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Microsoft 365 slashes storage capacity for shared accounts amid industry-wide shortages — 2TB limit to take effect after April 2027 The storage shortage is now hitting cloud vendors. Microsoft just made a major change to its storage policy affecting Microsoft 365 subscribers with shared accounts. According to the company, the Microsoft 365 Family, Premium, and Pro plans will move from an assigned 1TB of cloud storage for each user to a shared 2TB for all users. This means that a subscription shared across six users will have its total cloud storage capacity slashed by 66.6%. This change will take effect on subscription renewals after May 2, 2027, unless the subscribers change their plan earlier. Some affected subscribers might also receive bonus storage when their account switches to the share limit model, although the company did not mention its eligibility requirements. The company said it made this change so that the cloud storage allocation for Microsoft 365 subscribers will automatically go where it’s needed, and that individual users are less likely to hit individual storage limits. Aside from that, it also said that unused storage can benefit the entire family, and that any additional storage that the main subscriber purchases will benefit everyone. This new setup is indeed advantageous for subscribers who only have one power user that uses up the majority of the cloud storage capacity, while all the rest take up a fraction. It would also be cheaper for an individual who intends to use more than 1TB of cloud storage to just switch to the Microsoft 365 Family plan (which costs $129.99 annually) instead of getting the Microsoft 365 Personal plan ($99.99 annually) and paying an extra $9.99 per month or $119.88 per year to bring their total cloud storage capacity to 2TB. However, if you have four users under one account using 500GB each, you will be forced to purchase additional capacity, starting at $1.99 per month for 200GB. While Microsoft hasn’t increased the prices of its subscription, this move simultaneously reduces the burden on its storage servers while forcing accounts with multiple large users to purchase storage separately. This seems like a reaction to the storage shortage hitting the industry, with hard drive prices surging by 46% from September 2025 to January 2026. Enterprise SSDs have been hit hard, too, with 30TB drives now costing $22,600 while supply remains sold out until 2027. Affected users could change their cloud storage providers, but even Google has been affected, with the company cutting the free cloud storage limit from 15GB to 5GB pending extra security measures. Even Backblaze, which offers “unlimited” backups, updated its terms of service to potentially throttle or terminate accounts that exceed “typical usage patterns” or “places an undue burden.” Users who have grown tired of paying monthly to secure their data could alternatively set up a NAS and populate it with the best hard drives — although this might be pricey in the short term and requires some setup, it could potentially save you hundreds, if not thousands, of dollars in the long run. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds. Get Tom's Hardware's best news and in-depth reviews, straight to your inbox. Jowi Morales is a tech enthusiast with years of experience working in the industry. He’s been writing with several tech publications since 2021, where he’s been interested in tech hardware and consumer electronics. - hotaru251 "As you know we, MS, and many other tech corpo are hoarding every drop of nand we cant get our greedy hands on....and due to this we are cutting your storage for the product you pay for. Thank you for being our stupid cash cows" - MSReply - Misgar "The company said it made this change so that the cloud storage allocation for Microsoft 365 subscribers will automatically go where it’s needed, and that individual users are less likely to hit individual storage limits." "go where it's needed" makes it sound as if Microsoft set aside the entire hard disk allocation for each account, on the premise that everyone will use their entire allowance. Surely Microsoft follow airline practice where they over-book seats on some flights, assuming there will be some "no shows". Reducing space entitlement means more people are likely to run out of room. Good business practice but poor marketing policy, if it annoys too many customers. Still, "times is 'ard". This means that a subscription shared across six users will have its total cloud storage capacity slashed by 66.6%. If Microsoft reduced 365 subscriptions by two thirds, that would even things up. Mind you, I live in cloud cuckoo land, so perhaps it's unlikely. Reply - adamboy64 Wow, the timing is awesome as I was looking to move away from OneDrive to a cheaper option as I've reached 1TB. Now I can hold off another couple of years. Great scenario for an account with a sole user.. I admit it's a pretty tough pill to swallow otherwise. Reply
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