Table of Contents
Licensing Changes Brings Larger Mailboxes to More Microsoft 365 Users
Previously flagged in a licensing announcement in February 2026, on August 19, 2026, Microsoft announced details about the increase from 50 GB to 100 GB for the primary Exchange Online mailboxes for users with Microsoft 365 Business Basic, Microsoft 365 Business Standard, and Microsoft 365 Business Premium. The increase means that these Microsoft 365 business tenants now have the same mailbox quota as enterprise tenants, such as Office 365 E3.
Microsoft will make the additional quota available for existing mailboxes by including a new EXCHANGE_STORAGE_50GB service plan in the three licenses cited above. Once Exchange Online detects the presence of the service plan in a user license, it increases the mailbox quota by 50 GB. This only applies when a mailbox has the old default 50 GB quota. If a tenant has updated a mailbox quota in the past, Exchange Online keeps that quota in place. New mailboxes created for license holders receive the 100 GB quota automatically.
The mailbox quota assigned through other Microsoft 365 licenses remains unchanged, including the standalone Exchange Online Plan 1, which stays at 50 GB. Accounts with multiple licenses which include an Exchange service plan (a practice known as license stacking) are limited to a maximum 100 GB mailbox quota.
Microsoft points out that the change only affects the primary mailbox quota. Archive mailbox capabilities remain unchanged, with auto-expanding archiving continuing to support up to 1.5 TB of storage.
Why Large Mailbox Quotas?
The 100 GB mailbox quota has been available to enterprise customers since the launch of Office 365 in 2011. At the time, a large mailbox quota was deemed necessary for competitive purposes, especially against Gmail. The large quota also allowed tenants to migrate data held in PST files to online mailboxes to make that data available for compliance purposes.
It’s not immediately obvious why Microsoft decided to extend 100 GB mailboxes to business customers at this point. By definition, business tenants are limited to 300 accounts, which means that the volume of internal email is likely to be less than in enterprise tenants. However, it’s possible that Microsoft wants to simplify Exchange Online storage entitlements across commercial plans and eliminate a long-standing difference between business and enterprise subscriptions. Despite the predictions that Teams would eliminate internal email, users and applications continue to generate email, including messages containing Copilot-generated summaries, Loop components, and increasingly large attachments.
In addition, the simple fact is that few people bother to clean up mailboxes in the way that was once common. Email is left in place to be searched when necessary, and the only cleanup is whatever’s done by Exchange Online or Microsoft 365 retention policies.
Too Much of a Good Thing Results in Digital Debris
Until the introduction of AI-powered tools, retaining large quantities of obsolete information did not matter all that much. Microsoft facilitated the accumulation of data with generous mailbox quotas, while files piled up merrily in SharePoint Online. OneDrive for Business is arguably an even bigger problem because Microsoft has gradually turned OneDrive into the default repository for a wide range of Microsoft 365 content. The result is that the storage associated with Microsoft 365 accounts often contains a substantial amount of digital debris. Not only is this debris difficult to manage when someone leaves an organization, but it also provides a rich source of misleading information for tools such as Microsoft 365 Copilot to process.
Microsoft has taken steps to stop Copilot consuming document debris, the latest being the introduction of an intermediate move to Microsoft 365 Archive step for Purview retention labels and policies. Applying Restricted Content Discovery (RCD) to sites that hold a lot of old information is a good way to suppress misleading content.
Currently, there’s no comparable mechanism to stop Microsoft 365 Copilot from processing email that holds misleading or obsolete content. If email is available, Copilot can use it to respond to user prompts. Something like the DLP policy to prevent Copilot from using external email is probably required to block internal email, perhaps with the option to stop Copilot using email older than a certain date.
Archive Mailboxes Might be More Useful
Large mailbox quotas might please users and provide Microsoft with a useful competitive differentiator, or perhaps another way to justify future licensing increases. I have my doubts about how useful a 100 GB mailbox quota is to the average user. My own mailbox has not exceeded 10 GB since 2011, and I do not expect it to grow much larger anytime soon. Then again, I am old-school when it comes to deleting unwanted email, and I know of many people who have absolutely zero difficulty filling their 100 GB mailbox quota.
Archive mailboxes are included with Microsoft 365 Business Premium but not with Business Standard or Business Basic. (these tenants can purchase the optional Exchange Online Archiving add-on). Making archive mailboxes available across all Microsoft 365 business plans might be more useful than increasing mailbox quotas. However, Microsoft could well be concerned about the storage implications of archive mailboxes expanding to as much as 1.5 TB. From Microsoft’s perspective, that represents a much greater storage commitment than increasing a primary mailbox quota by 50 GB, especially when many users might never consume the additional space.
Learn how to use Exchange Online and to exploit the data available to Microsoft 365 tenant administrators through the Microsoft 365 for IT Pros eBook. We love figuring out how things work.