Stop paying for Microsoft 365 licenses

Stop paying for Microsoft 365 licenses

How to Stop Paying for Microsoft 365 Licenses After an Employee Leaves

When someone leaves your company, the natural step is to disable their Microsoft 365 account. But what many businesses don’t realize is that they often continue paying for that user’s license — just to retain access to their OneDrive files, Teams chats, and emails.

chipmunk dashboard

Over time, this adds up to thousands in unnecessary costs.

In this article, we’ll explain:

  • Why Microsoft 365 makes it difficult to offboard users without data loss

  • What happens to a user’s data when their license is removed

  • How to stop paying for ex-employee licenses while retaining access to critical data

  • A simpler, automated solution using Chipmunk

office 365 users tab

The Problem: You’re Still Paying for Departed User Licenses

 

When an employee leaves, their account is typically:

  • Disabled in Entra ID (formerly Azure Active Directory)
  • But the Microsoft 365 license remains assigned

Why? Because once the license is removed, Microsoft begins deleting that user’s data.

That means IT teams often keep licenses active just to preserve data — even if that data may never be used again.

If you’re paying $30/month for each departed user’s license, that’s:

  • 100 users = $3,000/month

  • 100 users = $36,000/year

And this is just to hold onto data that should already be safely archived.

What Happens to Microsoft 365 Data When a License is Removed?

 

Unless you’ve set up retention policies or manually archived the data, Microsoft will begin deleting user data after a license is removed.

Here’s what typically happens:

Service Retention After License Removal Outcome
OneDrive 30 days Files permanently deleted
Exchange Email 30–60 days Mailbox content deleted
Teams Chats Up to 93 days Chats and message history deleted

If you remove a license and haven’t backed up the data, you could permanently lose important files, emails, or conversations needed for handovers, audits, or legal compliance.

onedrive tab

Why This Is a Costly Problem?

 

Microsoft offers tools like retention policies and inactive mailboxes, but they are:

  • Difficult to configure correctly

  • Don’t cover everything (Teams chat is a common gap)

  • Often still require the license to remain in place

This means many organizations choose to keep paying for the license instead of risking data loss.

Over time, this becomes a hidden cost — one that can run into tens or hundreds of thousands of dollars per year, depending on your organization size and turnover rate.

The Right Way to Handle Offboarding: Archive Then Delete

 

The best solution is simple:

Archive all of the user’s data when they leave, then safely remove their license.

That means:

  • Downloading and saving their OneDrive data

  • Exporting all Exchange emails

  • Capturing Teams conversations

  • Storing the data securely for future reference

Doing this manually is time-consuming and error-prone. It also requires different tools for each data type, making it difficult to maintain consistency or ensure compliance.

email tab

Introducing Chipmunk: Automated Offboarding for Microsoft 365

 

Chipmunk is a purpose-built solution to solve this problem.

It automates the entire offboarding process by:

  • Detecting when a Microsoft 365 user is disabled in Entra ID

  • Automatically backing up their:

    • OneDrive files (with full folder structure)

    • Exchange emails (saved in .eml format)

    • Microsoft Teams messages (including private chats and attachments)

  • Uploading the data to your own Azure Blob Storage

  • Logging every action for full auditability

Once Chipmunk completes the archive, you can safely remove the license — no risk of data loss, no ongoing Microsoft billing.

How It Works (Step by Step)

  • A user is disabled in Microsoft Entra ID
  • Chipmunk automatically detects the change
  • It backs up OneDrive, Email, and Teams data
  • The archive is securely stored in your Azure Blob Storage
  • You delete the Microsoft license with confidence that nothing has been lost

No scripts. No retention policies. No risk.

archive restores

Built for Compliance and Peace of Mind

 

Chipmunk helps your organization meet data retention and compliance requirements across multiple regulatory frameworks, including:

  • ISO 27001

  • GDPR

  • HIPAA

  • SEC 17a-4

  • Microsoft Purview compatibility

By automatically archiving all content from disabled Microsoft 365 users and storing it securely in your own Azure tenant, Chipmunk ensures your data is fully retained, auditable, and under your control — without reliance on ongoing Microsoft licensing or complex configurations.

Summary: Don’t Let Data Loss or Licensing Waste Sneak Up on You

 

Without Chipmunk With Chipmunk
Continue paying $30+/user/month Remove license immediately after archiving
Manual exports or retention policies Fully automated archiving
Data gaps in Teams, OneDrive, Exchange All covered automatically
Compliance risk, audit blind spots Secure, logged, and audit-ready archives
smart ai search

Ready to Save on Microsoft 365 Licensing?

