MicrosoftMicrosoft 365 OneDrive for Business Plan 1 vs Plan 2 – Feature comparison July 8, 2020632 views0 By IG Share Share In this article, we are comparing the OneDrive for Business Plan 1 vs Plan 2 to better understand the differences in these subscription models better. OneDrive Business Plan 1 vs 2: The Ultimate 2025 Guide | GigXP.com GigXP.com Overview Comparison Storage Security Decision Guide OneDrive for Business: Plan 1 vs Plan 2 The Definitive August 2025 Guide to Choosing the Right Cloud Storage Strategy. Published on August 20, 2025 A Strategic Overview Choosing between Microsoft's OneDrive for Business Plan 1 and Plan 2 isn't just about storage—it's a fundamental strategic decision. As of August 2025, this choice defines your organization's commitment to data governance, security, and legal readiness. Plan 1 is a functional utility, but Plan 2 is a specialized risk management platform. OneDrive Plan 1: The Utility A straightforward 1 TB cloud storage solution. Best for organizations with basic needs and a pre-existing commitment to a non-Microsoft collaboration suite like Google Workspace. $5/user/month OneDrive Plan 2: The Platform Offers scalable storage plus advanced data governance, including Data Loss Prevention (DLP) and eDiscovery. Essential for regulated industries and protecting IP. $10/user/month Interactive Feature Comparison Use the filters below to compare features based on your organization's priorities. The table highlights the key differences that define each plan's value. All Features Storage Collaboration Security & Compliance Feature Plan 1 Plan 2 Base Storage 1 TB / user 1 TB / user (initial) Scalable Storage ❌ No ✅ Yes (Up to 25 TB+) "Unlimited" Storage Condition N/A Requires 5+ users File Sharing (Internal/External) ✅ Yes ✅ Yes Files On-Demand & Sync ✅ Yes ✅ Yes Data Encryption (At Rest & In Transit) ✅ Yes ✅ Yes Data Loss Prevention (DLP) ❌ No ✅ Yes eDiscovery & Legal Hold ❌ No ✅ Yes Advanced Auditing & Reporting ❌ No ✅ Yes The Storage Scalability Divide The most visible difference is storage, but "unlimited" comes with conditions. Plan 1's 1 TB ceiling is a hard limit, while Plan 2 offers a managed pathway to massive storage capacity for organizations with at least five users. Deconstructing "Unlimited" Storage Microsoft's "unlimited" storage is a managed, multi-tiered system. It's not an automatic allocation but a structured pathway that requires administrative action and is contingent on demonstrated need. The most critical prerequisite is the **five-user minimum**; tenants with fewer than five Plan 2 licenses are capped at 1 TB per user. Storage Tier Capacity Trigger Action Required Default 1 TB License assignment None Admin-Managed Up to 5 TB User approaches 1 TB limit Admin increases quota via M365 Admin Center Support-Managed Up to 25 TB User fills >90% of 5 TB Admin opens support ticket with Microsoft SharePoint Expansion 25 TB+ User fills >90% of 25 TB Automatic provisioning of 25 TB SharePoint sites Interactive Cost Projection See how the costs add up. While Plan 2 is more expensive, its value for compliance can prevent far greater costs from data breaches or legal fees. Advanced Security & Compliance: The Core of Plan 2 The $5 price difference is not for storage; it's an insurance policy. Plan 2 integrates Microsoft Purview tools that are essential for mitigating risk in modern business. This transforms OneDrive from a simple file repository into a key component of your data governance strategy. Infographic: How Data Loss Prevention (DLP) Works 1. Define Policy Admin sets rules to identify sensitive data (e.g., PII, financial info). → 2. Scan Content System automatically scans files in OneDrive for policy matches. → 3. Protect Blocks unsafe sharing, warns users, and alerts compliance officers. eDiscovery & Legal Hold In the event of litigation, you are legally required to preserve electronic information. Plan 2 provides the tools to do this defensibly, ensuring data integrity for legal review without disrupting user workflows. Legal Hold Enabled: User's OneDrive is placed on hold. User Action: Deletes a critical document. System Response: File is removed from user's view but is secretly retained in a secure Preservation Hold Library, available for legal discovery. The Microsoft 365 Ecosystem Context Evaluating OneDrive in a vacuum is a mistake. For just $1 more than Plan 1, Microsoft 365 Business Basic offers the same storage plus a full collaboration suite, making it a far better value for most businesses. Feature OneDrive Plan 1 ($5) M365 Business Basic ($6) OneDrive Plan 2 ($10) M365 E3 ($36) OneDrive Storage 1 TB 1 TB Unlimited (Tiered) Unlimited (Tiered) Business Email (Exchange) ❌ ✅ ❌ ✅ Microsoft Teams ❌ ✅ ❌ ✅ DLP & eDiscovery ❌ ❌ ✅ ✅ Navigating 2025 Policy Updates Microsoft is tightening its policies, shifting more administrative responsibility to you. Inaction can now lead to direct financial costs and security risks. The Unlicensed Account Mandate A critical change is the automatic archival of