Microsoft kills unlimited OneDrive storage, will downgrade free and paid plans next year

Just over a year ago, Microsoft removed the 1TB limit on its OneDrive service for Office 365 subscribers. If you were paying for Office 365, you suddenly had unlimited storage, at no additional cost. Today, the company killed that upgrade.

The deal was a steal. The cheapest Office 365 subscription costs $7.00 per month. It was Microsoft’s way to turn up the heat in its battle against Dropbox and Google Drive, both of which charged $10 per month for 1TB of space. Microsoft’s deal was not only cheaper, but also included the company’s Office apps.

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So why is it backpedaling now? Well, it seems some users were really taking advantage of the deal. From the horse’s mouth:

Since we started to roll out unlimited cloud storage to Office 365 consumer subscribers, a small number of users backed up numerous PCs and stored entire movie collections and DVR recordings. In some instances, this exceeded 75 TB per user or 14,000 times the average. Instead of focusing on extreme backup scenarios, we want to remain focused on delivering high-value productivity and collaboration experiences that benefit the majority of OneDrive users.

In other words, this is why we can’t have nice things.

Office 365 Home, Office 365 Personal, and Office 365 University plans now include the previous 1TB of OneDrive storage. If you have one of these plans and have stored in excess of 1TB, you will be notified of this change and will be able to keep your increased storage for at least 12 months. The only silver lining is that Microsoft is offering prorated refunds in case you decide Office 365 is no longer a good deal. Details are in the FAQ.

But that’s not all Microsoft is changing. Paid OneDrive users are getting a downgrade as well:

100GB and 200GB paid plans are going away as an option for new users and will be replaced with a 50GB plan for $1.99 per month in early 2016. Current customers of standalone OneDrive storage plans (such as a 100GB or 200GB plans) are not affected by these changes.

Even free OneDrive users are losing out:

Free OneDrive storage will decrease from 15GB to 5GB for all users, current and new. The 15GB camera roll storage bonus will also be discontinued. These changes will start rolling out in early 2016. If you are using more than 5GB of free storage, you will continue to have access to all files for at least 12 months after these changes go into effect in early 2016. In addition, you can redeem a free one-year Office 365 Personal subscription (credit card required), which includes 1TB of OneDrive storage.

This is where you have to wonder whether Microsoft really is making a decision based on some users uploading 75TB of files, or if the company is realizing its storage offerings were “too good.” We’re betting the company simply decided the cost outweighed the benefit.

This looks like a move it just might regret.