Optimise Your Storage: Microsoft 365 Data Storage Best Practices

One of the great aspects of the cloud is that it is possible to have unlimited scalability. With this being said, your Microsoft 365 subscription includes a base capacity of storage, and once it is met you will either need to pay to increase the limit or delete data to be under the limit.

The amount of storage included is enough for most people, but it needs to be managed effectively to not waste space.

This article will explain the storage limits imposed by Microsoft, and best practices for managing storage in SharePoint and OneDrive, using Microsoft native tooling.

Understanding Microsoft 365 Storage Limits

Different Microsoft 365 subscriptions have different storage limits, but all have limits for OneDrive, SharePoint and Outlook.

Microsoft 365 Business Basic, Business Standard and Business Premium users have 1TB (1,000GB) of OneDrive storage. Microsoft 365 E3 and E5 users have 5TB of OneDrive storage and F1 and F3 users have 2GB of storage.

The majority of Microsoft 365 subscriptions have 1TB of SharePoint storage, plus 10GB per user. This capacity is shared across the entire organisation. For example, if an organisation has 75 employees, their SharePoint storage capacity is 1TB + (10GB*75) = 1.75TB.

Finally, most Microsoft 365 subscriptions have 50GB of Outlook storage, except for Microsoft 365 E3 and E5, which has 100GB of storage. This storage is used by the inbox, sent messages, and attachments.

Whilst there is a significant amount of storage capacity for each employee, poor management can mean employees reach their limit relatively quickly.

Best Practices for SharePoint Storage Management

Organising Your SharePoint Libraries

Creating a logical structure for SharePoint libraries will not only make it easier to find specific files, but it can also reduce the need for having duplicates of files in multiple places.

Typically, each department within an organisation should have its own SharePoint site. Within here, a logical hierarchy should be followed, for example, Sales/Europe/2025/Customer Proposals. This makes it easy to retrieve information, rather than having a folder per customer, and then having to copy the proposal to both folders.

It should be noted that SharePoint has a 250-character limit on file paths, so the hierarchy should not go too deep.

With the example above, a potential file name may be 202505 – companyName Proposal, but how could you easily find the file if an employee names it incorrectly and doesn’t include the company name?

That’s where metadata is important. Within SharePoint, it is possible to create custom meta-tags. For example, all files created from the Customer Proposals template could have a meta-tag for Company Name, which makes it much easier to find files.

Make Use of Version History

Before the days of cloud storage, it was common to create different versions of files (202505 – customerName Proposal v1.2.1.docx). This made it easy to revert to an older version of the file if needed, but it also created duplicates which would use storage.

With both OneDrive and SharePoint, this is no longer necessary as previous versions are automatically saved and it is possible to revert to an older version at any point in time.

This can significantly reduce the amount of data saved and should be considered if a ‘lift and shift’ migration is completed from an on-premises file storage solution to Microsoft 365.

Archiving and Deleting Old Data

There are many reasons why organisations need to keep files for a period of time, but if files are never deleted or archived, you may find that you have 10+ years of files being stored on SharePoint, taking up a significant amount of your storage capacity.

A temporary (and free) solution to this may be to add older files into a compressed ZIP folder to save on space, and to delete unnecessary files.

A more forward-thinking solution is to use a service like Microsoft 365 Archive or Azure Storage to archive files. Both solutions are very cost-effective and will mean that archive files do not use your SharePoint storage capacity, whilst still staying compliant.

Best Practices for OneDrive Storage Management

Structuring Your OneDrive Folders

Similar to SharePoint, by structuring your OneDrive folders logically, you can reduce the need for creating duplicates of files, and thus, using more storage than required.

Every person has their own method of file storage, but the most important thing is to stick to your method and not deviate from it.

If you have any very large files, such as videos or 3D models, it is recommended to keep these on your local device, unless you need to share them or collaborate on them.

Filter By Largest Files

If you’re nearing the limit on your OneDrive storage, you may need to delete files or move them onto your device to keep important files in the cloud.

If this is you, it is most time-efficient to delete or move larger files first, as 100 Word documents may be the same file size as 5 high-resolution photos.

You can find the largest files in your OneDrive by opening OneDrive and searching “size: >100mb” in the search bar. This will display all files that are over 100MB in size.

If you are deleting files, don’t forget to empty the recycle bin, as this also contributes to your OneDrive storage capacity.

Sharing and Collaboration Tips

One of the most helpful benefits of OneDrive is how it can be used to share and collaborate on files.

However, whenever you share a file or folder, you are permitting the person you are sharing it with to contribute to your OneDrive storage capacity.

When sharing large files, for example, a video, once the receiver has downloaded it, you may want to move it out of your OneDrive to save on space.

If you are working on a large PowerPoint presentation with your team, it may be more logical to store this file in your SharePoint library, so it doesn’t use your OneDrive storage capacity.

Leveraging Microsoft 365 Tools for Storage Optimisation

Set SharePoint Site Storage Limits

By default, any employee can create a SharePoint site that will have a theoretical limit of 25TB. However, unless your company has 2,400 employees, they will reach the company limit first. A single employee using this entire limit would also not be fair to the rest of the company.

For this reason, many organisations will implement automatic or manual site storage limits. The limits will differ depending on your organisation and what is necessary for your use case.

If you are working with an IT provider, they should be able to set your storage limits for you and manage storage effectively to avoid having to pay for additional storage.

Automating Storage Management with Power Automate

For advanced users or businesses that have specific requirements, it is possible to automate storage management using Power Automate.

The simplest form of automation may be that every time an employee uploads a large file to SharePoint they are sent an email reminding them of what are the best practices for using SharePoint.

More advanced automation may include moving files from SharePoint to Azure storage after a certain period of time passes, using conditional logic depending on the file and its location.

How We Can Help

Microsoft 365 has ample storage for most employees, as long as it is managed correctly. Managing this storage from an administration standpoint can be difficult, and time-consuming for in-house IT teams.

Working with a managed service provider can ease this burden by allowing us to create the rules and proactively manage storage limits so your employees can focus on what they do best. To find out more about how we can help, contact us today!