OneDrive accounts 90 days after a user's license is removed. This policy is designed to force proactive offboarding procedures. Financial Impact: Reactivating an archived account costs $0.60/GB, plus a monthly storage fee of $0.05/GB. Proactive offboarding is now a financial imperative, not just a best practice. Evolving Sharing Protocols Microsoft is enhancing security for external sharing. External users will now be required to sign in with a Microsoft account to perform bulk downloads from view-only shared folders. This change provides a clearer audit trail and makes anonymous, large-scale data exfiltration more difficult. Interactive Decision Flowchart Navigate this flowchart to quickly identify the most suitable plan for your organization's specific needs. Start with the first question and follow the path that best describes your requirements. START HERE: Key Requirement Analysis Do you operate in a regulated industry or require advanced compliance features like DLP, eDiscovery, and Legal Hold? YES OneDrive Plan 2 This is your minimum requirement. Also evaluate M365 E3/E5 for comprehensive enterprise features. NO Do you need a full collaboration suite (Business Email, Microsoft Teams)? YES M365 Business Basic / Standard These bundles offer far superior value over standalone OneDrive plans. NO OneDrive Plan 1 Suitable for basic storage needs if you use a competing collaboration suite (e.g., Google Workspace). Total Cost of Ownership (TCO) Calculator Go beyond the sticker price. This calculator helps you estimate the true annual cost of each plan by factoring in potential hidden fees from the 2025 policy updates, such as data archival for departing employees. Plans without advanced governance (like Plan 1) carry a higher financial risk if offboarding is not managed perfectly. Your Organization's Profile Total Number of Users Departing Employees per Year Avg. Data per Departing Employee (GB) Calculate Estimated TCO Estimated Annual Cost Comparison Enter your details and click calculate to see your results. Decision Framework & Recommendations Use this matrix to find the best starting point for your organization. The right choice depends on your industry, size, and risk tolerance. Business Profile Primary Need Recommended Plan Rationale Startup (<20, Non-Regulated) Cost-effective suite M365 Business Basic Best entry-level value with email & Teams. SMB (20-300, Non-Regulated) Full productivity suite M365 Business Standard Adds desktop Office apps for a complete solution. SMB (Regulated) Compliance & Security OneDrive Plan 2 or M365 E3 Plan 2 is the minimum for compliance tools. E3 is a better value if advanced security is also needed. Large Enterprise (>300) Advanced everything M365 E3 or E5 Comprehensive security & management are essential at this scale. Strategic Recommendations for IT Leadership To future-proof your cloud data strategy, move beyond simple license selection and adopt a governance-focused approach. Default to Bundled Subscriptions: For most organizations, the bundled M365 plans offer superior financial and functional value. The standalone OneDrive plans serve only niche purposes. Treat Storage as a Governance Issue: The decision for Plan 2 should be driven by legal, compliance, and security teams. The investment is in risk mitigation, not just terabytes. Prepare for the 2025 Administrative Shift: Develop a formal employee de-provisioning process that explicitly handles OneDrive data to avoid new archival fees and potential data loss. Conduct Continuous Licensing Reviews: Your needs will evolve. Annually review your Microsoft licensing to ensure it remains the most cost-effective solution for your organization's changing security and compliance posture. OneDrive has been one of the excellent cloud storage services from Microsoft. While the individual, freemium service (on Windows 10) has been one of the most beneficial options, you would find it one of the unique opportunities for businesses as well. Realizing the needs of the business users, Microsoft has launched an outstanding cloud-based service for the business users under the OneDrive brand. Related: Microsoft Project Plan 1 vs 3 vs Plan 5 Labeled OneDrive for Business, the service lets you store your files on OneDrive Business and access them from anywhere on any device. You can even share them with others with the permissions that you would deem fit. What is OneDrive for Business? OneDrive for Busines is the best cloud storage option you can opt for if you are looking for the best options for saving your data for your business and enterprise requirements. It can be the best replacement for the My Documents or even desktop folders on your computer. What makes it one of the excellent choices would be the fact that it provides you access to unlimited storage choices. The pricing starts at just $10 per month, and that would make it one of the excellent options you would want to opt for. That would make OneDrive storage a great choice simply because you do not need to spend money