Unlicensed OneDrive user accounts: What you need to know
We are approaching the start date of when the new policy for unlicensed OneDrive user accounts is taking place. We want to give some updates on what to expect, when to expect them, and what actions you can take to ensure a smooth transition. To enhance security, compliance, and storage management this change will help organizations optimize storage, streamline account management, and ensure data security. What is happening? Beginning on Jan 27th, 2025, any OneDrive user accounts that have been unlicensed for longer than 93 days will be inaccessible to admins and end users. Accounts become unlicensed when the admin removes the license, or the user is deleted from Entra ID. How does an account get unlicensed? When an account becomes unlicensed, it means that the user no longer has a valid license associated with their account. This can happen for various reasons, such as the expiration of a subscription, the removal of a license by an admin, or changes in the organization's licensing agreements. These accounts will be automatically archived and will still be viewable via admin tools but will not be accessible until admins take action on them. One example of this is if a OneDrive account became unlicensed on August 1st, 2025, this account will be inaccessible as of Oct 1st, 2025. In some scenarios, users with the necessary permissions can access SharePoint Online and OneDrive for Business resources without a license. Do admins get notified ahead of time when an account is going to be unlicensed? Yes, admins are notified ahead of time when user accounts are about to become unlicensed in OneDrive. Here are the key points: Notification Timeline: Admins receive notifications about unlicensed OneDrive accounts through the Microsoft 365 Message Center. Message Center Updates: For example, a Message Center post (MC836942) informs admins about the changes to storage policies for unlicensed OneDrive accounts. Preparation Steps: Admins are advised to review existing retention policies, move actively used data to licensed accounts or SharePoint sites, and enable billing for archived unlicensed OneDrive accounts. These steps help ensure a smooth transition and minimize disruptions Reports and Monitoring: Admins can generate reports on unlicensed OneDrive accounts using the SharePoint admin center. These reports provide details such as the number of unlicensed accounts, storage used, and reasons for unlicensing) By following these notifications and preparation steps, admins can effectively manage unlicensed OneDrive accounts and ensure compliance with organizational policies. What is the impact for administrators? Beginning on January 27th, 2025, admins will have three options for managing unlicensed OneDrive accounts: Setting up the Archive billing for unlicensed accounts to be able to access and edit the archived files. Delete the unlicensed OneDrive account, if it does not have a retention policy applied to it. Re-license the unlicensed account to maintain access. All purview features work with archived unlicensed OneDrive accounts, including retention policies, legal holds, and eDiscovery search & export. When accounts become unlicensed, they are automatically archived. Admins must enable unlicensed account billing in the Microsoft 365 admin center to access the files. There is a fee of $0.05/GB/Month to store unlicensed accounts in Microsoft 365 Archive, and A fee of $0.60/GB to reactivate accounts stored in Microsoft 365 Archive. When OneDrive accounts become unlicensed, there are some costs to be aware of that were not present previously. Here's what you need to know: Storage Fees: Archived unlicensed accounts now incur a storage fee of $0.05 per GB per month. Reactivation Costs: Reactivating an archived account costs $0.60 per GB, providing 30-day access. Operational Expenses: Managing unlicensed accounts involves additional administrative tasks and costs. Compliance and Security: Properly archiving and billing unlicensed accounts helps mitigate security and compliance risk. Reactivating an account takes up to 24 hours and grants 30-day access, after which the account is archived again. If a OneDrive account is unlicensed for over 93 days with no action, it stays inaccessible unless an Azure subscription is set up and unlicensed billing is enabled in the SharePoint admin center. Note: This will not affect tenants who have not changed the default tenant retention settings. How to get a list of unlicensed accounts Admins can find a list of unlicensed accounts by going to the SharePoint admin center>Reports>OneDrive accounts. This will display how many accounts are unlicensed and the reason why out of the possibilities: Retention period – Account is no longer licensed but is still active because a retention period setting is keeping the account from being deleted. Retention policy – Account is no longer licensed but is still active because a retention policy in Purview is keeping the account from being deleted. Active user with no license – Account is active but is not licensed. This can arise if the license is removed but the user is not removed from Entra IDAAD. Duplicate accounts – Account is a duplicate because a licensed user has multiple OneDrive accounts associated with them. Duplicate accounts (also known as non-primary accounts) may arise if a user has geographic move, or if a user leaves and then rejoins an organization, or it may arise from other factors. How to access inaccessible accounts If admins want to access the data of the now inaccessible unlicensed OneDrive account, they must do the following prerequisites to set up Microsoft 365 Archive : Set up and link Azure subscription in Syntex pay-as-you-go . Must have Global admin or SharePoint admin permissions. Enable Microsoft 365 Archive Unlicensed Account billing (billing is available starting December 2024). If a OneDrive account stays unlicensed for longer than 93 days, the account becomes inaccessible until you fulfill the prerequisites. How does this affect EDU Tenants? These changes don't apply to Education tenants, which have over 50% education licenses. Tenants with fewer than 50% education licenses are considered commercial. Unlicensed OneDrive accounts use pooled storage and can cause security and compliance issues. OneDrive accounts can become unlicensed if the user is deleted from Entra ID but the account is kept due to retention policies, or if the user stays in Entra ID without a valid license. Examples include alumni accounts moving to a free Exchange Online for Alumni license or duplicate accounts. EDU Admin tenants can find unlicensed OneDrive accounts in the SharePoint admin center under Reports > OneDrive accounts. The report shows why accounts are unlicensed, the number of accounts, and storage used. We understand that changes like these can be challenging, and we want to assure you have as many resources as possible. Our goal is to make this transition as smooth as possible, and implementing these updates, we aim to enhance security, compliance, and storage management, ultimately providing a better experience for everyone. Additional resources: Manage unlicensed OneDrive user accounts - SharePoint in Microsoft 365 | Microsoft Learn Quick Start Guide OneDrive Office Hours-Unlicensed OneDrive User Accounts Sync Up Podcast- Unlicensed accounts at 19:56
