Demystifying Storage in Microsoft 365

When do I use SharePoint? What about OneDrive? How does Teams fit into the equation? I’m so confused!

It’s a familiar narrative for end users and IT departments alike. There’s no doubt that for some of you reading, none of what I’m about to say will come as a surprise. For those decision makers or IT teams needing a little perspective on the solutions available as part of the Microsoft 365 platform, hopefully this provides!

A Birdseye View

At their core, SharePoint Online, OneDrive for Business and Teams are served by the same underlying storage platform – SharePoint Online. SharePoint Online itself is something you’ll have no doubt have had experience with before, whether you realised it or not. After all, it’s not a new product. Commonly, it has been implemented to provide company Intranets or act as a content management system, storing data across Document Libraries and Lists.

SharePoint Online

Within the SMB scope, it’s commonly deployed with one of two focuses: a Communication Site designed to share information across a group of people within your organisation, or a Team site created to provide a collaboration springboard to a team. Additional Document Libraries and Lists for storage can be added, as well as tools such as news feeds and calendars.

A SharePoint site is not bound to any one specific user either. If a user is deleted from the organisation, the SharePoint site remains as-is, though you may need to specify administrator access for others.


There are two terms to wrap your head around: Teams as the product, and a Team within that. Teams acts as the hub for collaboration, bringing together the tools like Planner, SharePoint Online, and OneNote, as well as all of your favorite third party apps into a single application while providing rich voice, video and text based communication tools.

However, there’s always been a question of how you define a Team. What do Microsoft say a Team should look like? The answer? They don’t. A Team within Teams can be any group of people (including external users), whether they’re department focused, project focused or even a committee from across the organisation.

When you create that Team within Teams, you’re creating an Office 365 Group – a collection of Microsoft 365 resources tied together. When this occurs, it spins up a SharePoint Online Team Site, storing files uploaded to a Channel within the default Document Library of the Team Site.

You can see this below with our Team called Understanding Storage. The Team has a SharePoint Online Team Site to support its storage and each of our channels; General, Channel 2 etc. have their files within the Documents Documents Library.

Understanding Storage Team in the Teams app
Understanding Storage ‘s SharePoint Online Team Site

From a data life cycle management perspective, preservation and retention policies applied to SharePoint will apply to the documents and files within these Teams channels as they are at the end of the day, data within SharePoint Online. This can cause some issue with deleting a Team as their storage may not delete correctly.

OneDrive for Business

If SharePoint Online and Teams are designed for organisational storage and group collaboration, OneDrive for Business is your own little corner of the storage ecosystem. It’s built for users to store their own work related data, similar to personal network drives in some businesses.

Data can be shared using the same mechanisms as SharePoint Online, spanning both internal and external recipients. Those sharing policies are controlled through the OneDrive Admin Center.

Control your external sharing

When a user is deleted, access to their OneDrive data can be granted to another user such as their manager before it is deleted after a default 30-day period.

How much does it all cost?

Despite sharing a common underlying platform, costs are split into two parts. Firstly, in small and medium businesses, OneDrive for Business is licensed per user with allowances for 1,000 GB of data for each user (not pooled across the tenant). Whether or not users have access to that full figure is up to you and defined within the OneDrive Admin Center.

OneDrive Admin Center

SharePoint Online on the other hand is a little different with a base of 1,000 GB for the tenant and an additional 10 GB for each appropriately licensed user. For example, if you have 50 staff, all licensed for Microsoft 365 Business Premium, your storage allowance in SharePoint Online will be 1,500 GB across all SharePoint Online sites including any Teams.

Personally not a huge SharePoint storage user

You can check on your current usage by going to the SharePoint Admin Center or by viewing the usage reports found in the Microsoft 365 Admin Center. It may be a good idea to restrict the usage via Site Storage Limits in the SharePoint Admin Center.

For larger tenants, it’s a slightly different story for OneDrive. With most x3 and x5 SKUs as well as SharePoint Online Plan 2, the 1000 GB limit per user can be increased to 5,000 GB (and beyond, subject to request through Microsoft).

Where do we use what?

There isn’t any one correct answer to the question. The below table outlines a few common data types, however it is by no means a definitive answer.

Corporate polices or proceduresSharePoint Communication Site
Project or department specific data (budgets, project plans, general documents ect)Team or SharePoint Team Site
Work related data that doesn’t need to be regularly sharedOneDrive for Business
Non-work related data (personal photos & documents)Personal storage
Where do we store what?

Other Considerations

Folder Redirection

One of the most common-use cases for OneDrive for Business is replacing Windows Folder Redirection, removing the associated hardware costs and simplifying deployment. I’ve written a separate article on enabling this feature through Intune here if you’d like to learn more.

Windows 10 1909 OneDrive user interface

Azure Dynamic Groups

New user on-boarding is always a complicated process, ensuring access where required is enabled. Options like single sign-on have greatly reduced this management overhead, however one often overlooked feature is Azure’s Dynamic Groups. You can use these to automatically assign access to both SharePoint Online sites, as well as Teams.

Azure Dynamic Groups

It’s not a file server

One commonly misunderstood and misused feature is the ability to sync a Document Library (or OneDrive for Business shared folder). This uses the OneDrive for Business Sync Client to maintain a copy of the library locally on the machine; changes made by users are then synced while the device is connected to the internet.

SharePoint Online Document Library web interface
Windows File Explorer with a Document Library

Issues arise if you attempt to directly replace the use of network shares with Document Libraries without understanding the limitations. I won’t deep-dive into the sync client in this article however a few key limitations to be aware of include:

  1. A maximum of 300,000 files can be synced by the client before you’ll encounter user experience issues
  2. A maximum of 100,000 files per Document Library (despite the official documentation suggesting otherwise)
  3. Maximum file sizes of 15GB with certain characters prohibited
  4. Not all file types are supported for differential sync, meaning database files should not be stored using the platform.

If you want to quickly replicate the experience of network shares in the cloud, have a look at Azure Files instead however beware they too have their own limits.

Smarter Email Attachments

One my biggest pet peeves are users who turn to third-party cloud storage such as Google Drive and Dropbox to get around limits on attachment sizes in emails. While Exchange Online does support up to 150MB per message, third parties may not, and email was never designed for such large data transfers in the first place.

This is where OneDrive steps in, and as a part of the new Outlook experience, asks users if they want to provide a link to the file or simply attach a copy. This is where your sharing policies (discussed here) come into play – users may not realise the link they’re sharing is providing edit access to that document.

Outlook attachment user experience

Final Thoughts

With three unique storage platforms available within the platform, it’s a lot to wrap your head around. However, I hope the takeaway from this is a better understanding of what to use when, or even ideas on next steps you can take within your organisation.

ScopeOrg wide, project or departmentProject or departmentPersonal
PermissionsUser / admin User / admin User
LicensingOrg wide poolOrg wide poolPer user
Retention Policy?YesYesYes

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