Is OneDrive the Right Place for Shared Files?
Most organizations have been there.
An employee leaves the company, but their OneDrive contains important project files, shared documents, department resources, or years of institutional knowledge. Since everything is still accessible, the files stay right where they are. The team continues working from that location, and life goes on.
Until it doesn't.
Microsoft recently announced changes to how unlicensed OneDrive accounts are handled, introducing stricter retention and deletion timelines that could put forgotten OneDrive data at risk if no action is taken.
What's Changing?
Beginning in July 2026, Microsoft will implement a new lifecycle for unlicensed OneDrive accounts. These are accounts that no longer have an assigned license, often because the user has left the organization or the license was removed.
Under the new policy:
Day 60: The unlicensed OneDrive becomes read-only.
Day 93: The OneDrive is archived and users can no longer directly access its contents.
Up to 12 cumulative months of non-payment: If no action is taken, the data may be permanently deleted.
Starting July 2027: Unlicensed OneDrive accounts that remain unpaid will be at risk of deletion. [learn.microsoft.com]
While administrators will have options to retain the data through licensing, billing, or migration strategies, organizations that have been relying on former employees' OneDrive accounts as long-term storage locations may need to take a closer look at where critical files reside.
The Hidden Risk of "We'll Move It Later"
OneDrive is an excellent solution for individual productivity. It was designed to give users a personal workspace for their documents and files.
The challenge arises when personal storage gradually becomes team storage.
A marketing folder, project documentation, proposal library, or shared resource collection may start in one employee's OneDrive and eventually become something the entire team depends on. Over time, ownership becomes blurred, and everyone assumes the files will always be there.
Microsoft's upcoming changes serve as a reminder that personal storage should not be treated as a permanent repository for organizational knowledge.
What Organizations Should Do
Microsoft recommends reviewing unlicensed OneDrive accounts and determining the appropriate next step, which may include:
Reassigning licenses
Enabling billing for archived storage
Migrating content to another OneDrive or SharePoint location
Updating retention policies
Removing data that is no longer required
For many organizations, this presents a valuable opportunity to evaluate their overall file management strategy and ensure business-critical documents have a long-term home.
Why SharePoint Is the Better Home for Shared Content
When files belong to a team, department, or organization, SharePoint is often the better solution.
Unlike OneDrive, which is tied to an individual user, SharePoint is designed for shared ownership and long-term collaboration. Documents remain accessible to authorized users regardless of staffing changes, making it a more sustainable option for team resources, project files, procedures, and organizational knowledge.
Benefits include:
Centralized team ownership
Long-term document management
Better governance and access controls
Version history and recovery options
Seamless integration with Microsoft Teams
Reduced dependency on individual user accounts
Final Thoughts
Microsoft's new retention policy isn't creating a new problem, it's highlighting an existing one.
If important team files are still living in OneDrive accounts that belong to former employees, now is a good time to review where those documents are stored and who owns them. By moving shared content into SharePoint, organizations can improve collaboration, strengthen governance, and reduce the risk of losing access to critical information when an employee's account reaches the end of its lifecycle.
Personal files belong in OneDrive. Shared files belong in SharePoint.