Big changes are coming to unlicensed OneDrives. If you don’t act, you could lose data—or get stuck paying for storage you don’t need. We break down what’s happening, what it means for IT, and what your options are.
Big changes are coming to OneDrive, and IT teams need to act fast. Microsoft is enforcing a new policy that will restrict access to unlicensed OneDrive accounts before eventually archiving or deleting them. If your organization still has important data in these accounts, waiting too long could mean losing it for good or paying unexpected retrieval costs.
With the deadline fast approaching, IT admins need to understand what’s changing, what risks are at stake, and what options are available. In this blog, we’ll break down Microsoft’s new policy, explain how it impacts IT teams, and outline the best ways to keep your OneDrive data secure before it’s too late.
Time is running out—let’s dive in.
Table of content
What’s Microsoft’s new policy for unlicensed OneDrive accounts?
If your organization has been hanging on to unlicensed OneDrive accounts without a plan, Microsoft is about to make that a problem. Up until now, IT teams could let these accounts sit indefinitely without worrying about access restrictions or extra costs.
But now, Microsoft is making some changes.
On April 25, 2025, any remaining unlicensed OneDrive accounts will become read-only. That means no edits, no uploads, and no changes. If someone left their files there, they’re stuck.
On May 16, 2025, Microsoft will take things a step further.
If your organization has a retention policy, the OneDrive account will be archived. Sounds nice, right? Except now you have to pay to store that data, $0.05/GB per month. And if you do need to access an unlicensed OneDrive account again, it’ll also cost you $0.60/GB to reactivate it. It can also take some effort and up to 24 hours to reactivate, which could lead to problems if you’re in a hurry.
If you don’t have a retention policy, the account is moved to the recycle bin for 93 days, after which it’s permanently deleted. No recovery, no second chances.
The days of quietly ignoring unlicensed OneDrive accounts are over. Companies with high employee turnover or long retention policies will need to be more careful of how they manage unlicensed OneDrives.
If your users still have important files sitting in them, they could be in for a rude awakening when they suddenly lose access—or when IT gets stuck paying hefty reactivation and storage fees to get them back.
How will the new unlicensed OneDrive policy affect you?
Short answer? If you don’t act, you could lose data, rack up unexpected costs, and end up with a compliance or security nightmare.
Data loss is a real risk
If no retention policy is in place, once an unlicensed OneDrive is gone, it’s gone. Microsoft will delete the account after 93 days. That means users who thought their files were safe could suddenly find them permanently erased.
You could be stuck with surprise costs
Think you can just restore files later? Not without paying for it. Once an unlicensed OneDrive is archived, Microsoft charges a $0.60/GB reactivation fee and $0.05/GB per month for storage—across all archived accounts. If you have hundreds or thousands of unlicensed OneDrives, that bill adds up fast.
Unsecured data creates security risks
Unmanaged OneDrives can be a security blind spot. If old, unlicensed accounts contain sensitive data and IT loses control over who has access (or doesn’t secure it properly before deletion), it could open the door to breaches, leaks, or compliance violations.
Possible compliance violations
If your industry has strict data retention rules, losing critical files isn’t just inconvenient—it could put your organization out of compliance with regulations like HIPAA, GDPR, or FINRA. That means fines, audits, and a whole lot of unnecessary headaches.
What could this cost you? Two real-world examples
Let’s look at two real-world scenarios from Microsoft MVP Marc D. Anderson, who hosted our webinar Race against the OneDrive clock: How to stay ahead of Microsoft’s deadline.
Marc is the CEO of Sympraxis, a small consulting firm. After they heard about Microsoft’s new OneDrive policy, they looked into how it might affect them.
They found nine unlicensed OneDrives in their tenant—mostly from test accounts. Only one had actual data: an ex-employee’s OneDrive with 13.77 GB of storage. If that OneDrive were archived, the cost would be $0.69 per month. Not a huge deal—but do they even need the content?
Now, compare that to one of their clients, a larger organization with 1,592 unlicensed OneDrives. Some of these accounts had been sitting untouched since 2018, consuming 10.72 TB of storage. If archived, that client would be looking at $550 per month in storage fees. Again—do they even need the content?
These examples highlight an important question: Do you know what’s in your unlicensed OneDrives—and is it worth paying for? With Microsoft’s deadline fast approaching, now’s the time to clean up, migrate what matters, and avoid unnecessary costs. All things ShareGate can help you with!
Your options before the clock runs out
Microsoft’s new OneDrive policy is coming whether we like it or not. So, what’s your game plan? Here are your three options—along with their pros and cons.
Option 1: Do nothing and hope for the best
If you’re 100% sure there’s nothing valuable in your unlicensed OneDrives—and you’re absolutely certain that deleting them won’t cause compliance issues—you could choose to do nothing.
Or, if you already have a retention policy and paying to store data you’re not even sure you need is money you’re willing to waste, you could choose to do nothing.
Pros:
- No effort required. You sit back, and Microsoft deletes your data or starts charging you after May 16.
Cons:
- If you don’t have a retention policy in place and you’re wrong about the data not being important, it’s gone forever. This could of course lead to security risks, compliance issues, and angry end users.
- If you do have a retention policy in place, you now have to pay unnecessary storage fees every single month and reactivation fees if you need to access the data.
Option 2: Set a retention policy and pay for storage
Think of this as putting your OneDrives in storage instead of deleting them outright. If your organization has strict data retention rules, this might be the way to go. But there is a catch.
Pros:
- Ensures data isn’t deleted permanently if you need it later. This can help with compliance if your industry requires long-term data retention.
Cons:
- Storage isn’t free. Once a OneDrive is archived, you pay $0.05 per GB every month for all archived accounts in your tenant.
- If you need to retrieve an archived OneDrive account, you’ll pay $0.60 per GB to reactivate it. That bill can add up fast.
- You might be paying to store data you don’t even need—and who wants to foot the bill for a former intern’s pizza party planning files from 2019?
Option 3: Migrate the data you need
This is the “rip the Band-Aid off” approach. Instead of leaving data in unlicensed OneDrives and hoping for the best, you move what matters to licensed OneDrives or SharePoint before the deadline.
Pros:
- You avoid surprise storage and retrieval fees down the road.
- No risk of losing critical files or explaining to your boss why they disappeared.
- It helps you consolidate and clean up your Microsoft 365 environment.
Cons:
- It takes some effort—especially if you plan to migrate manually—since you need to figure out which OneDrives hold important data and where to move it.
Luckily, ShareGate makes it much easier with custom and pre-built reports, bulk migration tools, fast migrations, and an easy-to-use interface. No PowerShell, no headaches.
Want to see how it works? Ask for a walkthrough from one of our experts.
How to take control of your OneDrive data before time runs out
Migrating your data ensures that important files aren’t lost, that you’re not paying unnecessary storage fees, and that your organization stays secure and compliant. But manual migrations can be time-consuming and frustrating—especially if you’re dealing with hundreds or even thousands of accounts.
That’s where ShareGate comes in. With fast, hassle-free OneDrive migrations, ShareGate helps you:
- Move your data quickly and securely—no PowerShell, no complexity.
- Migrate in bulk and maintain file structure, metadata, and permissions.
- Identify and clean up unlicensed OneDrives before they become a problem.
Take control of your OneDrive data today and migrate with confidence before it’s too late. If you need a plan, talk to one of our experts and see how easy it is to migrate your OneDrive data before the deadline.
Is ShareGate right for your project?
Let’s dive in together with a live demo and explore the possibilities.
