All companies and educational institutions without software licenses will have to purchase Microsoft OneDrive

Microsoft is making changes to the OneDrive service policy for organizations that use it for work or educational purposes. Companies and educational institutions will now be required to pay for data storage for accounts that do not have active licenses.

Starting January 27, 2025, any account that remains without a license for more than 90 days will be automatically archived. Microsoft will start charging a monthly fee of $0.05 for each gigabyte of data stored. In the archived state, the data will be inaccessible to both administrators and users until the organization starts paying for the storage of unlicensed accounts and pays a fee of $0.60 per gigabyte to reactivate them. If the storage payment stops, the account will be deleted within 93 days.

Microsoft explains these changes as the need to improve security. The company says that unlicensed OneDrive accounts can pose security risks, create non-compliance risks, and lead to file confusion and duplication. An unlicensed account is an account that is not associated with an active Microsoft 365 or Office 365 subscription. An account can become unlicensed after the license expires if it is not activated or assigned to a user. For example, if a student uses OneDrive for Schools and their license expires, the account becomes unlicensed.

In such cases, the organization is supposed to delete the account, but often doesn’t, leading to the security risks Microsoft points out. The new policy is designed to encourage organizations to manage accounts more carefully to avoid automatic archiving and the associated costs. There is a grace period for accounts that become archived: if the organization reactivates the account within 7 days, the reactivation fee of $0.60 per gigabyte will not be charged. After archiving, the account can be deleted without prior activation if it is not subject to data retention policies. Long-term storage of archived data is also possible subject to payment of the appropriate fee.

Starting January 27, 2025, any account that loses its license will have 90 days to archive it. For Microsoft accounts that lost their license before October 26, 2024, the archiving process can begin any time between the end of January and the end of March 2025. This means organizations need to address unlicensed accounts upfront. A list of these accounts should be available in the SharePoint Admin Center starting August 16, 2024.