on the expensive physical or SAN storage or even replace your SMB file servers. One of the advantages of opting for OneDrive for Business would be that you do not need to worry about data corruption, protection, or backups. No matter whether you face a hardware failure or any other similar issues, your data will always remain safer. What makes Microsoft OneDrive for Business a great choice? There are several advantages offered by the OneDrive for Business plans. Some of the excellent options provided by OneDrive for Business. Let us analyze a few salient benefits provided by OneDrive for Business – It helps you save on storage costs – Replacing the physical storage with online storage can be an excellent option. In fact, using OneDrive for Business can save almost all your data at a fraction of the cost of your physical store. The online storage is the future and adapting to the online storage well ahead would make it one of the enormous advantages ever. It seamlessly integrates with other familiar Microsoft products – Using OneDrive for Business would make it of the highly preferred options to go with because of the high degree of integration that it can achieve with other Microsoft products. It works exceptionally excellent with Outlook, SharePoint, and other essential digital commodities. Available as part of different plans – You can opt for OneDrive for Business as part of multiple Microsoft 365 plans. You can either go with it with different Microsoft 365 plans or use it as a standalone pack as well. Huge Storage Option – The plans come with either a 1 TB storage or unlimited storage based on which plans you opt for. That should be ample storage and should be equivalent to the physical storage or even more than that at a fraction of the total cost you would have incurred for the physical storage. Microsoft recently introduced yet another feature to its OneDrive storage. This would be extremely useful in improving your visual experience further. OneDrive for Business can now store images shot in 3600 in a panorama mode. That would mean you can now zoom into the pictures you have shot with 3600 camera and pan your images. OneDrive for Business Plan 1 – An Overview OneDrive for Business Plan 1 comes with a price of $5.00 per user per month if you are opting for an annual commitment. It can be one of the excellent options for those of you who are looking for the file-sharing and OneDrive storage options. Some of the best features offered by the plan would include – 1 TB of OneDrive cloud storage per user. You can store files with up to 15 GB in size. You would be able to share your files either within your organization or outside the organization. The OneDrive for Business Plan 1 also provides you access to both desktop and browser-based experience. You would be able to sync your local copies of files and folders on a Mac or a PC so that they can be viewed offline. Access the web-based versions of the familiar Office applications such as Word, OneNote, PowerPoint, and Excel. You can create or edit your files with ease. Ability to move and manage the files between SharePoint and OneDrive OneDrive app is available for both iOS and Android for letting you access your files from anywhere anytime. Built-in search and discovery tools should be yet another added advantage. This will help you pick the relevant files with ease. FastTrack Deployment capability A 24 x 7 support for access through web and phone The product is available under a commercial license. OneDrive For Business Plan 2 – An Introduction Well, the OneDrive for Business Plan 2 does offer you access to all the features available on Plan 1. In addition, you stand to gain a few further advantages as well. In case you are looking for the best possible security and compliance requirements, Plan 2 should be one of the best options you can opt for. Plan 2 comes with all the features offered by Plan 1 and a few other functions as well. The OneDrive for Business Plan 2 is available at $10 per user per month. Some of the features offered by the platform would include – The plan offers you unlimited cloud storage per user. This is in sharp contrast to the 1 TB storage provided under Plan 1 You can be assured of advanced prevention options to safeguard your data. This can be used to identify, monitor, and protect sensitive information. The in-place holds an option that helps you protect the deletion and editing of the documents. How do the Two Plans differ from One another? Well, the OneDrive for Business Plan 1 comes with efficient cloud storage. You can store all your data and share it within or outside of your organization. You can synchronize your files across devices so that you will be able to have a look at them from anywhere, whether you are online or not. OneDrive for Busines Plan 2 is what would make it a formidable choice for most of your requirements in case you require advanced security options. Additional productivity tools offered on Plan 2 should be what would make it one of the best