Microsoft is getting ready to crackdown on unlicensed OneDrive accounts

The date is approaching on the new policy of how Microsoft will deal with unlicensed OneDrive accounts. Starting January 27th, 2005 accounts that have been unlicensed for 93 days will be inaccessible to admins and end users. How does this happen to an account? When an admin removes the license or the the user is removed from Entra ID.

These accounts will be archived and are still viewable with admin tools but will not be accessible until admins take action. In some situations users with permissions can access SharePoint Online and OneDrive for Business 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:

1. Notification Timeline: Admins receive notifications about unlicensed OneDrive accounts through the Microsoft 365 Message Center.
2. Message Center Updates: For example, a Message Center post (MC836942) informs admins about the changes to storage policies for unlicensed OneDrive accounts.
3. 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
4. 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. 

• 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:

1. Storage Fees: Archived unlicensed accounts now incur a storage fee of $0.05 per GB per month.
2. Reactivation Costs: Reactivating an archived account costs $0.60 per GB, providing 30-day access.
3. Operational Expenses: Managing unlicensed accounts involves additional administrative tasks and costs.
4. Compliance and Security: Properly archiving and billing unlicensed accounts helps mitigate security and compliance risk.

When accounts become unlicensed, they are automatically archived. Admins must enable unlicensed account billing in the Microsoft 365 admin center to access the files.

Reactivating an account takes up to 24 hours and grants 30 days of access allowing the account to be archived again. If a OneDrive account remains unlicensed for 93 days with no action it stays inaccessible with a proper Azure subscription.