Microsoft 365 Departed User Archiving: The Complete Guide for Enterprise IT

by Mark | Apr 6, 2026 | Office 365

Microsoft 365 Departed User Archiving

When an employee leaves your organisation, a clock starts ticking. Microsoft begins deleting their data — OneDrive files, Exchange Online emails, Teams conversations — within days of their account being disabled. For most large enterprises this is happening continuously, quietly, and without IT teams necessarily knowing until someone asks for data that no longer exists.

This guide covers everything IT leaders and administrators at large enterprises need to know about Microsoft 365 departed user archiving: what data is at risk, how long you have before it is deleted, what Microsoft’s native tools can and cannot do, how to automate the entire archiving process, and how to make a decision that satisfies your compliance team.

What Is Microsoft 365 Departed User Archiving?

Microsoft 365 departed user archiving is the process of capturing and preserving an employee’s OneDrive, Exchange Online, and Teams data when they leave your organisation — before Microsoft’s deletion timelines expire and that data is permanently lost.

Unlike standard document archiving, departed user archiving is triggered by a people event rather than a content policy. The moment an employee’s account is disabled in Microsoft Entra ID, the clock starts. Without an archiving solution in place, your organisation has a narrow window to capture that data before it is gone forever.

For large enterprises with ongoing staff turnover, this is not a one-time exercise. It is a continuous operational requirement that affects every departure — resignations, redundancies, retirements, and contract endings alike.

What Data Is at Risk When an Employee Leaves?

OneDrive for Business

OneDrive files belonging to a departed user are retained for 93 days after their account is disabled. After that Microsoft permanently deletes them. During the 93-day window an administrator can access and copy the files, but this requires manual intervention before the deadline.

Exchange Online

Exchange Online mailboxes follow a different timeline. If no licence or retention policy is in place, the mailbox is typically soft-deleted 30 days after the account is disabled and permanently deleted 30 days after that. Emails, calendar items, contacts, and tasks are all at risk.

Microsoft Teams

Teams channels the departed user participated in remain accessible to other team members. However, private chat messages and files stored in the departed user’s personal OneDrive are subject to the same deletion timelines as their OneDrive content. Once those timelines expire, the chat history and associated files cannot be recovered.

Microsoft’s Default Deletion Timelines

Data Type	Default Retention After Account Disabled	Permanently Deleted
OneDrive files	93 days	Day 93
Exchange Online mailbox	Soft-deleted at 30 days	Permanently deleted at 60 days
Teams private chat history	Tied to OneDrive deletion	Day 93
Teams channel content	Retained while channel exists	When channel or site is deleted

Why Manual Departed User Data Management Fails at Scale

Most organisations handle departed user data in one of three ways, all of which carry significant cost or risk.

Keeping licences active

Keeping a Microsoft 365 licence active after an employee leaves preserves all their data indefinitely. The problem is cost. At $36 per user per month for Microsoft 365 E3, retaining 100 departed users on active licences for an average of three months while IT handles manual data management costs over $10,000 per year in unnecessary licence spend — and that is before accounting for the IT time involved.

Manual data export

IT teams can manually export OneDrive files, Exchange mailboxes, and Teams data before an account is disabled. The problem is scale and consistency. For enterprises processing dozens of departures per month, manual export is time consuming, error prone, and relies entirely on IT remembering to do it before the account is disabled or the deletion window closes. One missed departure can mean permanently lost data.

Microsoft retention policies

Microsoft Purview retention policies can prevent data from being deleted after an account is disabled. However they require careful configuration, add complexity to your Purview environment, do not necessarily allow you to remove the licence, and do not provide a searchable, organised archive of departed user data that HR, legal, or management teams can easily access.

What a Proper Departed User Archiving Solution Does

A purpose-built Microsoft 365 departed user archiving solution automates the entire process — detecting departures, capturing data, organising it into a searchable archive, and confirming completion so licences can be safely removed. Here is what it should deliver:

Automatic detection of disabled accounts in Microsoft Entra ID with no manual trigger required
Archiving of OneDrive, Exchange Online, and Teams data in a single automated workflow
Storage of archived data in your own Azure Blob Storage — not a third-party vendor’s infrastructure
Searchable, organised archive accessible to authorised HR, legal, and IT staff
Confirmation notification when archiving is complete so licences can be removed immediately
Full audit trail of every archiving action for compliance and governance purposes
Scalability to handle high volumes of departures without additional IT workload
Compatibility with Microsoft Purview legal holds and eDiscovery

How Chipmunk Automates Microsoft 365 Departed User Archiving

Chipmunk is SmiKar’s purpose-built Microsoft 365 departed user archiving solution. It monitors your Microsoft Entra ID continuously and automates the entire archiving workflow the moment an account is disabled.

Automatic departure detection

Chipmunk monitors your Entra ID for accounts that have been disabled or deactivated. The moment a departure event is detected, Chipmunk creates an archiving job automatically. No manual trigger is required from your IT team.

Complete data capture

Chipmunk captures the full contents of the departed user’s OneDrive, their complete Exchange Online mailbox including sent items, calendar, and contacts, and their Microsoft Teams chat history and associated files. All three data sources are captured in a single automated workflow.

Data written to your own Azure Blob Storage

Captured data is processed through SmiKar’s secure Chipmunk appliance and written directly into your own Azure Blob Storage account in your own Azure tenant. Your data never sits in SmiKar infrastructure — it goes straight into storage you own and control. Chipmunk organises archived data by user, making it straightforward to locate a specific user’s data when needed.

Licence removal confirmation

Once archiving is complete, Chipmunk sends a confirmation notification to your nominated IT administrators. The Microsoft 365 licence can then be safely removed — typically on the same day the account is disabled — with complete confidence that nothing has been lost.

Searchable, restorable archive

Archived data is stored in a structured, searchable format. Authorised HR teams, legal teams, and IT administrators can search across completed archives, export specific items for compliance or legal purposes, and restore data to another active user or a secure destination when needed.

Microsoft 365 Departed User Archiving for Compliance

For organisations in regulated industries, retaining departed user data is not optional. A range of regulatory frameworks create scenarios where access to former employee data is essential months or years after their departure.