plans you would want to go with. The tabulated comparison chart for the best features offered by both the plan would help you pick your project effectively and efficiently. Features OneDrive for Business Plan 1 OneDrive for Business Plan 2 OneDrive storage limit 1 TB Unlimited Individual file size 15 GB 15 GB Office apps online Word, Excel, and PowerPoint Word, Excel, and PowerPoint Desktop and browser apps Yes Yes Transfer of files between OneDrive and SharePoint Yes, available Yes, available Search and Discovery options Yes, available Yes, available Sync options for local files Yes, available Yes, available Data loss prevention No Yes, opportunities to identify, monitor and protect your sensitive information In-Place Holds for securing files No Yes, protection for deletion and editing The Concluding Thoughts Well, that was a complete discussion on the two different plans, such as OneDrive for Business Plan 1 and OneDrive for Business Plan 2. As you would have checked it out clearly, Plan 1 is designed specifically for those of you who have a small scale or medium-scaled organization or for those who are looking for the best storage options over the cloud. Plan 2, on the other hand, would be one of the prime options if you are checking out the security and compliance options. The complete discussion we have covered here and the comparison outlined here should help you make a well-informed decision based on what exactly your requirements are. More on Microsoft 365 Plans Microsoft 365 Apps for Business vs Enterprise Microsoft 365 Business Basic vs Standard vs Premium Comparing Microsoft Visio Plan 1 vs Plan 2 Disclaimer: The Questions and Answers provided on https://gigxp.com are for general information purposes only. 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A Strategic Overview Choosing between Microsoft's OneDrive for Business Plan 1 and Plan 2 isn't just about storage—it's a fundamental strategic decision. As of August 2025, this choice defines your organization's commitment to data governance, security, and legal readiness. Plan 1 is a functional utility, but Plan 2 is a specialized risk management platform. OneDrive Plan 1: The Utility A straightforward 1 TB cloud storage solution. Best for organizations with basic needs and a pre-existing commitment to a non-Microsoft collaboration suite like Google Workspace. $5/user/month OneDrive Plan 2: The Platform Offers scalable storage plus advanced data governance, including Data Loss Prevention (DLP) and eDiscovery. Essential for regulated industries and protecting IP. $10/user/month Interactive Feature Comparison Use the filters below to compare features based on your organization's priorities. The table highlights the key differences that define each plan's value. All Features Storage Collaboration Security & Compliance Feature Plan 1 Plan 2 Base Storage 1 TB / user 1 TB / user (initial) Scalable Storage ❌ No ✅ Yes (Up to 25 TB+) "Unlimited" Storage Condition N/A Requires 5+ users File Sharing (Internal/External) ✅ Yes ✅ Yes Files On-Demand & Sync ✅ Yes ✅ Yes Data Encryption (At Rest & In Transit) ✅ Yes ✅ Yes Data Loss Prevention (DLP) ❌ No ✅ Yes eDiscovery & Legal Hold ❌ No ✅ Yes Advanced Auditing & Reporting ❌ No ✅ Yes The Storage Scalability Divide The most visible difference is storage, but "unlimited" comes with conditions. Plan 1's 1 TB ceiling is a hard limit, while Plan 2 offers a managed pathway to massive storage capacity for organizations with at least five users. Deconstructing "Unlimited" Storage Microsoft's "unlimited" storage is a managed, multi-tiered system. It's not an automatic allocation but a structured pathway that requires administrative action and is contingent on demonstrated need. The most critical prerequisite is the **five-user minimum**; tenants with fewer than five Plan 2 licenses are capped at 1 TB per user. Storage Tier Capacity Trigger Action Required Default 1 TB License assignment None Admin-Managed Up to 5 TB User approaches 1 TB limit Admin increases quota via M365 Admin Center Support-Managed Up to 25 TB User fills >90% of 5 TB Admin opens support ticket with Microsoft SharePoint Expansion 25 TB+ User fills >90% of 25 TB Automatic provisioning of 25 TB SharePoint sites Interactive Cost Projection See how the costs add up. While Plan 2 is more expensive, its value for compliance can prevent far greater costs from data breaches or legal fees. Advanced Security & Compliance: The Core of Plan 2 The $5 price difference is not for storage; it's an insurance policy. Plan 2 integrates Microsoft Purview tools that are essential for mitigating risk in modern business. This transforms OneDrive from a simple file repository into a key component of your data governance strategy. Infographic: How Data Loss Prevention (DLP) Works 1. Define Policy Admin sets rules to identify sensitive data (e.g., PII, financial info). → 2. Scan Content System automatically scans files in OneDrive for policy matches. → 3. Protect Blocks unsafe sharing, warns users, and alerts