Microsoft 365 cuts shared storage to 2TB total for family plans
Microsoft will reduce cloud storage for shared accounts from 1TB per user to a pooled 2TB limit, affecting renewals after May 2027.
Key points
- Microsoft 365 Family, Premium, and Pro plans will shift to a shared 2TB storage pool.
- The change applies to subscription renewals occurring after May 2, 2027.
- Microsoft cites industry-wide storage shortages and rising hardware costs as drivers.
Microsoft is restructuring its cloud storage allocation for shared Microsoft 365 subscriptions, reducing the total capacity available to families and small teams. According to the company, the Microsoft 365 Family, Premium, and Pro plans will move from an assigned 1TB of cloud storage for each user to a shared 2TB limit for all users on the account. This policy change will take effect on subscription renewals after May 2, 2027, unless subscribers choose to change their plan earlier.
The adjustment significantly reduces the total cloud storage capacity for accounts shared across multiple users. A subscription shared among six users will see its total cloud storage capacity decrease by 66.6 percent. Microsoft stated that this change allows cloud storage allocation to go where it is needed most, reducing the likelihood of individual users hitting personal storage limits. The company also noted that unused storage can benefit the entire family group.
Industry Context and Costs
Microsoft linked this policy shift to broader supply chain constraints affecting the technology sector. According to Tom's Hardware, the move appears to be a reaction to a storage shortage hitting the industry, with hard drive prices surging by 46 percent from September 2025 to January 2026. Enterprise SSDs have been particularly impacted, with 30TB drives costing $22,600 and remaining sold out until 2027. AI data centers are consuming a significant portion of the world's memory and storage supply, driving up demand for data center CPUs and contributing to chip scarcity.
While Microsoft has not increased the base prices of its subscriptions, the new model forces accounts with multiple heavy users to purchase additional capacity separately. The company aims to reduce the burden on its storage servers while allowing additional storage purchased by the main subscriber to benefit everyone on the account. Some affected subscribers might receive bonus storage when their account switches to the share limit model, though eligibility requirements were not specified.
Who Is Affected
The new setup benefits subscribers with one power user who consumes the majority of cloud storage while others use minimal space. For individuals needing more than 1TB of storage, switching to the Microsoft 365 Family plan at $129.99 annually may be cheaper than maintaining a Personal plan at $99.99 annually and paying an extra $9.99 per month for additional capacity. However, households with four users each using 500GB will be forced to buy extra storage, starting at $1.99 per month for 200GB.
What should you do?
Users should review their current Microsoft 365 plan and estimate their total household or team storage usage before their next renewal date. Those with multiple heavy users should calculate the cost of purchasing additional storage tiers versus upgrading to a different plan. Subscribers should monitor their storage quotas regularly to avoid unexpected overages once the new shared limit is enforced.
What to do and how to stay safe: Microsoft
- Audit current cloud storage usage across all users on the shared account to determine if the new 2TB limit is sufficient.
- Compare the annual cost of your current plan plus potential add-on storage fees against the cost of alternative Microsoft 365 tiers.
- Set up notifications for storage usage thresholds to monitor consumption trends before the May 2027 renewal deadline.
- Review subscription renewal dates to ensure you are aware of when the new policy will automatically apply to your account.
Step-by-step guide: Cloud Misconfiguration Response: Containment, Recovery and Prevention Steps
General security guidance from the Threat Times newsroom. It is not confirmed advice from the organisations named in this story.
Frequently asked questions
When does the new Microsoft 365 storage policy take effect?
The change will take effect on subscription renewals after May 2, 2027, unless subscribers change their plan earlier.
Which Microsoft 365 plans are affected by this storage reduction?
The Microsoft 365 Family, Premium, and Pro plans are affected, moving from 1TB per user to a shared 2TB total.
Why is Microsoft reducing the storage capacity for shared accounts?
Microsoft cites the need to allocate storage where it is needed and notes industry-wide storage shortages and rising hardware costs.