GDPR — organisations must be able to respond to data subject access requests for former employees and demonstrate lawful basis for retention
Financial services — FCA, MiFID II, and similar frameworks require retention of communications for specified periods
Healthcare — clinical and administrative communications must be retained in line with applicable regulations
Employment law — records relevant to disputes, redundancies, and tribunal proceedings must be accessible
eDiscovery — legal proceedings may require access to former employee emails and files at any time

Chipmunk addresses all of these requirements. Archived data is stored with full integrity in your own Azure tenant, with a complete audit trail of every archiving action. Data can be exported in standard formats for legal proceedings, regulatory audits, and eDiscovery requests. Because all data resides in your own Azure tenant, data residency requirements are met by design.

The Cost of Getting Departed User Archiving Wrong

The financial risk extends well beyond unnecessary licence costs. Consider these scenarios:

A financial services firm is asked by the FCA to produce all communications from a specific employee over an 18-month period. If that employee left two years ago and their Exchange data was not retained, the firm cannot comply — and faces regulatory consequences that dwarf any licence savings.

A legal dispute arises involving a project managed by a former employee. The opposing party requests all emails and files related to the project. If the data was not archived before the deletion window closed, it cannot be produced — potentially undermining the organisation’s legal position.

An HR team needs to review a former employee’s communications as part of a grievance or tribunal proceeding. If the data was not preserved at departure, the investigation is compromised before it begins.

Chipmunk prevents all of these scenarios by archiving data automatically the moment the departure is detected — before any of these risks have time to materialise.

Frequently Asked Questions About Microsoft 365 Departed User Archiving

Q: What happens to Microsoft 365 data when an employee leaves? A: Microsoft begins deleting departed user data within days of an account being disabled. OneDrive files are retained for 93 days before permanent deletion. Exchange Online mailboxes are typically soft-deleted within 30 days and permanently deleted within 60 days. Teams chat history tied to the user’s OneDrive follows the same 93-day timeline. Without an archiving solution in place this data is permanently lost once the window closes.

Q: How do I archive a departed user’s Microsoft 365 data? A: The most reliable approach is an automated archiving solution like Chipmunk that detects account disablement in Microsoft Entra ID and automatically captures OneDrive, Exchange Online, and Teams data without any manual IT intervention. Manual approaches work but are time consuming, error prone, and do not scale for enterprises with ongoing staff turnover.

Q: Do I need to keep a Microsoft 365 licence active after an employee leaves? A: Not if you archive the data first. Chipmunk archives all OneDrive, Exchange Online, and Teams data before the licence is removed. Once archiving is confirmed complete the licence can be safely removed with no risk of data loss. For enterprises processing hundreds of departures per year, this licence saving alone typically covers the cost of Chipmunk many times over.

Q: Where is archived departed user data stored with Chipmunk? A: Archived data is written directly into your own Azure Blob Storage account in your own Azure tenant. Data is processed through SmiKar’s secure Chipmunk appliance but never stored in SmiKar infrastructure. You retain full ownership and control of all archived data.

Q: How long does it take to archive a departed user’s Microsoft 365 data with Chipmunk? A: Archiving typically completes within hours of the departure being detected, depending on the volume of data in the user’s account. Chipmunk sends a confirmation notification when archiving is complete so your IT team knows when it is safe to remove the licence.

Q: Can we search and access archived departed user data? A: Yes. Chipmunk stores archived data in a structured, searchable format organised by user. Authorised administrators can search across all archived user data, export specific items for legal or compliance purposes, and restore data to another active user or a secure destination. Access is controlled by role-based permissions.

Q: Is Chipmunk compatible with Microsoft Purview eDiscovery? A: Yes. Archived data is stored in your own Azure tenant and can be included in eDiscovery processes. Chipmunk maintains a full audit trail of every archiving action that supports legal hold and eDiscovery requirements.

Q: What is the difference between Chipmunk and Microsoft retention policies for departed users? A: Microsoft retention policies prevent data from being deleted but do not remove the requirement to maintain an active licence and add complexity to your Purview configuration. Chipmunk archives the data automatically, allows you to remove the licence immediately, and stores the data in your own Azure Blob Storage at a fraction of the ongoing licence cost. The two approaches can also be used together.

Automate Microsoft 365 Departed User Archiving with Chipmunk

Chipmunk monitors your Microsoft Entra ID and automatically archives OneDrive, Exchange Online, and Teams data the moment an employee account is disabled. Your IT team receives a confirmation and can remove the licence immediately. No manual work, no deletion risk, no ongoing licence costs.

See how Chipmunk can save you on your Microsoft Licensing Today

See how Chipmunk Works

Looking for an AvePoint Alternative for SharePoint Archiving?

by Mark | Mar 26, 2026 | SharePoint, Squirrel

AvePoint Alternative for SharePoint Archiving. Squirrel by SmiKar

AvePoint Opus is a capable platform. If your organisation needs to archive email, file servers, social media, and physical records alongside SharePoint it may well be the right fit.
But if your primary requirement is SharePoint Online storage cost reduction, and you want archived data stored in your own Azure Blob Storage account rather than a vendor-hosted environment, without a complex multi-module purchase and a lengthy provisioning process before you can archive a single document , Squirrel is worth a serious look.
This page gives you an honest, factual comparison of both products so you can make the right decision for your organisation.

Three Reasons Enterprise IT Teams Choose Squirrel Over AvePoint for SharePoint Archiving

Your archived data lands in your own Azure Blob Storage — not ours

Squirrel connects to your Microsoft 365 tenant and processes data through SmiKar’s secure Squirrel appliance. Archived documents are written directly into your own Azure Blob Storage account in your own Azure tenant. Your data never sits in SmiKar infrastructure — it goes straight into storage you own and control.

AvePoint Opus stores archived content in AvePoint-hosted Azure storage by default. Their Bring Your Own Storage option, which puts data into your own storage account, is priced higher per user per year than their standard plan.

For organisations in financial services, healthcare, government, or any sector with data residency requirements — paying extra to keep your own data in your own storage is a difficult position to justify to a compliance team. With Squirrel your archived data lands in your own Azure tenant as standard.

