Microsoft 365’s New Data Archiving Fee: How to Protect Your Unlicensed Microsoft User Data

Microsoft is making big changes to how they handle data for unlicensed users in Microsoft 365.

In the past, when a user’s license was removed, their data stayed accessible for a grace period (usually 30 days) before being permanently deleted.

In many cases, this period of accessibility could be extended based on the user’s retention policies. For example, organisations could configure their retention policy to hold onto OneDrive or email data for a set period that met their business or legal requirements.

Now, under the new policy, when a user becomes unlicensed, their data will be archived and locked away for a set fee. To regain access to this data, a service reactivation fee will also need to be paid.

Here, we’ll look more closely at Microsoft 365’s new policy changes, how they work, and what steps you can take to manage your data.

What is Microsoft 365’s new reactivation fee?

Starting in January 2025, Microsoft will automatically archive OneDrive accounts that have been unlicensed for more than 90 days.

Once archived, the data will be locked and inaccessible unless action is taken. To access the archived data, admins will need to enable billing for the unlicensed accounts through the Microsoft 365 admin center.

The cost to store archived data will be $0.05 per GB each month. But if you need to reactivate the account and access the data, there’s an additional reactivation fee of $0.60 per GB. Keep in mind, it can take up to 24 hours to fully restore access.

The key takeaway from this policy change is how important it is to stay on top of your Microsoft 365 licenses and retention policies to avoid extra charges.

Options for managing your unlicensed Microsoft 365 accounts

With Microsoft 365’s new data archiving policy, you have a few options for managing unlicensed user data. The best option will depend on your organisation’s specific needs.

1. Delete the account (and all its data)

If you don’t need the data in your unlicensed accounts anymore, you can delete them to avoid further costs.

Just be sure to review your organisation’s data retention policies—some data may need to be preserved for legal or business reasons.

If you think any data might be needed later, it’s better to be safe than sorry—back it up before deleting the accounts to avoid losing anything valuable.

2. Reactivate the account with a paid license

By assigning a paid license, you can reactivate your employees’ unlicensed Microsoft 365 accounts. This permits them to regain access to their accounts and OneDrive files while avoiding extra archival fees.

The cost of reactivating a Microsoft 365 account depends on your chosen plan, but typically ranges between $5 to $35 per user per month.

3. Pay the monthly archival fees

You also have the option of paying Microsoft’s new monthly archival fee to retain data from unlicensed accounts.

As mentioned earlier, this fee will be $0.05 per GB of archived data starting in January 2025. And remember, the data will be inaccessible until you pay an additional reactivation fee of $0.60 per GB to reactivate your archived account..

This option keeps your data safely stored until you need to access it again. But the costs can add up fast, especially if you have a higher-tier Microsoft 365 plan with a large number of unlicensed accounts or large amounts of archived data.

4. Use BackupVault’s AvePoint Backup Solution

Want to avoid dealing with Microsoft’s archival and reactivation fees altogether? Consider using BackupVault’s AvePoint backup solution. AvePoint 365 backup allows for unlimited retention of data, so you don’t need to worry about any of Microsoft’s archiving costs. You can simply access any required data from the backup.

AvePoint is a trusted leader in data backup and protection, specialising in Microsoft 365 environments. Through our partnership with AvePoint, BackupVault offers a powerful solution that lets you securely back up and access your old OneDrive data.

The benefits of BackupVault’s AvePoint solution include:

1. Avoid expensive archival fees

Enjoy easy access to your valuable Microsoft data when you need it without the expense of archiving or reactivation fees.

2. Strong security measures

AvePoint goes beyond basic backup, protecting your data from threats like cyberattacks, accidental deletions, or employee errors. It keeps your data secure, so you can be confident your important files are always safe.

3. Total control of your data

You no longer have to worry about sudden policy changes or unexpected costs from Microsoft. You’re in control, making it easy to manage and retrieve your files on your terms—no surprises.

4. Fast, hassle-free data recovery

If something does go wrong—like a user error, a system outage, or even a ransomware attack—BackupVault’s AvePoint solution ensures you can recover your data fast. That means no long recovery times or unnecessary stress.

5. Business continuity

You don’t have to worry about data loss disrupting your operations. Rest easy knowing your business will stay up and running at all times, and your critical data is always accessible with just a few clicks.

AvePoint has revolutionised data protection with their trailblazing multi SaaS backup solution. And thanks to our partnership, BackupVault can bring that protection to you and your business.

Explore the full capabilities of AvePoint with BackupVault’s 14-day free trial.