This series covers the full storage picture in Microsoft 365: how it works, what's consuming it, how to manage it, and how to build a governance framework around it.
This post covers two capabilities that are frequently confused: Microsoft 365 Archive and Microsoft 365 Backup. They solve different problems, work differently, and cost differently. Understanding the distinction is the prerequisite for using either effectively.
Series: Managing Storage in Microsoft 365 — Part 2 of 4. Part 1 covers storage fundamentals and version history. Part 3 covers compliance, retention, and GDPR.
Archiving and backup are often treated as interchangeable. In Microsoft 365 they are distinct products that serve distinct purposes, and using one when you need the other creates gaps that only become visible when something goes wrong.
The practical distinction:
- Archive — moves content from active storage into Microsoft's archive tier, keeping it accessible but out of the way. Solves a storage cost and lifecycle problem.
- Backup — creates recoverable snapshots of content so that if something is accidentally deleted, corrupted, or destroyed by ransomware, you can restore it. Solves a data loss and resilience problem.
Neither replaces the other. And critically: archiving does not reduce the amount of storage your data occupies. It changes how that storage is billed.
Microsoft 365 Archive
Microsoft 365 Archive is Microsoft's native cold storage tier for SharePoint content. When content is archived, it moves out of your active SharePoint storage pool into an archive tier — still within Microsoft's infrastructure, still subject to your existing compliance policies, but billed at a lower rate.
Site-Level Archiving
The original Microsoft 365 Archive capability works at the site level. An entire SharePoint site — all of its content, metadata, permissions, and version history — can be archived from the SharePoint Admin Centre.
Archived sites are read-only. Users with appropriate permissions can view and download content, but cannot modify it. Access behaviour may vary depending on site configuration, permissions, and archive settings.
File-Level Archiving
In March 2026 Microsoft released file-level archiving in public preview. This allows individual files within an active site to be archived while the rest of the site remains fully active — useful for sites still in use but containing large volumes of old content that hasn't been accessed in years.
Policy-based automatic archiving — where rules such as "archive files not accessed in 12 months" are applied automatically — is planned. Microsoft has indicated general availability for file-level archiving is expected during 2026, although roadmap dates remain subject to change.
What Happens to Archived Content
Archived content:
- Remains within Microsoft's infrastructure — it does not create a second independent copy of the data
- Remains subject to Purview retention policies and eDiscovery holds
- Can still be retained, discovered, and produced for legal or regulatory purposes if covered by Microsoft Purview retention or eDiscovery controls
- Search indexes and metadata are retained — archived content can be discovered through search, although retrieval and reactivation workflows differ from active content
- Is read-only — users with appropriate permissions can view and download but not edit
- Can be reactivated if needed — reactivation is free (the per-GB reactivation fee was eliminated in March 2025)
Archive is not a backup. If an archived file is deleted and the recycle bin expires, the file is gone permanently. Archive preserves content in a lower-cost storage tier. It does not create a second independent copy of the data.
Reactivation and Timing
Reactivation is free but timing varies:
- Content archived within the last 7 days can reactivate immediately
- Older archived content may take up to approximately 24 hours to reactivate fully
- Content cannot be re-archived for four months after reactivation
The Cost Model
Archive storage is billed at a lower rate than active storage over quota. The key nuance: archive costs are only charged for the portion that exceeds your tenant's licensed SharePoint storage quota. If your total storage — active plus archived — is within your quota, archiving costs you nothing extra.
This makes archive particularly valuable for organisations approaching or exceeding their storage quota. Archiving inactive content can bring active storage within quota, eliminating overage charges entirely — though remember, archiving doesn't reduce the data you have, it changes how it's billed.
Current pricing is available at the Microsoft 365 pricing page — archive storage is significantly cheaper than active overage storage per GB per month.
A Note on Unlicensed OneDrive Accounts
Microsoft also uses the archive tier for OneDrive accounts belonging to unlicensed users — for example, when an employee leaves and their licence is removed. These accounts follow separate lifecycle and billing rules and should not be confused with SharePoint site archiving. Administrators managing departing employee data should review Microsoft's guidance on unlicensed OneDrive account lifecycle management separately.
Archived Content and Copilot
A recent governance benefit of archiving: archived content is excluded from Microsoft 365 Copilot grounding and retrieval. For organisations concerned about Copilot surfacing historical or sensitive content that no longer reflects current policies or processes, archiving is becoming an important governance tool — not just a storage management one.
What Archive Is Not
Microsoft 365 Archive is not:
- A backup solution
- A records management solution
- A retention policy
- A way to reduce the physical amount of data you store
It is a storage lifecycle and cost-management tool.