A focused setup engagement, not a drawn-out provisioning process

AvePoint’s own documentation recommends professional services for initial setup and configuration of AvePoint Opus. Their onboarding process involves a planning workshop, a provisioning phase, and a follow-up check-in four to six weeks later. Professional services are priced separately on application.

Squirrel includes a professional setup engagement to configure the environment correctly from day one. Our team works with you to get everything configured, tested, and running. Most enterprises are archiving within days of starting the engagement — not weeks into a provisioning process that has barely begun.
When your SharePoint storage warning is flashing at 95% capacity, the speed of that difference matters.

Purpose-built for SharePoint, not a platform trying to do everything

AvePoint Opus is an information lifecycle management platform covering SharePoint Online, Exchange Online, file servers, social media, physical records, and more. That breadth comes with corresponding complexity — multiple modules to purchase, a pricing structure that varies by user count and data volume across several components, and a substantial minimum commitment before the platform is operational.

Squirrel is purpose-built for one thing: SharePoint Online archiving. It does that one thing exceptionally well. The product is simpler to configure, faster to deploy, and easier for IT teams to manage on an ongoing basis. If your requirement is specifically SharePoint Online storage cost reduction a specialist tool built for that exact problem will outperform a broad platform every time.

Squirrel vs AvePoint Opus: Feature Comparison

Feature	Squirrel by SmiKar	AvePoint Opus
SharePoint Online archiving	Yes — core product	Yes — one module of many
Archived data in your own Azure Blob Storage	Yes — standard, no extra cost	No — AvePoint hosted by default. Own storage costs more
Document-level stub files in SharePoint	Yes	Yes — via ReCenter access link
Self-service user restore	Single click in SharePoint UI	Via separate ReCenter portal
Microsoft Copilot compatible archiving	Yes — Nutshell AI stub summaries	Not confirmed
Departed user O365 archiving	Yes — Chipmunk product	Partial coverage
Preservation Hold Library management	Yes — dedicated feature	Not a specific feature
Setup engagement	Focused — archiving within days	Lengthy planning and provisioning process
Typical time to first archive	Days	Weeks
Pricing model	Straightforward — platform fee plus per TB	Complex — multiple modules priced separately
Restore fees	None	Not publicly confirmed
Email archiving	No	Yes
File server archiving	No	Yes
Microsoft Partner	Yes	Yes
Purview and eDiscovery compatible	Yes	Yes

Which Solution is Right for Your Organisation?

Choose Squirrel if:

Your primary requirement is reducing SharePoint Online storage costs
You need archived data stored in your own Azure Blob Storage with no third-party data retention
You want to be archiving within days not weeks
You need departed user Microsoft 365 data archiving alongside SharePoint archiving
Your environment is Microsoft 365 and SharePoint Online focused
You want predictable straightforward pricing without multiple module purchases
You need Microsoft Copilot to remain effective across archived content via Nutshell AI stub summaries

AvePoint Opus may be a better fit if:

You need to archive email, file servers, social media, or physical records alongside SharePoint
You need a single platform vendor that also covers backup, migration, and governance across your entire Microsoft 365 estate
You already use AvePoint for backup or migration and want a single vendor relationship

We would rather help you make the right decision than win a deal that is not the right fit. If your requirement is specifically SharePoint Online archiving with data sovereignty, fast deployment, and straightforward pricing, request a Squirrel demo and we will show you exactly how it works and where your data goes, within 48 hours.

Built for SharePoint. Not Bolted On.

Squirrel is purpose-built for SharePoint Online archiving — not one module inside a platform trying to do everything.

If your problem is SharePoint storage costs, a product built exclusively for that problem will always outperform a broad platform with SharePoint as one of many features.

A Specialist Tool for a Specific Problem

Ready for a Demo?

DISCLAIMER:

All information about AvePoint Opus on this page is based on publicly available sources including AvePoint’s website, Azure Marketplace listing, and published pricing documentation, and is accurate to the best of our knowledge at the time of publication. Product features and pricing may change. If you believe any information is inaccurate or out of date please contact us and we will update it promptly. AvePoint and AvePoint Opus are trademarks of AvePoint Inc. SmiKar Software is not affiliated with or endorsed by AvePoint.

SharePoint Online Archiving: The Complete Guide for Enterprise IT

by Mark | Mar 25, 2026 | Uncategorized

SharePoint Online Archiving: The Complete Guide for Enterprise IT

If your SharePoint Online storage costs are climbing, your document libraries are slowing down, or your compliance team is asking hard questions about where your data is — you need a SharePoint archiving strategy.

This guide covers everything IT leaders and administrators at large enterprises need to know about SharePoint archiving in 2026: what it is, how it works, what Microsoft’s own tools can and cannot do, what to look for in a third-party solution, and how to make a decision that holds up under compliance scrutiny.

What is SharePoint Archiving?

SharePoint archiving is the process of moving inactive documents, files, and sites out of SharePoint Online into lower cost storage while keeping them accessible to users and compliant with your organisation’s retention policies.

The key distinction from simply deleting files is that archived content is preserved rather than removed. Users can still find archived documents through SharePoint Search and restore them on demand. IT teams gain the storage reduction and cost savings. Compliance teams retain the audit trails and retention controls they need.

In practice, most SharePoint archiving solutions work by moving content to Azure Blob Storage, which costs significantly less per GB than SharePoint Online primary storage. A lightweight placeholder called a stub file stays in the original SharePoint location, retaining the document name and metadata so end users experience no disruption.

Why Large Enterprises Need a SharePoint Archiving Strategy

SharePoint Online includes a base storage allocation with your Microsoft 365 subscription, but for large enterprises this runs out quickly. Microsoft charges for additional storage at a rate that is substantially higher than equivalent Azure Blob Storage costs. As organisations accumulate years of documents, project files, and team site content, the majority becomes inactive but continues consuming expensive primary storage at the same rate as your most accessed files.

Research consistently shows that around 68% of enterprise data is never accessed after it is created. In a large SharePoint environment, this means the vast majority of your storage costs are being spent on data nobody is using.

