaluate why some users’ OneDrives are disproportionately large, and educate employees on best practices for storing and sharing content. Organizations should also consider implementing monitoring strategies to track OneDrive usage and ensure compliance with internal policies.
As these changes take effect, organizations must act now to assess their exposure, implement appropriate migration and retention strategies, and establish governance policies that align with Microsoft’s evolving storage model. By taking proactive steps today, businesses can avoid unnecessary data loss, storage costs, and compliance risks in the future.
All Resources
- Manage unlicensed OneDrive user accounts
- Manage unlicensed OneDrive user accounts (FAQs)
- Overview of Microsoft 365 Archive
- Pricing model for Microsoft 365 Archive
- Microsoft 365 Archive Eliminates Reactivation Fees by March 31, 2025
- OneDrive retention and deletion - SharePoint in Microsoft 365 | Microsoft Learn
- ShareGate
- ShareGate Webinar on YouTube: Managing Unlicensed OneDrive Accounts | Stay Ahead of Microsoft’s Deadline
- Microsoft Graph -> reportRoot:getOneDriveActivityUserDetail
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