The Unlicensed OneDrive Free Ride Ends This Month

Still keeping data in unlicensed OneDrive accounts of long-gone users? The time has come to act: The data could soon become inaccessible or even permanently deleted.

Microsoft warned in 2024 that this day was coming. Beginning January 27, 2025, any OneDrive user account that has been unlicensed for more than 93 days will either be moved to the recycle bin or archived.

An unlicensed OneDrive account can come about when a user leaves an organization and is deleted from the SharePoint admin center or an administrator removes the license.

In the past, an unlicensed OneDrive account represented a nifty loophole for retaining data indefinitely for free. If a user left, their account could be disabled and the license removed, but the data would be retained without paying Microsoft for it. Redmond's take on the situation is: "Unlicensed OneDrive accounts can pose security and compliance risks, as well as create confusion and duplication of files."

For users exploiting the loophole, times are changing, and Microsoft will start taking steps to close it this month.

Starting January 27, 2025, unless retention policies or legal holds are in place, OneDrive data from unlicensed accounts or deleted users will be moved to the recycle bin 93 days after the account becomes unlicensed. The data will remain in the recycle bin for an additional 93 days before permanent deletion.

Even with a retention policy or legal holds in place, after 93 days, the data from unlicensed OneDrive accounts or deleted users will still go into an archive. A customer who wants to reactivate that account will be expected to pay $0.60/GB to do so, and then a monthly fee of $0.05/GB for all unlicensed accounts.

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Microsoft gave the example of an organization with 100 unlicensed OneDrive accounts, each consuming 1 TB for 100 TB. The enforcement means that the 100 accounts would be automatically archived.

"If the organization needs to reactivate a specific account in October 2025 and set up billing, they incur the following costs:

"A one-time reactivation fee of $0.60/GB for 1TB, totaling $614.40. A monthly storage fee of $0.05/GB for 100TB, amounting to $5,120/month starting from October 2025."

Affected administrators have a few options. Pulling the required data out of the unlicensed accounts is one, followed by deletion – although doing so might run afoul of retention policies. Licenses could also be applied to unlicensed accounts.

Alternatively, an administrator could do nothing and await the helpdesk tickets as data is archived or inaccessible.

Rob Helm, managing VP of research at Directions on Microsoft, said, "If you do nothing, a former employee's data will go offline and then disappear completely when you take back their license, not just when you take them out of the directory.

"That could make it tough to hand over the role to someone else, and in the worst case could create trouble from courts and regulators." ®