The storage cost problem

Microsoft 365 tenants receive 1 TB of SharePoint storage plus 10 GB per licensed user. For an organisation with 1,000 users that is 11 TB of included storage, which sounds substantial until you account for document versioning, the Preservation Hold Library, Teams file storage, and years of accumulated content that nobody has reviewed or deleted.

Once you exceed your included allocation, Microsoft charges for additional SharePoint storage. The cost per GB is significantly higher than Azure Blob Storage Cool tier, which is where most SharePoint archiving solutions move your inactive data. For organisations managing several terabytes of inactive content, the monthly saving from archiving is substantial and compounds over time.

The performance problem

SharePoint Online performance degrades as document libraries grow. Large libraries with tens of thousands of files experience slower search, longer page load times, and higher indexing overhead. Microsoft itself recommends keeping individual document libraries under 300,000 items for optimal performance. Many enterprise environments significantly exceed this threshold.

Archiving inactive documents out of primary SharePoint storage directly improves performance for active users. Smaller libraries index faster, search returns more relevant results, and the platform feels faster overall.

The compliance problem

Many industries require organisations to retain documents for defined periods under regulations including GDPR, HIPAA, FCA rules, and sector-specific standards. Keeping all of that data in expensive SharePoint Online primary storage for seven years or more is not financially viable. But deleting it early is a compliance risk.

A well-implemented SharePoint archiving solution provides a third option: move the data to lower cost storage while preserving all metadata, permissions, and audit trails. The data remains legally accessible and discoverable through eDiscovery tools, but it no longer occupies expensive primary storage.

The Preservation Hold Library problem

One of the most common causes of unexpected SharePoint storage growth is the Preservation Hold Library. When retention policies are applied in Microsoft Purview, SharePoint quietly copies modified and deleted documents into this hidden library to preserve them for compliance purposes. For organisations with active retention policies, the Preservation Hold Library can grow to several times the size of the visible document library without IT teams realising it.

A SharePoint archiving solution that monitors and manages the Preservation Hold Library prevents this hidden storage sink from causing storage overages and unexpected costs.

How SharePoint Archiving Works

While the specific implementation varies between solutions, most SharePoint archiving tools follow the same core process.

1. Identify inactive content using lifecycle policies

The archiving solution scans your SharePoint environment and identifies content that meets your archiving criteria. This is typically based on last modified date, last accessed date, file type, document library, or SharePoint site. More advanced solutions use AI to analyse usage patterns and recommend thresholds based on your specific environment rather than requiring you to guess.

2. Move content to lower cost storage

Documents that meet the archiving criteria are moved from SharePoint Online to the target storage location, typically Azure Blob Storage Cool or Archive tier. The best solutions store archived data within your own Azure tenancy rather than a vendor-hosted environment, ensuring you retain full ownership and control of your data and that data residency requirements are met.

3. Leave a stub file in SharePoint

Rather than removing the document from SharePoint entirely, the archiving solution leaves a stub file in the original location. The stub retains the original file name, metadata, and folder path. Users searching SharePoint will still find the document. When they need the full file, a single click triggers the restore process and the document rehydrates from archive storage back into SharePoint, typically within seconds.

This stub file approach is what distinguishes purpose-built SharePoint archiving solutions from simply moving files manually to Azure Blob Storage. Without the stub, users have no way to find or restore archived content through the normal SharePoint interface.

4. Maintain audit trails and compliance controls

Every archiving and restore action is logged with full detail including document name, location, user, timestamp, and action taken. Archived documents retain all original metadata, permissions, and classification labels. This ensures the archived data remains legally discoverable and accessible to compliance and legal teams while no longer consuming primary storage costs.

Microsoft’s Native SharePoint Archiving Tools: What They Can and Cannot Do

Before evaluating third-party SharePoint archiving solutions, it is worth understanding what Microsoft’s own tools offer and where their limitations lie. There are two primary Microsoft options to consider.

Microsoft Purview retention policies

Microsoft Purview allows organisations to apply retention policies to SharePoint content, ensuring documents are kept for defined periods and then either deleted or moved to a review stage. These policies are well suited for compliance and legal hold requirements.

However, Purview retention policies do not reduce your SharePoint storage costs. Content subject to a retention policy stays in SharePoint Online primary storage, consuming the same quota at the same cost. The Preservation Hold Library, which Purview uses to preserve copies of modified or deleted documents, actually increases your storage consumption rather than reducing it. Purview solves a compliance problem, not a storage cost problem.

Microsoft 365 Archive

Microsoft 365 Archive is a newer service that does move SharePoint content to lower cost storage. It operates at the site level, archiving entire SharePoint sites rather than individual documents or libraries. As of early 2026, file-level granular archiving is in preview and not yet generally available.

The key limitation of Microsoft 365 Archive for most organisations is the user experience. When a SharePoint site is archived using Microsoft 365 Archive, it becomes completely inaccessible to end users. It disappears from SharePoint navigation, links to it stop working, and it is excluded from SharePoint Search entirely. Only administrators can access or restore it. There is no stub file approach and no self-service restore for users.

This makes Microsoft 365 Archive well suited for truly retired content that nobody needs to access. It is not appropriate for inactive content that users may still occasionally need to retrieve, which describes the majority of enterprise archiving requirements.

Purpose-built third-party solutions like Squirrel fill this gap by providing document-level archiving with stub files, self-service user restore, and full search discoverability, while still delivering the storage cost reduction that Microsoft 365 Archive offers.

What to Look for in a SharePoint Archiving Solution

Not all SharePoint archiving solutions are built the same. For large enterprises evaluating options, these are the criteria that matter most.

Document-level archiving with stub files

Avoid solutions that only archive at the site level. Enterprise environments contain a mix of active and inactive content within the same sites and libraries. You need a solution that can identify and archive individual documents based on usage data, leaving active content in place and keeping the user experience intact through stub files.

Data stays in your own tenancy

The archived data should be stored in your own Azure Blob Storage account within your own Microsoft Azure tenancy. Solutions that store your data in a vendor-hosted environment introduce unnecessary data governance risk, complicate data residency compliance, and create a dependency on a third party for access to your own documents. Your data should never leave your control.

Self-service restore for end users

If restoring an archived document requires an IT ticket, your helpdesk will become overwhelmed and users will quickly lose trust in the system. The restore process must be self-service, available directly within the SharePoint interface, and fast enough that users do not notice any meaningful delay.

