Microsoft Has Retired Standalone SharePoint Online and OneDrive for Business Plans

Microsoft has pulled the plug on four of its standalone SKUs: SharePoint Online Plan 1 and Plan 2, and OneDrive for Business Plan 1 and Plan 2. If your organisation buys any of these on their own, rather than as part of a Microsoft 365 suite, you have a runway of about three years to move, but some of the decisions need to be made much sooner than that.

Here's what's changing and where Microsoft's own transition story still has gaps.

The short version

All four standalone plans are being retired: SharePoint Online Plan 1 and 2, and OneDrive for Business Plan 1 and 2. No new purchases are possible anymore, though existing customers can keep renewing until January 2027. From January 2027, renewals will no longer be possible, and contracts already in place simply will run until they expire. Full retirement lands in December 2029, when the plans will stop working entirely.

Microsoft's suggested alternatives are Microsoft 365 suites, "capacity packs," and pay-as-you-go storage, but only the suite option has published pricing so far. Organisations using standalone OneDrive as a cheap storage top-up for frontline workers are the most exposed, since the natural suite upgrade path costs several times more.

The timeline

Microsoft announced the retirement on 28 January 2026, though only as a Partner Center advisory rather than a customer-facing Licensing News post. End of Sale occurred on 31 May 2026, so now customers can no longer buy standalone plans, though existing customers can still renew. End of Life follows in January 2027, when renewals stop altogether and existing contracts simply run to term. End of Service, the point at which the plans are fully retired and stop working, is December 2029.

It's worth flagging that this announcement has, so far, only surfaced through Partner Center. It hasn't appeared on Microsoft Licensing News, and Microsoft's own Microsoft 365 plan-options documentation still lists all four plans as available standalone options. If you're relying on official channels to catch this, there's a real chance it slips past you.

What's actually being retired

SharePoint Online Plan 1 is a cheaper way of providing just SharePoint access to a tenant, and adds 10 GB SharePoint to the tenant pool per seat, along with 1 TB of OneDrive storage per licenced user. SharePoint Online Plan 2 offered the same base allowance plus expandable OneDrive storage, 1 TB by default, but expandable up to 25 TB.

OneDrive for Business Plan 1 is a cheaper way of providing a user with a OneDrive account (or even just extra storage for frontline workers) when compared to the full Microsoft 365 licences. OneDrive for Business Plan 2 was marketed as "unlimited individual cloud storage," which in practice meant the same 1 TB default, expandable up to 25 TB.

Microsoft had already been quietly walking Plan 2 back before this announcement: it disappeared from the SharePoint pricing page in 2023, and OneDrive for Business Plan 2 vanished from the OneDrive service description between December 2024 and November 2025. Plan 1 for both products was still listed on Microsoft's pricing pages as of May 2026, so this retirement announcement is really just making official what Plan 2 customers had already been experiencing by omission.

There's also no direct replacement for Plan 2's storage ceiling. The "unlimited" tier is gone from current documentation, and Microsoft 365 E3 and E5 top out at 1 TB expandable to 5 TB, and the old 25 TB support-request tier simply isn't there anymore.

Microsoft's recommended alternative

Microsoft points customers toward three options: moving to a Microsoft 365 suite (Business Basic, Business Standard, Business Premium, E3, or E5), or buying capacity packs, which cost significantly more.

The real cost: a frontline worker case study

The financial impact lands hardest on organisations that used standalone OneDrive as a low-cost storage top-up for frontline staff. Microsoft 365 F1 and F3, the standard frontline licences, only include 2 GB of OneDrive storage per user. Pairing F3 with a standalone OneDrive Plan 1 was a common, cheap way to get those users to a usable 1 TB. That combination is exactly what's disappearing.

Staying on F1 or F3 without a OneDrive add-on means storage stays capped at 2 GB since the bolt-on option is gone. Moving to Microsoft 365 E3 costs significantly more, a jump of roughly 300% versus F3 alone. Microsoft 365 E5 costs about 500% more than F3 alone. Capacity packs are significantly more expensive than the old Plan 1 and Plan 2 licences.

Other storage levers worth knowing about

A few existing Microsoft mechanisms are relevant if you're trying to bridge the gap before a suite migration, or just trying to understand how storage is metered today.

Office 365 Extra File Storage lets you buy additional SharePoint storage in 1 GB increments through the admin centre. This costs roughly 16p per GB per month.

Microsoft 365 Archive offers cold storage for inactive SharePoint sites at around 4p per GB per month, charged only once archived-plus-active storage exceeds your tenant's included allowance. Reactivation has been free since March 2025, though a reactivated site can't be re-archived for four months.

Unlicensed OneDrive accounts don't disappear immediately either. When a licence is pulled, the account goes read-only at day 60 and is archived at day 93. If pay-as-you-go billing is enabled on the tenant, the account is kept rather than deleted, billed at around 4p per GB per month, with reactivation costing around 45p per GB. If PAYG isn't enabled, standard deletion begins instead.

Finally, it's worth understanding how the SharePoint storage pool works. Most plans pool storage as 1 TB base plus 10 GB per licensed user. Frontline SKUs - F1, F3, and Office 365 F3, get a flat 1 TB tenant total instead, and standalone OneDrive licences only contributed 500 MB each to the tenant pool.

None of these are replacements for the retiring plans, but they're useful to understand if you're trying to squeeze more runway out of your current setup.

What this means for you

If your organisation is still using any of these four plans, the practical questions to answer are worth working through now before your next renewal. How many users are on standalone SharePoint or OneDrive plans, and what are they actually using the storage for? Would a full Microsoft 365 suite upgrade be justified by the other features you'd gain, or are you paying for a lot of suite you won't use just to keep storage? If frontline workers are affected, does an E3 or E5 upgrade make sense? Or is it worth purchasing one of the new capacity packs?

There's no single right answer here, as it depends heavily on your existing suite mix, device management setup, and how much storage your users genuinely need. But the earlier you model the cost, the more options you'll have before your subscription renewal.

As a Microsoft partner, we can help you work through these options and plan a transition that fits your existing licensing and device management setup, don’t hesitate to get in touch if you'd like a hand.