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Microsoft is changing their policy on OneDrive accounts without licenses. Take action today to maintain access to your unlicensed accounts.
In 2024, Microsoft revised its policy on OneDrive accounts without licenses. The initial plan, scheduled for January 27, 2025, meant that any account unlicensed for more than 93 days would become inaccessible to both end users and administrators.
However, the updated timeline shows that the rollout began on January 27, and enforcement will kick in 60 days from that date. For accounts that remain unlicensed before February 17, 2025, Microsoft has set the following milestones: on April 25, 2025, all such accounts will transition to read-only mode, and by May 16, 2025, they will be archived.
The Risks of Ignoring Unlicensed OneDrive Accounts: Data Loss and Increased Costs
The risks imposed by this new OneDrive licensing policy are twofold. First, there is the risk of losing access to critical data and breaking collaboration - if key information becomes inaccessible, your teams might face significant disruptions. Second, incorrect management of these accounts could lead to increased costs, forcing organizations to pay more for unnecessary storage and reactivation fees.
Beyond these immediate risks, one thing is certain for IT administrators: unlicensed OneDrive accounts will continue to grow as a management challenge moving forward.
According to our analysis at CoreView, on average, organizations see around 35% of their OneDrive accounts in an unlicensed state relative to the number of licensed users. For instance, in a company with 10,000 users, this means roughly 3,500 unlicensed accounts. With an average OneDrive account size of 11.54GB, these 3,500 accounts are storing approximately 40,390GB of data. At a storage cost of $0.05 per GB per month, the monthly archiving cost would be about $2,020, which adds up to nearly $24,240 per year.
This significant cost impact highlights the necessity for organizations to address the status of unlicensed OneDrive accounts promptly.
Strategies for Managing Unlicensed OneDrive Accounts
So, what does this new OneDrive policy mean for organizations like you?
Administrators now have a clear mandate to reassess and react to the status of unlicensed OneDrive accounts. When reviewing your accounts, you have three options:
1. Assign Licenses to Inactive OneDrive Accounts
Use: This is best for accounts with high usage or those containing critical data.
Benefits: Licensing ensures continued access, especially for data that remains relevant despite an employee's departure. It also facilitates smooth data migration to SharePoint or shared folders, maintaining operational continuity.
2. Delete Inactive OneDrive Accounts:
Use: This option is best used for accounts showing little to no recent activity.
Benefits: Removing these accounts reduces unnecessary storage and license costs while mitigating potential compliance issues.
3. Archive Inactive OneDrive Accounts:
Use: This is best for accounts holding data that isn’t actively used now but may be needed for legal or auditing purposes.
Benefits: Archiving secures historical data in line with retention policies. Although it incurs a storage fee, it ensures that this information remains safely accessible when required.
Now let’s jump into how admins can tactically review and manage OneDrive accounts based on the new policy.
Managing Unlicensed OneDrive Accounts via Microsoft Admin Center: A Step-by-Step Guide
With Microsoft’s updated policy now live, there’s no more “preparation” phase—the focus must shift immediately to establishing a robust, ongoing process for managing unlicensed OneDrive accounts.
In this section, we outline a step‐by‐step approach that helps you identify, assess, and clean up these accounts while setting up scalable processes for continuous management and offboarding.
Step 1: See Which OneDrive Accounts Are Impacted
Use the SharePoint Admin Center:
Navigate to Reports > OneDrive accounts.
Use the report as your starting point to list unlicensed accounts and capture the “reason” for unlicensing. Possible categories include:
Retention Period: The account is unlicensed but remains active due to an active retention period setting.
Retention Policy: The account is preserved because a retention policy in Purview prevents its deletion.
Active User with No License: An account may show active usage even though its license has been removed (for example, when a user isn’t removed from Entra ID).
Duplicate Accounts: Sometimes, multiple OneDrive accounts are associated with a single user, possibly due to moves or rejoining the organization.
Step 2: Establish a Clear Workflow for Each Unlicensed Account
A documented, repeatable process is critical. Your workflow should consist of the following key steps:
Step 2A. Assess Account Activity
Since the SharePoint admin center does not include detailed usage statistics, supplement the available data using these methods:
Option 1: Get Direct Access to the User’s OneDrive
Grant yourself (or a delegated administrator) temporary access to the user’s OneDrive account. Once inside, check the highest folder’s “Modified” date to get a quick indication of recent activity.