Search discoverability after archiving

Archived documents must remain findable through SharePoint Search. If users cannot search for archived content, they will not know it exists and will create duplicate documents or assume the original has been deleted. The best solutions enhance archived content discoverability by embedding AI-generated summaries into stub files, ensuring search results remain meaningful even for content that has been archived.

Compliance and audit trail retention

All metadata, permissions, and classification labels must be preserved through the archiving process. The solution must maintain a complete audit trail of every archiving and restore action to support compliance audits, legal holds, and eDiscovery requests. Confirm compatibility with Microsoft Purview before deploying any archiving solution in a regulated environment.

Automated policy enforcement

Manual archiving is not a strategy. The solution must support automated lifecycle policies that run continuously in the background, identifying and archiving content that meets your defined criteria without requiring ongoing administrative effort. The best solutions use AI to refine these policies over time based on actual usage patterns rather than requiring you to set static date thresholds.

Transparent pricing

Some archiving solutions charge per restore, which creates a perverse incentive against users accessing their own archived content. Look for solutions with predictable pricing based on archived data volume, with no charge for restores. This ensures the cost of running the archiving solution is entirely predictable and does not increase as usage grows.

SharePoint Archiving and Regulatory Compliance

For organisations in regulated industries, SharePoint archiving is not just a cost reduction exercise. It is part of the data governance framework that keeps the organisation compliant with legal and regulatory obligations.

The key compliance requirements to address when implementing a SharePoint archiving strategy are retention period enforcement, data residency, audit trail integrity, and eDiscovery compatibility.

Retention period enforcement

Documents must be retained for defined periods under GDPR, HIPAA, FCA regulations, and other industry-specific standards. A SharePoint archiving solution can enforce these retention periods automatically, ensuring documents are preserved for the required duration and flagged for review or deletion when the period expires. This reduces the risk of documents being deleted prematurely or retained unnecessarily.

Data residency

Many organisations operate under data residency requirements that dictate which geographic region data can be stored in. A SharePoint archiving solution that stores data in your own Azure tenancy in your chosen region satisfies these requirements by design. Confirm that your chosen solution deploys in the same region as your Microsoft 365 tenancy and does not transfer data across regions without your explicit configuration.

eDiscovery and legal hold compatibility

If a document is subject to a legal hold in Microsoft Purview, your archiving solution must respect that hold and not archive or delete the document until the hold is lifted. Confirm that your chosen solution integrates correctly with Microsoft Purview eDiscovery before deployment, and test the legal hold behaviour in a non-production environment before going live.

Frequently Asked Questions About SharePoint Archiving

What is the difference between SharePoint archiving and SharePoint backup?

SharePoint backup creates a point-in-time copy of your environment for disaster recovery purposes. SharePoint archiving moves inactive content to lower cost storage to manage the data lifecycle and reduce ongoing costs. Backup is about restoring your environment after data loss. Archiving is about managing content you no longer need in primary storage but must retain. Most enterprises need both.

Does Microsoft 365 include SharePoint archiving?

Microsoft 365 includes retention policies through Microsoft Purview, which enforce compliance holds but do not reduce storage costs. Microsoft 365 Archive is a separate paid service that archives entire SharePoint sites to lower cost storage, but archived sites become inaccessible to end users and are removed from search. For document-level archiving with user-accessible stub files and self-service restore, a purpose-built third-party solution is required.

How much does SharePoint archiving reduce storage costs?

Organisations using purpose-built SharePoint archiving solutions typically reduce their SharePoint Online storage consumption by 60 to 85%. The exact saving depends on how much inactive content exists in the environment and which Azure Blob Storage tier archived content is moved to. Azure Blob Cool tier costs a fraction of SharePoint Online overage pricing per GB, and Archive tier costs even less for content that is rarely accessed.

Will users be able to find and access archived documents?

With a properly implemented SharePoint archiving solution, yes. When a document is archived, a stub file remains in the original SharePoint location retaining the file name and metadata. Users searching SharePoint will still find the document in results. Clicking on the stub file triggers the restore process and the document rehydrates from archive storage, typically within seconds. No IT involvement is required.

Is SharePoint archiving safe for compliance purposes?

Yes, provided the solution is implemented correctly. Archived documents must retain all metadata, permissions, and audit trails. The archiving solution must be compatible with Microsoft Purview retention policies and legal holds. Data should be stored in your own Azure tenancy to satisfy data residency requirements. A well-implemented archiving solution strengthens rather than weakens your compliance posture by enforcing retention policies automatically and reducing the risk of premature deletion.

What is a stub file in SharePoint archiving?

A stub file is a small placeholder that remains in SharePoint after a document has been archived. It retains the original document name, location, and metadata so the document still appears in search results and folder structures. When a user clicks the stub file, the archiving solution retrieves the full document from archive storage and restores it to SharePoint. The stub file approach ensures archiving is invisible to end users and requires no change to how people work.

How long does it take to implement a SharePoint archiving solution?

Implementation time varies by solution and environment complexity. SaaS-based solutions that deploy within your existing Microsoft 365 and Azure tenancy typically take one to two days to configure and go live. There is no on-premises infrastructure to install. The main configuration time is spent defining your lifecycle policies and deciding which SharePoint sites and libraries to include in the initial archiving scope.

Squirrel: Purpose-Built SharePoint Archiving for Large Enterprises

Squirrel is SmiKar’s enterprise SharePoint archiving platform. It automatically identifies inactive SharePoint documents and moves them to your own Azure Blob Storage account based on your lifecycle policies, leaving stub files in SharePoint so users experience no disruption.

Enterprises using Squirrel typically reduce their SharePoint Online storage costs by up to 85%. Archived documents remain fully searchable through SharePoint Search and Microsoft Copilot via Nutshell AI stub summaries. Users can restore any archived document with a single click, with no IT ticket required.

