OneDrive · Licensing

OneDrive for Business Plan 2 is being retired: what "unlimited" actually was, and what to move where before January 2027

Published 17 September 2026 · 8 min read · All figures from Microsoft Learn, linked at the end

Microsoft announced on 28 January 2026 that the standalone SharePoint Online Plan 1/2 and OneDrive for Business Plan 1/2 SKUs are going away. The tenants most affected are the ones that bought Plan 2 for "unlimited" OneDrive and used it as a file server. This is the timeline, what the storage entitlement really was, the one trap that puts users into read-only during the licence swap, and a triage method for deciding where each terabyte goes.

The dates

Microsoft's stated reasons are low demand, "unintended or nonstandard usage", and operating cost. The recommended destinations are Microsoft 365 suites, storage capacity packs, or pay-as-you-go storage. In practice, the date that matters is your last renewal before January 2027, because that is when the clock to December 2029 starts for you.

What "unlimited" actually was

It was never unmetered. It was a request ladder, per user, and it still is:

StepQuotaHow you get it
Default1 TB per userAutomatic on qualifying plans.
Admin increase5 TB per userAdmin sets it, only if the tenant has 5 or more qualifying licences.
Support increase25 TB per userAdmin runs the eligibility diagnostic and requests it, only after the user has filled 90% of 5 TB.
Beyond 25 TB25 TB SharePoint team site(s)Provided by Microsoft Support once a user reaches 90% of 25 TB. Not OneDrive any more.

Two details that decide your migration:

OneDrive is personal storage by contract. Microsoft's service description says storing "system back-ups and departmental and organizational level data" in OneDrive is not supported, nor is licensing a bot or a department. The users sitting at 25 TB on Plan 2 are, almost by definition, the ones holding departmental data. That is the data that has to move to SharePoint, and SharePoint is pooled and metered.
Standalone OneDrive plans add only 0.5 GB per licence to the SharePoint pool. A suite licence adds 10 GB. So a Plan 2 tenant that never bought SharePoint has a pool of roughly 1 TB plus almost nothing, which is why "just move it to a team site" produces an add-on storage bill on day one.

The trap: read-only on licence swap

When you replace Plan 2 with a suite licence, the user's OneDrive quota is recalculated within 24 hours of their next access. The default is 1 TB. Microsoft's own admin documentation warns: if you decrease the storage limit and a user is over the new limit, their OneDrive becomes read-only. A 20 TB drive on a fresh E3 licence is a read-only 20 TB drive, and the sync client on that user's laptop stops uploading.

Order of operations that avoids it:

  1. Buy the suite licences first, but do not assign them yet. Confirm you have 5 or more qualifying licences.
  2. In the SharePoint admin center, raise the default OneDrive storage limit to 5 TB.
  3. For every user above 4.5 TB, run the storage-increase eligibility diagnostic and get the 25 TB limit granted before the swap. Users above ~22 TB need the SharePoint-team-site conversation with Support, and that content should probably go to a real site anyway.
  4. Only then swap licences, one wave at a time, and check each user's quota the next day.

Business Basic / Standard / Premium are documented at 1 TB per user with no 5 TB increase listed. If your users are over 1 TB and you are moving to a Business plan rather than E3/E5, the excess has to leave OneDrive.

Where each terabyte goes

Every migration off Plan 2 is a triage across four destinations with four different meters:

DataDestinationMeter
A person's own working filesOneDrive on the suite licenceIncluded, up to the 1/5/25 TB ladder above
Departmental / shared / "the archive folder"SharePoint sitesPool of 1 TB + 10 GB per suite licence; above that, Extra File Storage or pay-as-you-go SharePoint Storage at $0.20/GB/month list
Cold data you must keep but nobody opensSharePoint sites, then Microsoft 365 Archive$0.05/GB/month list, billed only for archived GB above the pool
Data nobody can name an owner forDelete (after retention review)Free, and usually the largest bucket

Worked example

Twenty users on OneDrive Plan 2 holding 60 TB in total. After the triage: 12 TB is personal working files, 30 TB is departmental, 15 TB is cold, 3 TB has no owner.

Same 60 TB, but the bill ranges from roughly $6,500/month (everything active in SharePoint) to about $3,600/month (cold data archived) to considerably less if the departmental bucket is trimmed honestly. The triage is the migration. Licence choice is the easy part.

The departed users nobody counted

Plan 2 tenants tend to have years of former employees whose 5–25 TB OneDrives were never deleted, because storage was "unlimited" so nobody had a reason. Those accounts are now in Microsoft's unlicensed-OneDrive lifecycle: read-only at day 60, archived at day 93, deleted at day 365 unless pay-as-you-go billing is enabled, at which point every one of them bills $0.05/GB/month. One 20 TB former-employee drive is about $1,000/month on that meter. We covered the mechanics in the unlicensed OneDrive billing write-up; in a Plan 2 migration, run that inventory first, because it changes which of the four buckets everything else lands in.

A checklist for the next renewal cycle

  1. Pull per-user OneDrive sizes (SharePoint admin center → Reports → OneDrive usage, or the Graph getOneDriveUsageAccountDetail report) and sort descending. The top ten accounts usually hold most of the volume.
  2. List unlicensed / departed-user OneDrives with sizes. Decide relicense / move / delete per account before their day 93.
  3. Classify the top accounts' content: personal, departmental, cold, ownerless. Get the owners to do it; IT guessing is how "the archive folder" ends up on the $0.20 meter.
  4. Compute the pool you will have on the target licences (1 TB + 10 GB per suite licence) against the departmental bucket. That number is your add-on or Archive decision.
  5. Set OneDrive default limits and request 25 TB increases before swapping licences.
  6. Swap in waves. Verify quotas the next day. Watch for read-only drives.

Free: your SharePoint pool position and the departed-user OneDrive list

StorageScout Lite is a read-only PowerShell audit that shows pool used vs allowance and exports every departed-user OneDrive with its size. No server, nothing leaves your tenant. The paid tiers add the dollar-quantified report for idle add-on, version history and recycle bins.

Download StorageScout Lite — free See what Solo adds

Disclosure: StorageScout is our product. Prices are Microsoft's public US list prices as documented on Microsoft Learn at the time of writing; your agreement, region and currency may differ. Dates are from Microsoft's Partner Center announcement. StorageScout is independent and not affiliated with or endorsed by Microsoft.

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