Microsoft 365 Shared Plans Will Cut Cloud Storage to 2TB Total per Account

What Is Changing

Microsoft is overhauling the cloud storage model for its shared Microsoft 365 subscriptions. Under the new policy, Microsoft 365 Family, Premium, and Pro plans will move from an assigned 1TB of cloud storage per user to a single shared 2TB pool for all users on the account. For a subscription shared across six users, this means total cloud storage capacity will be reduced by 66.6%.

The change will take effect on subscription renewals after May 2, 2027, unless subscribers change their plan earlier. Some affected subscribers may also receive bonus storage when their account switches to the shared limit model, although Microsoft has not specified eligibility requirements.

Microsoft's Reasoning

The company said it made the change so that the cloud storage allocation for Microsoft 365 subscribers will automatically go where it is needed, making individual users less likely to hit storage limits. Unused storage can benefit the entire family, and any additional storage purchased by the main subscriber will benefit everyone on the plan.

This setup favors accounts where one power user consumes most of the cloud storage while the rest use only a fraction. It is also cheaper for an individual who needs more than 1TB to switch to the Microsoft 365 Family plan, which costs $129.99 annually, instead of keeping the $99.99 Personal plan and paying an extra $9.99 per month, or $119.88 per year, to reach 2TB of total cloud storage.

Storage Shortage Pressures

The move coincides with a broad industry storage shortage. Hard drive prices surged by 46% from September 2025 to January 2026, while enterprise SSDs have been hit hard, with 30TB drives now costing $22,600 and supply sold out until 2027. Microsoft has not raised subscription prices, but the change reduces the burden on its storage servers while pushing accounts with multiple heavy users to buy additional capacity, starting at $1.99 per month for 200GB.

Rivals are under similar strain. Google has cut its free cloud storage limit from 15GB to 5GB pending extra security measures, and Backblaze, which offers "unlimited" backups, updated its terms of service to potentially throttle or terminate accounts that exceed typical usage patterns or place an undue burden on the service.

Alternatives for Users

Affected users who are tired of paying monthly to secure their data could alternatively set up a network attached storage device and populate it with hard drives. Although this may be pricey in the short term and requires some setup, it could potentially save hundreds, if not thousands, of dollars in the long run.

Sources: Tomshardware