Squirrel deploys entirely within your own Microsoft 365 and Azure tenancy. Your data never passes through SmiKar infrastructure. All metadata, permissions, and audit trails are preserved through the archiving process, and Squirrel is compatible with Microsoft Purview eDiscovery and legal hold requirements

Up to 85% reduction in SharePoint Online storage costs
Document-level archiving with stub files and self-service restore
Data stored in your own Azure tenancy with no third-party access
AI-powered lifecycle policies and Nutshell AI stub summaries
Compatible with Microsoft Purview, eDiscovery, and legal hold
Typically live within one day with no on-premises infrastructure

Stop Overpaying for SharePoint Storage

Most enterprises are spending significantly more than they need to on SharePoint Online storage. Squirrel automatically moves your inactive documents to Azure Blob Storage, cutting your storage bill by up to 85% without disrupting a single user. Request a demo and we will show you exactly how much your organisation could save.

Ready to start saving on SharePoint costs?

How to Avoid the SharePoint Preservation Hold Library PHL Storage Trap

by Mark | Feb 9, 2026 | SharePoint

The hidden cost problem most leaders never see

Most executives assume that moving to Microsoft 365 simplifies cost control. Storage is “in the cloud”, usage is elastic, and governance is handled through policy.

In reality, many organisations face a very different experience. They invest heavily in retention policies to meet legal and regulatory requirements, yet their SharePoint storage costs continue to rise year after year, even after large cleanup programs.

The primary driver of this issue is the SharePoint Preservation Hold Library, commonly called the PHL. It is invisible to day to day operations, but highly visible in your storage bill.

This article explains why that happens, why traditional approaches often fail, and how a different model using Squirrel’s Recycle Bin Capture can deliver compliance without runaway costs.

Why retention can create financial risk

Retention policies are designed to protect organisations from legal exposure. That is sensible. What is less obvious is that these same policies can create significant financial risk if not designed carefully.

Every time a file is deleted, replaced, or modified in SharePoint, a preserved copy may be stored in the PHL. Over time this compounds into tens or hundreds of terabytes of hidden data that still counts toward your Microsoft 365 limits.

From a leadership perspective, this creates three problems.

First, costs become unpredictable. Storage grows in ways that are difficult to forecast or explain.
Second, governance appears strong on paper, but in practice it is inefficient. You are paying premium SharePoint prices to store material that no one actively uses.
Third, cleanups and migration programs do not deliver the expected return on investment because deleted data is still being preserved.

Why “just delete more” does not solve the problem

Many organisations try to control costs by removing old sites, deleting inactive Teams, or running bulk cleanups.

Under retention, this rarely works. Deletion simply moves content from visible SharePoint libraries into the hidden Preservation Hold Library. The tenant storage total often barely changes.

For a CIO, this is a classic mismatch between effort and outcome. Large governance projects consume time and resources but do not materially reduce cloud spend.

Where the real cost sits

SharePoint storage is among the most expensive storage you pay for in Microsoft 365. Keeping long term records there by default is essentially choosing a premium archive.

The PHL reinforces this pattern. It keeps everything inside SharePoint rather than allowing organisations to separate active collaboration from compliant record keeping.

The result is a structural cost problem, not a tactical one.

A different approach that aligns cost with risk

Squirrel’s Recycle Bin Capture offers a model that better aligns compliance risk with storage cost.

Instead of preserving every deleted document inside SharePoint, Squirrel monitors the SharePoint recycle bin across your tenant. After a configurable period, typically around seven days, deleted files are automatically moved to secure, low cost Azure Blob storage.

To keep this practical for users and administrators, Squirrel creates a dedicated SharePoint site, commonly called Recycle Bin Capture. For every deleted file, a lightweight stub is placed in this site.

This means records are still preserved and recoverable, but they no longer sit in expensive SharePoint storage. From a business perspective, you keep control without paying a premium for every byte.

Preservation Hold Library versus Squirrel Recycle Bin Capture

Dimension	SharePoint Preservation Hold Library (PHL)	Squirrel Recycle Bin Capture
Visibility	Hidden and difficult to measure	Fully visible and auditable via a dedicated site
Primary storage	SharePoint tenant storage	Azure Blob storage
Impact on Microsoft 365 limits	Increases tenant storage consumption	Does not inflate SharePoint limits
What drives preservation	Purview retention policy behaviour	User deletion to recycle bin
Timing control	Broad and policy driven	Precisely configurable (for example, after 7 days)
Recovery experience	Requires admin or eDiscovery workflows	Simple restore via SharePoint stub
Cost predictability	Hard to forecast	Highly predictable and measurable
Effect of cleanup programs	Often neutral or negative on storage	Material reduction in SharePoint storage
Compliance position	Native Microsoft retention mechanism	Valid retention pattern that preserves records externally
Long term scalability	Financially challenging	Economically sustainable

Why this matters to the executive agenda

For a CIO, this is not a technical debate. It is a strategic one.

Organisations need to retain information for legal and regulatory reasons, but they should not have to store that information in the most expensive platform available.

Squirrel’s model allows you to meet compliance obligations while materially reducing ongoing cloud costs. SharePoint becomes a collaboration environment rather than a de facto archive.

Equally important, costs become predictable. You can model Blob storage growth in a straightforward way, rather than guessing how the PHL might expand.

When the PHL still plays a role

Some industries require strict Microsoft retention controls regardless of cost. In those cases, the goal shifts from elimination to management.

Even then, moving inactive content out of SharePoint with an archiving tool like Squirrel reduces pressure on live storage and slows overall cost growth. It is a way to mitigate, rather than accept, the financial impact of preservation.

What strong governance looks like

Effective governance balances three things.

Compliance, ensuring you can demonstrate retention and retrieval when required.
Cost, ensuring you are not overpaying for storage you do not actively need.
Simplicity, ensuring your teams can actually find and restore information without complex legal workflows.
A recycle bin capture model supports all three.

The leadership takeaway

Deleting content does not reduce storage when retention applies.
The Preservation Hold Library can quietly become one of your largest cloud cost drivers.
Traditional cleanup programs often fail to deliver financial benefits.
A structured approach that moves preserved content to lower cost storage can achieve compliance and cost control at the same time.

Next steps for decision makers

If you are concerned about rising Microsoft 365 storage costs, it is worth reviewing how retention is currently implemented in your tenant.

