Microsoft 365 Archives in a Practical Test

Microsoft 365 Archive enables the archiving of entire SharePoint sites—and, starting in July 2026, individual files as well—and promises lower storage costs. But how significant are the potential savings in reality—and under what conditions does the solution work in practice? In this hands-on review, we analyze the use cases and limitations of Microsoft 365 Archive and show why choosing the right archiving approach is crucial for business success.

Many organizations are facing ever-increasing volumes of data in SharePoint Online. As a central platform for collaboration and document management, storage requirements often grow faster than the underlying governance structures. Clear rules for usage, structure, and lifecycles are often lacking.

Microsoft 365 Archive can help reduce costs in such scenarios—but only if certain requirements are met. Inactive or decommissioned sites must be clearly identifiable. Usage scenarios should be clearly separated from one another, and lifecycles must be defined in a binding manner.

Only when these conditions are in place will the removal of sites from active storage yield a measurable economic benefit.

SharePoint Online provides a basic storage quota for each tenant. If this quota is exceeded, additional costs will be incurred for additional storage. As a rough guideline, 10 GB of SharePoint storage is allocated per user license.

This is exactly where Microsoft 365 Archive comes in: Rarely used or inactive SharePoint sites are removed from active storage and moved to an archive status. The amount of production storage used is reduced accordingly.

Archived sites and files are billed at significantly lower archive storage rates than active SharePoint sites. Costs are incurred only when active and archived storage combined exceed the client’s licensed quota. As a rough guide, archive storage costs about one-quarter of the cost of additional standard storage. Billing is usage-based (pay-as-you-go); the currently valid pricing is always decisive: official Microsoft pricing overview for Microsoft 365 Archive. This allows you to reduce ongoing costs without having to delete or permanently remove content.

The technical principle behind Microsoft 365 Archive is easy to explain: Entire SharePoint sites and individual files are moved from active use to archive status. Documents, metadata, versions, and permissions remain fully intact and unchanged.

Archived content remains within the Microsoft 365 environment but is accessible to end users only after reactivation. At the site level, they are simultaneously removed from active SharePoint search and the Copilot index. From a compliance perspective, however, the content remains fully preserved and can still be located and protected via eDiscovery—the legal evidence preservation feature in Microsoft 365—as well as through retention and confidentiality labels.

Decisions regarding archiving and reactivation at the site level rest entirely with the IT or SharePoint administration team. Administrators analyze the usage of SharePoint sites and identify suitable candidates, for example, after a project is completed or in cases of prolonged inactivity. Archiving is performed manually via the Microsoft 365 Admin Center or using the appropriate PowerShell commands. Administrators can select specific sites for archiving and initiate the process. Additionally, rules can be defined to implement the process partially or fully automatically and to manage it consistently. 

At the file level, some of the responsibility shifts to business users: Users with the necessary permissions can archive and reactivate individual files themselves. However, control over the scope of functionality—such as restricting or deactivating features on a per-site basis—remains with IT administration.

If an archived SharePoint site is needed again—for example, for follow-up projects, audits, or legal reviews—it can be reactivated at any time. Restoration is also performed via the Admin Center or automated workflows. Individual archived files can also be reactivated directly in SharePoint by users with read permissions.

After reactivation, the site—including all content and permissions—is once again available in active storage, as if it had never been archived. Reactivating files can take up to 24 hours; files from the last seven days are available immediately. There are no fees for reactivation itself. Once content is reactivated, it can only be archived again after a waiting period: 30 days for files and four months for entire sites.

At the site level, archiving and restoration are reserved for Microsoft 365 Archive administrators. Organizations must therefore decide how to automate these processes—at least in part—or make them indirectly available to business units.

Organizational or technical approaches help make archiving processes more efficient and scalable, for example by:

• Integration with the IT help desk or a ticketing system through which archiving and reactivation requests are submitted

• Provision of standardized application forms, for example via Microsoft Forms 

• Partially or fully automated workflows, for example, with Power Automate, for initiating administrative archiving processes 

Additionally, the Expiration process for Microsoft 365 groups in Entra ID, Microsoft’s identity and access service, to manage group and site lifecycles based on time and systematically identify potential candidates for archiving.

Classification: 
These approaches improve process control but do not replace true self-service archiving at the content level. Responsibility for site-based archiving and recovery remains with IT administration.

The economic benefits of the archiving solution can be calculated based on the cost structure and can be relatively easily translated into a return on investment (ROI) calculation. However, the biggest challenge with this solution lies within the company’s SharePoint or Microsoft Teams information architecture. 

If SharePoint sites or Teams are structured, assigned to use cases such as projects, and have a well-defined lifecycle, they are ideal for archiving with Microsoft 365 Archive.

The extent of potential savings in practice depends largely on the approach chosen. The difference between a purely site-level analysis and a granular, document-based analysis is enormous:

Site-Based Analysis

When considering only completely inactive SharePoint and Teams sites—that is, sites that have not been updated for more than twelve months—our project analyses often reveal a potential savings of approximately 2 terabytes.

Document-Based Analysis

If, on the other hand, all documents that have not been modified for several years are taken into account, the identifiable savings potential often increases many times over. In some analyses, a volume of approximately 20 terabytes was identified—representing a factor of about ten compared to the site-based analysis.

What the New File Archiving System Changes

This greater potential can, in principle, be realized through file-level archiving—however, the reduction in load only applies at the client level, not to individual site quotas. In search and ad hoc scenarios involving frequent access, however, the practical benefit remains limited, since archived content must first be reactivated before it can be opened.

Microsoft 365 Archive offers a clearly defined approach to cost optimization within SharePoint Online. However, depending on the initial situation, additional requirements may arise that go beyond mere storage in Microsoft 365.

Multi-Cloud and Digital Sovereignty

Alternative approaches become particularly relevant when archived data is to be stored outside the Microsoft ecosystem—for example, in Azure, AWS, Google Cloud, or in an organization’s own data center. For organizations with heightened sovereignty requirements, the ability to freely choose the storage location is a key criterion.

Large Data Sets and Version Histories

If a client’s storage quota is significantly exceeded or if rapid data growth is expected, scalable archiving solutions become increasingly important. SharePoint libraries that have grown over the years and contain extensive file versions are a frequently underestimated cost driver; cleaning them up can yield significant savings.

Compliance and Targeted Searchability

In regulated industries, there are often requirements for audit-compliant archiving or specified storage locations. At the same time, archived content should remain accessible in a controlled and configurable manner for SharePoint search, Microsoft Copilot, or eDiscovery—meaning it can be found specifically without burdening active storage. This is exactly where document-based solutions such as NAVOO® Smart Archive that make archived content available for search and Copilot via enriched stub files.

For companies with such requirements, supplemental archiving solutions that go beyond the capabilities of Microsoft 365 Archive may be a good fit.