Table of Contents
Removal Happens for Unlicensed OneDrive for Business Accounts after the 365th Unpaid Day
Microsoft’s June 5 (updated June 9) announcement (MC1381110) that unlicensed OneDrive for Business accounts will be deleted after 365 days if their storage is not paid for not unexpected. Two years ago, Microsoft announced a plan to move unlicensed OneDrive for Business accounts into Microsoft 365 Archive and set out how tenants could pay for the archived accounts through an Azure subscription.
The move to archive unlicensed OneDrive for Business accounts was followed by the provision of a report in the SharePoint admin center to list unlicensed OneDrive for Business accounts. MC1381110 is the logical next step in the process by setting out how long Microsoft will keep OneDrive data for when it’s not paid for.
The new arrangement does not apply to education or government tenants. Deployment is likely to be staggered across Microsoft, so the exact date when Microsoft will delete unpaid for OneDrive for Business accounts will differ from tenant to tenant.
Reviewing Unlicensed OneDrive for Business Accounts
The current version of the unlicensed OneDrive for Business accounts report includes an option to view why the unlicensed accounts exist. Figure 1 shows many unlicensed accounts (from a few years ago) that are still archived because of Data lifecycle management retention policies or labels, including “retention policy, active lock”, which is probably because a retention policy with a preservation lock applies to the account.
If, like me, you’ve been content to let unlicensed OneDrive for Business accounts accumulate waiting for their retention periods to expire and the eventual removal of the accounts, things have changed and a different strategy is needed,
Ignoring Retention and eDiscovery
As explained in Microsoft’s documentation, “After 12 months of Unpaid storage/archive the OneDrive Data might be deleted regardless of Retention settings, retention policies, eDiscovery, and all holds.” Microsoft will wait for accounts to notch up 365 days of unpaid archival. Once that period lapses, Microsoft can delete the data without further warning. It’s interesting that Microsoft says that accounts “might be deleted” rather than the more emphatic “will be deleted.” I imagine that the latter is more likely.
There’s nothing to say that the deletion is permanent and irrecoverable, but I assume that this is the case. After all, if administrators don’t move to preserve content in a year days after license removal, the data probably isn’t much use.
It’s entirely reasonable that Microsoft should create a deadline for keeping unpaid for OneDrive for Business accounts in Microsoft 365 archive. We’re now 15 years into the Office 365 journey, and the number of unpaid for accounts that must be hanging around, cluttering up valuable storage, must be massive. Microsoft is now forcing tenants to decide what data they wish to keep (and pay for) and what they are happy to lose through automatic deletion.
The bottom line is that once the new regime becomes effective in early July 2026, unpaid OneDrive for Business accounts will be deleted after 365 days following license removal. For example, most of the accounts listed in Figure 1 will be removed even though the accounts are currently kept due to retention policies or by holds for eDiscovery cases. Overriding retention and holds to force deletion is the big difference between what happens now and what will happen after July 2026.
Does Valuable Information Exist in Unpaid OneDrive Accounts?
Those who look after data governance strategies for Microsoft 365 tenants might worry about the enforced removal of unpaid for accounts. I am more sanguine because I think that the amount of valuable data in these accounts that an organization might want to recover and keep is probably low. Besides, the accounts are now archived and inaccessible unless an administrator restores accounts to make them available online, so what you don’t know about, you don’t miss.
The Microsoft 365 account deletion workflow allows access to be granted to OneDrive for Business accounts for users that are being deleted. That’s supposed to be the way that organizations harvest information from OneDrive before account deletion. The unfortunate thing is that Microsoft uses OneDrive for Business to stuff so much stuff from so many applications that it’s harder to review everything.
Moving to Retain OneDrive for Business Accounts
The bottom line is that organizations can no longer afford to ignore archived OneDrive for Business accounts. Either the organization accepts that accounts are removed automatically or they enable billing for archived OneDrive for Business accounts (Figure 2) and mark which accounts they’re willing to pay for.
A good first step is to review the unlicensed OneDrive accounts report to understand how many (if any) of the unlicensed accounts you need to keep. The results will guide your next step to leave automatic deletion happen or to start paying for archived accounts.
The new arrangement effectively establishes a commercial (paid) boundary for compliance retention. No matter how you configure retention policies, OneDrive for Business data can only be retained so long as the associated storage is funded by being licensed through an Entra ID account or paying to store the account in Microsoft 365 Archive. I don’t think this will be a major source of new revenue for Microsoft, but it should help everyone by clearing out digital debris that has hung around Microsoft 365 for probably far too long.
The nice thing about generative AI tools is that they can generate information based on what’s gone before. The bad thing about generative AI tools is that they can’t create new thinking or insights about how technology works (or doesn’t). When we write the Office 365 for IT Pros and Automating Microsoft 365 with PowerShell eBooks, we depend on hundreds of years of real-world experience, knowledge, and intuition to analyze and explain how Microsoft 365 really works. If you understand the basic principles about Entra ID, Exchange Online, SharePoint Online, Teams, the Microsoft Graph, and more, you’ll be able to figure out the value of new features as Microsoft adds them to the platform. All for less than ten copies of black coffee.