We can help you estimate your existing PHL exposure, forecast future growth, and quantify potential savings using Squirrel’s Recycle Bin Capture.

This is not about abandoning compliance. It is about achieving it in a way that makes financial sense.

A Practical Checklist for Managing PHL Storage Growth

Audit your current Preservation Hold Library size — this is visible in the SharePoint admin centre under Storage metrics
Review which retention policies are generating the most PHL content — policies applied to high-churn libraries will generate disproportionate PHL growth
Assess whether all retained content genuinely requires primary SharePoint storage — content past its active phase can often be moved to lower cost archive storage without affecting compliance
Implement Squirrel’s Recycle Bin Capture to intercept deletion events before they generate PHL copies
Review versioning settings across your document libraries — excessive version limits are a major driver of PHL growth
Set up storage monitoring and alerts so PHL growth is visible to IT before it becomes a billing problem
Review retention policies annually — overly broad policies that apply to content that does not need to be retained create unnecessary PHL accumulation

Frequently Asked Questions About the SharePoint Preservation Hold Library Storage Trap

Q: Why does my SharePoint storage keep increasing even after a large clean-up? A: If retention policies or legal holds are active, deleted and modified files are copied to the Preservation Hold Library before removal. Clean-up exercises often trigger large batches of preservation events, meaning deleting a large number of files can actually increase total storage consumption rather than reducing it.

Q: Can I reduce Preservation Hold Library storage without disabling retention policies? A: Yes. Squirrel’s Recycle Bin Capture feature intercepts deletion events before they generate PHL copies, routing content directly to Azure Blob Storage instead. This reduces PHL growth without disabling or circumventing your retention policies or affecting compliance.

Q: Does the Preservation Hold Library count against my Microsoft 365 storage quota? A: Yes. PHL content consumes the same SharePoint Online storage quota as your active document libraries. It is one of the most common causes of unexpected storage overage charges because it grows silently and is not visible to regular users or most administrators.

Q: Why does the Preservation Hold Library grow faster than expected? A: The PHL captures not just deleted files but also every version of every modified document when retention is active. In high-churn environments — where documents are frequently edited, replaced, or deleted — the PHL can grow many times faster than the active library that generated it.

Q: Is content in the Preservation Hold Library accessible for eDiscovery? A: Yes. The PHL is specifically designed to make content available for compliance and eDiscovery purposes. Content in the PHL is retained in a tamper-resistant state and is accessible to compliance administrators through Microsoft Purview eDiscovery tools.

Q: How does Squirrel’s Recycle Bin Capture work? A: Squirrel’s Recycle Bin Capture monitors deletion events in SharePoint. Instead of allowing deleted files to pass through the standard recycle bin process and into the Preservation Hold Library, Squirrel intercepts them and archives them directly to Azure Blob Storage. A stub file remains in SharePoint for user access and compliance purposes, while the actual file sits in lower cost storage rather than in the PHL.

Squirrel Recycle Bin Capture cuts SharePoint costs without losing compliance.

Instead of letting the Preservation Hold Library quietly inflate your Microsoft 365 storage, Squirrel preserves deleted content in low cost Blob storage while keeping it easily recoverable in SharePoint.

Cut SharePoint costs with Squirrel Recycle Bin Capture

By moving deleted files to low cost Blob storage instead of leaving them in the Preservation Hold Library, Squirrel materially reduces ongoing Microsoft 365 storage spend while keeping records recoverable.

Want to see a Demo of Squirrel?

Preservation Hold Library

by Mark | Nov 9, 2025 | SharePoint, Squirrel

The Preservation Hold Library: The Hidden SharePoint Storage Cost No One Talks About

And How Squirrel’s Recycle Bin Monitoring Stops Storage Blowouts Without Breaking Retention

Most organisations assume that when files are deleted from SharePoint to reduce storage, the data is actually removed. It seems logical: delete the file, empty the recycle bin, and available space should increase. But in Microsoft 365 environments where retention or compliance policies are enabled, this is simply not what happens. Instead, SharePoint silently moves deleted or modified files into a hidden repository known as the Preservation Hold Library (PHL). This library is not visible to standard users, is rarely checked by administrators, and continues to grow silently in the background. And importantly, it consumes the same high-cost SharePoint storage as the primary site content.

This is why many organisations see storage usage rise even after large clean-up projects. In some cases, deleting old files actually increases total storage usage. And once the tenant reaches its allocated limit, Microsoft begins charging monthly overage fees that grow as storage continues to increase. For companies dealing with active collaboration, heavy file churn, or large historical project archives, the financial impact can escalate quickly.

Squirrel now provides a way to prevent this completely — without disabling retention, breaking compliance, or changing how users work. But before explaining how, we need to clearly understand what the Preservation Hold Library is and why it behaves the way it does.

Why the Preservation Hold Library Exists

Microsoft 365 is designed to support regulatory, governance, and legal protection standards. Many organisations are required to retain business records for a set period — often 2, 5, or even 7+ years — even if users attempt to delete or overwrite them. To enforce this, SharePoint does not allow permanent deletion when any of the following are active:

Retention Policies
Retention Labels
Litigation Hold
eDiscovery Hold

If a file is modified or deleted, SharePoint is obligated to keep the original, unaltered copy. That preserved copy must remain accessible for audit or legal discovery for the duration of the retention period. Rather than blocking users from deleting files—which would be disruptive—SharePoint allows the deletion to appear to succeed, but quietly stores the preserved version in the Preservation Hold Library, invisible to the person who deleted it.

The result is that the organisation stays compliant, the user continues working as normal, but storage consumption increases in ways that are neither obvious nor intuitive.

Why Storage Goes Up When Files Are Deleted

This is the part that causes the most confusion.

Let’s consider a simple real-world scenario:

A project team completes a body of work and decides to clean up hundreds of gigabytes of old documents. They delete the files from the library and even empty the recycle bin. The site now appears to be almost empty.

However, a week later the Microsoft 365 storage report shows that total SharePoint storage has gone up, not down.

This happens because every file that was deleted was automatically copied into the Preservation Hold Library. And if those files had multiple versions — which is common with documents that evolve over time — every one of those versions is also retained. So deleting 200GB of documents may easily result in 300GB+ being stored in the PHL.