Option 2: Lookup the Unified Audit Log
For a more accurate measure, query the Unified Audit Log in the Compliance Center. Although this method requires higher privileges and patience (especially when searching over extended periods like 30–90 days), it will provide detailed file access metrics including last modified dates and the list of users who accessed the content.
Recommended query parameters:
Date range: 30 days (broader searches takes way longer)
Record Types: SharePointFileOperation
File, Folder or Site: OneDrive URL of the user
Workload: OneDrive
Option 3: Use PowerShell
Use a PowerShell script to fetch audit logs. This method can be automated to quickly extract key access metrics and compile the data needed for each unlicensed OneDrive.
Outcome: The goal of this phase is to determine the last accessed date of each OneDrive account and generate a list of users who have interacted with the content. Without this information, you’re effectively flying blind.
Step 2B: Decide on the Appropriate Clean-Up Action
Based on your activity assessment, determine one of the following actions for each account:
Assign a License: Promptly reassign a license. It’s best to assign either a OneDrive for Business (Plan 1) license or SharePoint Online (Plan 1) one. (Both are listed at $5.00 per month). This ensures uninterrupted access and prevents any risk of data loss.
Delete the Account:
Copy Data: Before deletion, transfer the OneDrive data to a dedicated SharePoint repository. Consider creating a separate folder for each user and granting the former employee’s manager (or a responsible party) access to these folders.
Remove Constraints: Ensure the account is released from any retention or eDiscovery policies that may block deletion.
Delete the Account: Once data is securely migrated and policies are lifted, proceed to delete the account to minimize storage costs and simplify compliance.
Leave for Archiving: Enable the archival process by turning on Microsoft 365 Archive billing. Accept the ongoing storage fee, knowing that your critical data remains securely preserved and accessible if required.
Step 3: Scale and Automate Your Management Process
To ensure that the management of unlicensed OneDrive accounts remains efficient and scalable, consider integrating these best practices:
Automate with PowerShell or Workflow Tools:
Set up a scheduled PowerShell script to continuously scan for new unlicensed accounts and extract relevant access data.
Automate the data-copy process for deletion candidates by scripting the migration of files to your dedicated SharePoint repository.
Establish Exclusion Groups for Policies:
Configure exclusion groups within retention or eDiscovery policies. This allows you to remove constraints on selected accounts by simply adding the user to an exclusion group—eliminating the need to manually adjust settings across multiple interfaces.
Review and Update Offboarding Procedures:
Modify your offboarding process to make a decision at the moment of a user’s departure.
Consider directly migrating the user’s OneDrive data either to a department SharePoint or to the manager’s OneDrive.
A recommended approach is to grant the manager temporary access (for a predefined number of days) and delegate the responsibility to back up any essential documents before the account transitions to unlicensed status.
Simplify OneDrive Management with CoreView
Faced with the growing challenges of managing unlicensed OneDrive accounts, organizations are turning to more advanced solutions, like CoreView, to streamline this process.
CoreView takes the complexity out of managing unlicensed OneDrive accounts with real-time management and automation:
Get visibility into unlicensed OneDrive accounts: See a complete list of unlicensed OneDrive accounts with key details. That way, you can confidently decide how to handle each account.
See how (and when) files in unlicensed OneDrives are accessed by users: With audit trails and fields like “Last Activity Date,” you can see who accessed each account and when they last accessed it.
Set up automation to manage OneDrive accounts moving forward: Once you’ve determined how to handle your unlicensed OneDrive accounts, CoreView allows you to run these tasks directly from the report.
But this isn’t just about solving today’s problem. For organizations scaling their OneDrive management process, CoreView provides additional capabilities:
Automate Data Migration: Set up workflows to automatically move or copy OneDrive content to a designated SharePoint site.
Simplify Access Management: Automatically grant access to dedicated users (for example, a manager) while lifting retention or eDiscovery constraints through pre-configured exclusion groups.
Automate Offboarding Processes: Improve your offboarding procedures by migrating a user’s OneDrive data to the departmental SharePoint or to a manager’s OneDrive. Provide the user’s manager temporary access to archive critical documents before the account is fully closed, ensuring nothing vital is lost in the transition.