SAM and Archive
SharePoint Advanced Management's site lifecycle management feature works in conjunction with Microsoft 365 Archive to identify inactive sites and apply archiving policies at scale. For organisations without SAM, the SharePoint Admin Centre and PowerShell provide manual and scripted archiving options.
Microsoft 365 Backup
Microsoft 365 Backup is a separate product from Archive. It protects SharePoint sites, OneDrive accounts, and Exchange Online mailboxes against accidental deletion, corruption, and ransomware through regular snapshots with up to two years of retention.
What Microsoft 365 Backup Protects
Microsoft 365 Backup covers:
- SharePoint sites — site-level and granular file/folder restore (granular restore reached GA in late April 2026)
- OneDrive accounts — file-level restore
- Exchange Online mailboxes — item-level restore
Organisations requiring comprehensive protection of Teams chats, Planner, Whiteboard, Loop, and related collaboration workloads may still require third-party solutions — Microsoft 365 Backup currently focuses on SharePoint, OneDrive, and Exchange.
Restore Point Frequency
Microsoft manages the creation of recovery points behind the service. Based on Microsoft's published documentation:
- Exchange Online — restore points every 10 minutes for the full prior year
- OneDrive and SharePoint — restore points every 10 minutes for the previous 14 days, reducing to weekly restore points from 14 days to 365 days prior
For granular file and folder restores within SharePoint and OneDrive, restore points are roughly daily (and may align to weekly points in rare cases). Restores are admin-initiated — end users cannot trigger granular restores themselves, and the SharePoint Backup Administrator role is required.
The Cost Model
Microsoft 365 Backup is charged on a per-GB per month basis of protected content, billed via Azure. A tenant protecting 5 TB of content would incur approximately $750/month at Microsoft's current list price of $0.15/GB/month — verify current pricing at the Microsoft 365 pricing page before planning your budget.
What counts toward billing includes the size of protected SharePoint sites, OneDrive accounts (including recycle bin content), and Exchange mailboxes with their online archives.
Why Microsoft 365 Doesn't Include Backup by Default
Microsoft provides high availability, redundancy, and the recycle bin (which retains deleted content for 93 days in the second-stage recycle bin), but these are resilience mechanisms, not backup.
If content is permanently deleted after the recycle bin period expires, or if ransomware encrypts content across your tenant, or if content is overwritten by misconfiguration, the recycle bin doesn't help. Microsoft 365 Backup does.
Microsoft is responsible for the availability and durability of the service. Organisations remain responsible for recovering data that users or administrators delete, overwrite, or corrupt.
Archive vs Backup — The Decision Framework
| Question | Tool |
|---|---|
| We have old content we don't need but can't delete — reduce cost? | Archive |
| We're approaching our storage quota | Archive |
| A user accidentally deleted important files | Backup |
| We were hit by ransomware | Backup |
| We need to keep project files accessible after the project ends | Archive |
| We must retain records for seven years and prevent deletion | Retention Policy |
| We need to recover a previous version of a document | Backup or version history |
| We want to prevent Copilot surfacing historical content | Archive |
Most organisations of any size need both Archive and Backup — and both are distinct from retention policies, which govern what must be kept for compliance reasons regardless of storage cost.
Archive reduces storage costs. Retention satisfies compliance requirements. Backup enables recovery after data loss. They solve different problems and most organisations need all three.
The biggest Microsoft 365 governance misunderstanding is treating these three as alternatives rather than complementary layers.
What This Means for Storage Management
Organisations now have a full spectrum of options for content that's no longer actively used:
- Keep active — content still in regular use
- Archive — content that needs to be retained and accessible but isn't actively used; also useful to exclude from Copilot grounding
- Backup — protection for workloads that are within the scope of your backup strategy
- Delete — content that no longer needs to be retained (subject to retention obligations)
The governance question — who decides which content goes where, and when — is covered in Part 4. The compliance question — what you're legally obligated to retain and for how long — is covered in Part 3.
Where to Start
- Check the SharePoint Admin Centre for inactive sites — these are the primary candidates for archiving
- Confirm whether Microsoft 365 Archive is enabled in your tenant (Settings → Org settings → Pay-as-you-go services)
- Calculate your current excess storage cost — if you're over quota, archiving inactive content may eliminate that overage charge
- Confirm whether Microsoft 365 Backup is in place — if not, understand your current data loss exposure and the 93-day recycle bin window
- Review whether Teams chat backup is required for your compliance or litigation risk profile — if it is, evaluate third-party options
Part 3 of this series covers compliance, retention policies, and GDPR — the regulatory layer that shapes what you can delete, what you must keep, and for how long.