The more aggressively users try to clean up data in a retention-controlled environment, the faster the PHL grows.

This is why many organisations see storage spike immediately after “data clean-up initiatives.”

Why This Becomes a Cost Problem

When your organisation exceeds its Microsoft 365 storage allocation, Microsoft charges for additional storage every month. These are not one-time charges — they accumulate indefinitely and increase as retained data accumulates.

Meanwhile, storing that same data in Azure Blob Storage costs a fraction of the price — often 20× to 100× cheaper depending on the tier.

Storage Location	Approx. Cost per TB/month	Notes
SharePoint Storage (Overage Billing)	$60–$120+	Cost grows continuously
Azure Blob Cool Tier	$1–$3	Same data, far lower cost
Azure Blob Archive Tier	$0.20–$1	For long-term retention data

So the problem is not just that the PHL grows — it’s that it grows in the most expensive place possible.

This is why many organisations see storage spike immediately after “data clean-up initiatives.”

Why Traditional Fixes Don’t Work

Most organisations try the obvious steps first:

Deleting old files
Emptying recycle bins
Asking users to clean their sites
Using third-party file cleanup tools
Manually exporting content to external drives

None of these work, because retention overrides deletion. As long as retention is active, SharePoint is obligated to preserve the file — whether or not users want it deleted.

This isn’t a technical problem.
It’s a governance rule.
So the solution must respect governance.

And that’s where Squirrel’s new feature comes in.

How Squirrel Stops the PHL From Growing (Without Breaking Retention)

Squirrel has always archived inactive content into low-cost Azure Blob storage while leaving a stub file behind in SharePoint so users can still open the document as if it were still stored there.

Now, Squirrel adds the ability to intercept deletions.

Recycle Bin Monitoring (New Feature)

When enabled:

A user deletes a file in SharePoint.
Squirrel detects the deletion.
Squirrel archives the file directly to your Azure Blob storage, under your retention policies.
Squirrel leaves a stub behind in SharePoint so users can still open the file in the same way as before.

The result:

The file is still retained (compliant)
The file is still accessible (stub handles retrieval)
But SharePoint never stores it in the PHL
Storage stops growing
Costs drop to a fraction of what they were

This does not disable retention.
This does not circumvent compliance.
This simply changes where the retained file lives.

Instead of being stored in Microsoft’s high-cost SharePoint database tiers, it is stored in your much cheaper Azure Blob storage, fully controlled by you.

Why This Is the Correct, Safe, Long-Term Strategy

This approach:

Respects retention rules
Preserves audit and discovery access
Prevents storage blowouts
Avoids manual cleanup cycles
Does not require retraining users
Does not change how people interact with files

Nothing about how users work changes.
Nothing about your compliance posture changes.
Only the storage location changes — and the cost of that storage drops dramatically.

Summary

Challenge	Why It Happens	Impact	Squirrel’s Solution
SharePoint storage keeps increasing	Deleted/modified files are preserved in PHL under retention	Tenant exceeds storage allocation and incurs monthly costs	Intercept deletions and archive files to Azure Blob
Cleanup does not reduce storage	Retention requires files to be preserved	Storage goes up, not down	Squirrel prevents files from entering PHL
Need to retain access and audit history	Compliance requires recoverability	Cannot bulk delete safely	Stub files maintain access while storage moves to Azure

Frequently Asked Questions

Q: Why does SharePoint storage increase even when files are deleted?

A: If retention policies or legal holds are active, SharePoint cannot permanently remove content. Instead, deleted files are copied into the Preservation Hold Library, which still consumes storage.

Q: Where is the Preservation Hold Library and why can’t users see it?

A: The PHL is a hidden system library. It is only visible to Site Collection Administrators and does not appear in normal document library views. Microsoft hides it to prevent accidental modification or deletion of retained records.

Q: Does emptying the Recycle Bin remove the files from the Preservation Hold Library?

A: No. The Recycle Bin is only the first stage of deletion. If retention is enabled, the file is preserved in the PHL even after the recycle bin is emptied. Storage usage does not decrease.

Q: If we turn off retention policies, will the PHL empty itself automatically?

A: No. Disabling a retention policy does not purge existing retained data. The files remain until the retention period expires or they are removed using a controlled remediation process.

Q: Can we delete or purge the Preservation Hold Library to reclaim storage?

A: Not while retention applies. Purging data still under retention is a compliance violation and can expose the organisation to legal and regulatory risk.

Q: Why does deleting old project sites or folders sometimes increase storage?

A: Because deleting large amounts of data triggers large batch preservation events, which can cause the PHL to grow significantly, especially when multiple versions of files are retained.

Q: Can we still meet legal and regulatory retention requirements if we archive data outside of SharePoint?

A: Yes, as long as the archived data is stored in a compliant, tamper-resistant, and retrievable format. Squirrel preserves metadata and access integrity while storing files in your Azure Blob Storage, which meets retention requirements.

Q: How does Squirrel prevent the Preservation Hold Library from growing?

A: Squirrel’s Recycle Bin Monitoring intercepts deletion events. Instead of letting the file fall into the PHL, Squirrel archives it directly to Azure Blob Storage and leaves a lightweight stub file in SharePoint for seamless access.

Q: Do users still access archived or deleted files in the same way?

A: Yes. When users click the stub in SharePoint, Squirrel retrieves the file from Azure and opens it normally. There is no change to user workflow and no retraining required.

Q: How much can we reduce storage costs by archiving instead of using the PHL?

A: Typically 20 to 100 times less, depending on the Azure storage tier. SharePoint storage overages are costly, while Azure Blob Storage is designed for long-term, low-cost retention.

Stop SharePoint Storage Blowouts Caused by the Preservation Hold Library

Squirrel intercepts deletions before SharePoint can store them in the Preservation Hold Library, archiving the file to your Azure Blob storage instead. Retention is preserved, access is maintained, and storage costs drop dramatically.

With Squirrel’s Recycle Bin Monitoring, deleted and modified files are captured and archived automatically — preventing the Preservation Hold Library from silently consuming expensive SharePoint storage.

Retention Without the Storage Cost

Want to reduce your SharePoint Storage costs?

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