Microsoft 365 Cuts Shared Storage to 2TB Limit
Microsoft has announced a significant shift to its cloud storage policy for Microsoft 365 shared accounts, moving from an assigned 1TB per user to a shared 2TB capacity pool amid broader industry shortages.
Radwan AbdulhadiEditor and technology writer
The Policy Shift for Shared Accounts
Microsoft has introduced a major change to its storage policy that will impact subscribers utilizing shared accounts. According to information detailed by [Tom's Hardware](https://www.tomshardware.com/software/cloud-storage/microsoft-365-slashes-storage-capacity-for-shared-accounts-amid-industry-wide-shortages-2tb-limit-to-take-effect-after-april-2027), the Microsoft 365 Family, Premium, and Pro plans are transitioning from an assigned 1TB of cloud storage for each individual user to a shared 2TB pool for all users combined. This means that a subscription shared across the maximum of six users will experience a substantial reduction in total available cloud storage capacity.
The upcoming policy change is scheduled to take effect on subscription renewals occurring after May 2, 2027, unless subscribers choose to alter their plans beforehand. The company noted that some impacted subscribers might receive bonus storage when their accounts transition to the new shared limit model, though specific eligibility requirements were not disclosed by the corporation.
Rationale Provided by the Company
Explaining the decision, the company stated that the modification is designed to ensure cloud storage allocations for [Microsoft](https://www.tomshardware.com/tag/microsoft) 365 subscribers automatically flow to where they are needed most. Under this configuration, individual users are less likely to encounter rigid individual storage limits, and unused storage can potentially benefit the entire household or group.
Furthermore, the company highlighted that any extra storage purchased by the primary subscriber will be shared across the entire group. This setup presents a potential advantage for accounts featuring a single power user who consumes the vast majority of the cloud storage capacity while other participants utilize only a fraction of the space.
Financial Impacts and User Cost Breakdown
While the new subscription structure can offer financial benefits in specific scenarios—such as an individual opting for the Microsoft 365 Family plan at $129.99 annually rather than paying for a Personal plan alongside extra monthly storage additions—it introduces higher costs for multi-user households. For example, if an account contains four users who each consume 500GB of data, the group will exceed the new 2.5TB limit or require purchasing additional capacity starting at $1.99 per month for 200GB.
By implementing this structural adjustment without altering base subscription prices, the company simultaneously alleviates pressure on its storage infrastructure while requiring multi-user accounts with heavy data consumption to fund extra capacity separately.
Broader Industry Context and Alternatives
This shift arrives amid a severe industry-wide storage shortage that has severely impacted cloud vendors and hardware supply chains alike. Hard drive prices experienced a notable surge between September 2025 and January 2026, while enterprise solid-state drives have faced severe availability constraints and high costs.
As major cloud providers adjust their models—such as Google reducing free cloud storage limits and backup providers tightening terms for heavy data users—consumers seeking alternatives are increasingly evaluating local solutions. Setting up a network-attached storage (NAS) system populated with dedicated hard drives offers a self-hosted alternative to ongoing monthly cloud subscriptions, though it requires upfront hardware investment and technical configuration.
Sources
- Tom's HardwareMicrosoft 365 slashes storage capacity for shared accounts amid industry-wide shortages
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