compliance officers. eDiscovery & Legal Hold In the event of litigation, you are legally required to preserve electronic information. Plan 2 provides the tools to do this defensibly, ensuring data integrity for legal review without disrupting user workflows. Legal Hold Enabled: User's OneDrive is placed on hold. User Action: Deletes a critical document. System Response: File is removed from user's view but is secretly retained in a secure Preservation Hold Library, available for legal discovery. The Microsoft 365 Ecosystem Context Evaluating OneDrive in a vacuum is a mistake. For just $1 more than Plan 1, Microsoft 365 Business Basic offers the same storage plus a full collaboration suite, making it a far better value for most businesses. Feature OneDrive Plan 1 ($5) M365 Business Basic ($6) OneDrive Plan 2 ($10) M365 E3 ($36) OneDrive Storage 1 TB 1 TB Unlimited (Tiered) Unlimited (Tiered) Business Email (Exchange) ❌ ✅ ❌ ✅ Microsoft Teams ❌ ✅ ❌ ✅ DLP & eDiscovery ❌ ❌ ✅ ✅ Navigating 2025 Policy Updates Microsoft is tightening its policies, shifting more administrative responsibility to you. Inaction can now lead to direct financial costs and security risks. The Unlicensed Account Mandate A critical change is the automatic archival of OneDrive accounts 90 days after a user's license is removed. This policy is designed to force proactive offboarding procedures. Financial Impact: Reactivating an archived account costs $0.60/GB, plus a monthly storage fee of $0.05/GB. Proactive offboarding is now a financial imperative, not just a best practice. Evolving Sharing Protocols Microsoft is enhancing security for external sharing. External users will now be required to sign in with a Microsoft account to perform bulk downloads from view-only shared folders. This change provides a clearer audit trail and makes anonymous, large-scale data exfiltration more difficult. Interactive Decision Flowchart Navigate this flowchart to quickly identify the most suitable plan for your organization's specific needs. Start with the first question and follow the path that best describes your requirements. START HERE: Key Requirement Analysis Do you operate in a regulated industry or require advanced compliance features like DLP, eDiscovery, and Legal Hold? YES OneDrive Plan 2 This is your minimum requirement. Also evaluate M365 E3/E5 for comprehensive enterprise features. NO Do you need a full collaboration suite (Business Email, Microsoft Teams)? YES M365 Business Basic / Standard These bundles offer far superior value over standalone OneDrive plans. NO OneDrive Plan 1 Suitable for basic storage needs if you use a competing collaboration suite (e.g., Google Workspace). Total Cost of Ownership (TCO) Calculator Go beyond the sticker price. This calculator helps you estimate the true annual cost of each plan by factoring in potential hidden fees from the 2025 policy updates, such as data archival for departing employees. Plans without advanced governance (like Plan 1) carry a higher financial risk if offboarding is not managed perfectly. Your Organization's Profile Total Number of Users Departing Employees per Year Avg. Data per Departing Employee (GB) Calculate Estimated TCO Estimated Annual Cost Comparison Enter your details and click calculate to see your results. Decision Framework & Recommendations Use this matrix to find the best starting point for your organization. The right choice depends on your industry, size, and risk tolerance. Business Profile Primary Need Recommended Plan Rationale Startup (<20, Non-Regulated) Cost-effective suite M365 Business Basic Best entry-level value with email & Teams. SMB (20-300, Non-Regulated) Full productivity suite M365 Business Standard Adds desktop Office apps for a complete solution. SMB (Regulated) Compliance & Security OneDrive Plan 2 or M365 E3 Plan 2 is the minimum for compliance tools. E3 is a better value if advanced security is also needed. Large Enterprise (>300) Advanced everything M365 E3 or E5 Comprehensive security & management are essential at this scale. Strategic Recommendations for IT Leadership To future-proof your cloud data strategy, move beyond simple license selection and adopt a governance-focused approach. Default to Bundled Subscriptions: For most organizations, the bundled M365 plans offer superior financial and functional value. The standalone OneDrive plans serve only niche purposes. Treat Storage as a Governance Issue: The decision for Plan 2 should be driven by legal, compliance, and security teams. The investment is in risk mitigation, not just terabytes. Prepare for the 2025 Administrative Shift: Develop a formal employee de-provisioning process that explicitly handles OneDrive data to avoid new archival fees and potential data loss. Conduct Continuous Licensing Reviews: Your needs will evolve. Annually review your Microsoft licensing to ensure it remains the most cost-effective solution for your organization's changing security and compliance posture.
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