Upcoming Updates to One Drive Retention Policies

Microsoft is implementing significant changes to the retention policies for OneDrive accounts, which could impact how organizations manage their data, particularly concerning unlicensed accounts. These changes are set to take effect on January 27, 2025, and understanding them is crucial for avoiding unexpected costs and ensuring compliance. This blog post will unpack these changes, detail their implications, and recommend actions you can take to prepare.

Overview of Changes

The core of the upcoming changes revolves around the handling of unlicensed OneDrive accounts. Specifically, any OneDrive user account that remains unlicensed for more than 93 days will face two potential pathways:

• If the account falls under a retention policy, the data will be automatically archived after the license removal. However, it will be visible to admins but not accessible without taking additional actions.
• If the account is not covered by a retention policy, it will be moved to the recycle bin after 93 days and subsequently deleted permanently.

Current Functionality vs. New Functionality

To understand the implications of these changes, it’s helpful to compare the current functionality with the new functionality coming in January 2025. Currently, when a user is unlicensed, their data can be retained indefinitely if they are not deleted from the system. This has led to situations where organizations might have large amounts of dormant data without incurring storage fees.

However, the new functionality aims to address this loophole. Organizations that have high employee churn and do not delete users from their systems could find themselves facing significant storage costs as unlicensed data accumulates.

Understanding the User Deletion Process

When an employee leaves an organization, there are two primary methods for handling their OneDrive account:

• Unlicense the user: This method involves stripping the user of their license without deleting their account. If no retention policy is applied, their data can remain indefinitely.
• Delete the user: This method involves going through the user deletion wizard, which allows for a default 30-day retention period where admins can recover data. After this period, the data is moved to the recycle bin, where it can be retained for an additional 93 days before permanent deletion.

Retention Policies and Their Role

Retention policies play a crucial role in managing data in OneDrive. Organizations can set these policies through the SharePoint admin center or the compliance admin center. Retention policies can specify how long data should be retained and dictate whether it should be deleted or kept indefinitely.

As of the new changes, if a user is deleted and a retention policy is in place, the data will be archived after 93 days. This archived data will not be accessible unless specific actions are taken, including potential fees for reactivation.

Cost Implications of the New Changes

One of the significant implications of these changes is the potential for increased costs associated with reactivating archived data. If an organization wants to access data from an archived OneDrive account, they will incur:

• A one-time reactivation fee of $0.60 per gigabyte.
• A monthly storage fee of $0.05 per gigabyte for the total amount of archived data across all accounts.

This can lead to substantial costs, especially for organizations with large amounts of archived data.

Actions to Take Before the Changes Take Effect

To prepare for these changes, organizations should consider the following actions:

• Review User Accounts: Conduct an audit of current user accounts to identify unlicensed accounts and understand the potential storage costs associated with them.
• Implement Retention Policies: Ensure that appropriate retention policies are in place for sensitive data, particularly for users who are likely to leave the organization.
• Educate Employees: Inform employees about the implications of these changes and encourage them to back up important data before leaving the organization.
• Consider Third-Party Backup Solutions: Look into third-party backup solutions that can provide additional data protection and potentially lower costs compared to Microsoft’s storage fees.

Utilizing the SharePoint Admin Center

The SharePoint admin center provides tools to help organizations manage their OneDrive accounts effectively. Here’s how to access relevant reports and understand your storage usage:

1. Sign in to the SharePoint admin center with your work or school account.
2. Go to Reports and select User reports.
3. Under OneDrive usage, select Unlicensed users.
4. Download the report to analyze the number of unlicensed accounts and the storage being used.

Key Considerations for Organizations

As organizations prepare for these changes, several considerations should be kept in mind:

• Evaluate the existing data retention practices and how they align with the new OneDrive policies.
• Consider the financial implications of maintaining unlicensed accounts versus deleting them.
• Ensure compliance with any legal or regulatory requirements concerning data retention.
• Stay informed about updates from Microsoft that may further impact OneDrive functionality.

Conclusion

The changes to OneDrive retention policies represent a significant shift in how organizations will need to manage their data. By understanding the implications of these changes and taking proactive steps, organizations can minimize their risks and costs associated with data retention in OneDrive. Being prepared will ensure that your organization is not caught off guard when these changes take effect in January 2025.

Frequently Asked Questions

1. What happens to unlicensed OneDrive accounts after 93 days?

Unlicensed OneDrive accounts will either be archived if they fall under a retention policy or moved to the recycle bin for deletion if there is no retention policy in place.

2. Will I incur costs for accessing archived data?

Yes, accessing archived data will incur a reactivation fee and a monthly storage fee for all archived accounts.

3. Can I retain data indefinitely without incurring costs?

Currently, organizations can retain data indefinitely without costs, but this will change after the new policies take effect.

4. How can I prepare for these changes?

Conduct audits of user accounts, implement retention policies, educate employees, and consider third-party backup solutions.

5. Do these changes apply to all Microsoft 365 users?

No, the new retention policies do not apply to EDU, GCC, or DoD customers.