If your organization is still paying for ex-employee licenses just to preserve their data — it’s time to stop.

Chipmunk gives you a fully automated, secure, and cost-effective way to archive departed user data across OneDrive, Teams, and Exchange — and safely delete the license.

File Archiving: Everything You Need to Know

File Archiving: Everything You Need to Know

What is File Archiving?

In the ever-growing digital landscape, managing vast amounts of data has become a crucial task for organizations and individuals alike. One essential strategy for effective data management is file archiving. But what exactly does this process entail, and why is it important?

File Archiving Key Takeaways

Topic Key Points
What is File Archiving? A method to store infrequently used data securely for long-term retention.
Benefits of File Archiving Storage optimization, cost savings, compliance, data security, and disaster recovery.
File Archiving vs. Backup Archiving is for long-term retention; backup is for short-term data protection and quick recovery.
Common Archiving Methods On-premises, cloud-based, and hybrid solutions.
Best Practices Clear retention policies, metadata use, process automation, and regular data review.
How to Archive Files Identify, organize, compress, select a method, secure storage, and document the process.
Choosing an Archiving Solution Look for configurability, scalability, security, user-friendliness, and strong support.
Squirrel Archiving Features SharePoint integration, stub files, geo-specific nodes, security, and automated rules.
File Archiving

Understanding File Archiving

In today’s digital age, organizations generate vast amounts of data daily. Managing this data efficiently is crucial for operational success and compliance. File archiving plays a pivotal role in this process by moving inactive data to separate storage systems for long-term retention, thereby optimizing storage and enhancing system performance.

File archiving is the process of moving data that is no longer actively used to a separate storage system for long-term retention. This data is often compressed and stored in a more cost-effective medium, freeing up space on primary storage systems and improving overall system performance. Archiving helps organizations maintain data compliance, reduce storage costs, and simplify data management.

 

 

Key Benefits of File Archiving

Implementing a robust file archiving strategy offers numerous advantages. From optimizing storage and reducing costs to ensuring regulatory compliance and enhancing data security, archiving helps organizations manage their data more effectively and prepare for potential disasters.

  • Storage Optimization: By relocating infrequently accessed files, primary storage remains uncluttered, improving system efficiency and speed.
  • Cost Savings: Archiving reduces the need for expensive, high-performance storage, allowing businesses to use more economical storage solutions for older data.
  • Regulatory Compliance: Many industries have strict data retention regulations. Archiving ensures that critical records are preserved securely and can be retrieved when required.
  • Enhanced Data Security: Archived data is typically stored in a secure environment, reducing the risk of accidental loss or unauthorized access.
  • Disaster Recovery: Archiving provides an additional layer of data backup, ensuring that valuable information can be recovered in case of system failures or cyberattacks.

File Archiving vs. Backup

While both file archiving and data backup are essential components of data management, they serve distinct purposes. Understanding the differences between these processes is vital for developing a comprehensive strategy that ensures both immediate data recovery and long-term data retention.

  • Backup is designed for short-term data protection, allowing for quick recovery in case of data loss.
  • Archiving, on the other hand, is intended for long-term storage of data that is not actively used but still needs to be retained.

Both processes are essential components of a comprehensive data management strategy.

Common File Archiving Methods

Organizations have several options when it comes to archiving their data. Choosing the right method—be it on-premises, cloud-based, or a hybrid approach—depends on factors like data volume, accessibility needs, and budget constraints.

  • On-Premises Archiving: Utilizing dedicated servers or storage devices within an organization’s infrastructure.
  • Cloud-Based Archiving: Leveraging cloud services for scalable and remote archiving solutions.
  • Hybrid Approaches: Combining on-premises and cloud storage for greater flexibility and control.

Best Practices for Effective File Archiving

To maximize the benefits of file archiving, it’s essential to follow best practices. This includes implementing clear retention policies, utilizing metadata for efficient retrieval, automating archiving processes, and regularly reviewing archived data to ensure its relevance and compliance.

  • Implement Clear Retention Policies: Establish guidelines on how long data should be archived based on legal, regulatory, and business needs.
  • Use Metadata and Indexing: Ensure archived files are easily searchable and retrievable.
  • Automate Archiving Processes: Utilize software solutions to streamline archiving and reduce manual effort.
  • Regularly Review Archived Data: Periodically assess archived files to determine if they are still relevant or can be securely deleted.

     

How to Archive Files

Archiving files effectively involves a systematic approach. By identifying files suitable for archiving, organizing and preparing them appropriately, and selecting the right archiving method, organizations can ensure their data is securely stored and easily retrievable when needed.

  • Identify Files for Archiving: Determine which files are no longer actively used but need to be retained.
  • Organize and Prepare Files: Categorize files logically and ensure they are free from errors.
  • Compress and Encrypt Files: Use compression tools to reduce storage size and encryption to protect sensitive data.
  • Select an Archiving Method: Choose between on-premises, cloud, or hybrid archiving solutions based on your organization’s needs.
  • Store in a Secure Location: Ensure archived data is stored in a secure, compliant environment.
  • Document the Process: Maintain records of what has been archived and where it is stored for easy retrieval.

Choosing the Right File Archiving Solution

Selecting an appropriate file archiving solution is critical for efficient data management. Key considerations include configurability, scalability, security features, user-friendliness, and the quality of technical support to ensure the solution aligns with organizational needs.

When selecting a file archiving solution, consider the following features:

  • Configurability: Ability to tailor archiving policies to meet specific business needs.
  • Scalability: Support for growing data volumes without performance degradation.
  • Security: Strong encryption, access controls, and compliance with data protection regulations.
  • Ease of Use: User-friendly interfaces and comprehensive support resources.
  • Advanced Search and Retrieval: Robust search capabilities for efficient data access.
  • Technical Support: Reliable support services for troubleshooting and guidance.

Introducing Squirrel Archiving

Squirrel Archiving is an advanced solution designed to streamline the file archiving process. With features like seamless SharePoint integration, stub file technology, robust security, and automated archiving rules, Squirrel empowers organizations to manage their data efficiently while maintaining compliance and reducing storage costs.

Key Features of Squirrel Archiving:

  • Seamless SharePoint Integration: Easily archive and restore files within your existing SharePoint infrastructure.

  • Stub File Technology: Replace archived files with lightweight stubs containing URLs for easy retrieval.

  • Robust Security: End-to-end encryption and access controls to safeguard your data.

  • Geo-Specific Worker Nodes: Optimize performance across multiple locations by deploying worker nodes in specific geographies.

  • User-Friendly Interface: An intuitive dashboard for monitoring archiving tasks and managing data.

  • Automated Archiving Rules: Customize rules for automated archiving based on file age, type, or usage patterns.

  • User Initiated Archiving: Enable your End Users to archive files that they no longer need access to, rather than waiting for a lifecycle policy to come in to effect.

Squirrel Archiving empowers organizations to streamline data management, reduce storage costs, and enhance compliance with data retention regulations—all while maintaining easy access to critical files.

Conclusion

File archiving is a vital component of modern data management strategies. By efficiently organizing and preserving data, businesses can enhance operational efficiency, reduce costs, and ensure compliance with legal requirements. As data continues to grow exponentially, adopting effective archiving practices will become increasingly important for maintaining a streamlined and secure digital environment.

With solutions like Squirrel Archiving, businesses can simplify the archiving process, optimize storage, and maintain quick, secure access to their data—creating a future-proof approach to data management.

 

File Archiving Frequently Asked Questions (FAQs)

  • What is the primary purpose of file archiving? To store inactive data securely for long-term retention while optimizing storage space.
  • How does file archiving differ from data backup? Backup focuses on short-term data protection, while archiving is for long-term storage and compliance.
  • Why should businesses implement file archiving? To reduce storage costs, meet regulatory requirements, and improve system performance.
  • What types of files should be archived? Infrequently accessed files, historical records, and data required for regulatory compliance.
  • How secure is archived data? With proper encryption and access controls, archived data can be securely protected against unauthorized access.
  • What is stub file technology? A method where archived files are replaced with lightweight placeholders containing a retrieval link.
  • Can archived files be restored easily? Yes, using solutions like Squirrel Archiving, files can be restored directly from the user interface.
  • Is cloud-based archiving better than on-premises? It depends on business needs. Cloud offers scalability and remote access, while on-premises offers more control.
  • How does Squirrel Archiving integrate with SharePoint? It directly integrates with SharePoint, enabling seamless archiving and restoration within the platform.
  • What happens if archived data needs to be accessed frequently? Files can be restored or reclassified to active storage if frequent access is required.