Taming the Tide: Controlling Your SharePoint Storage Costs 

SharePoint is a powerful platform for managing content and collaboration across teams—but keeping storage costs in check can be a challenge. As files multiply and usage scales, it’s easy for expenses to grow unnoticed until they become a budget concern. 
 
This isn’t an isolated issue. It’s something we regularly hear from organisations looking for practical ways to bring their SharePoint costs back under control. In this article, we break down the core strategies worth considering, highlighting where each one fits best—and where it might fall short. 

 
What’s Driving SharePoint Storage Costs? 

Before we explore solutions, it’s important to understand why SharePoint storage can become a significant expense. In most organisations, the problem isn’t one single factor—it’s a mix of habits, defaults, and gaps in governance. 

• Unchecked File Accumulation: New files are added daily—project docs, meeting notes, quick uploads—and without a plan for what to keep, archive, or delete, the volume builds up fast. Older or rarely accessed files often sit untouched but still count against your storage quota. 

• Version History: SharePoint’s robust versioning capabilities are essential for collaboration and recovery. But for files with constant edits, versioning can double or triple their footprint over time. Multiply that across teams, and the impact adds up quickly. 

• Heavy Media Usage: Large files, especially videos and high-res images, consume space at a much faster rate than documents or spreadsheets. Teams leveraging Microsoft Copilot or Teams Premium features that involve video recordings are likely to see this spike even faster. 

• Retention Policies (or Lack Thereof): When there are no policies defining how long data should be kept, or what’s worth keeping, nothing gets removed. As a result, storage keeps growing, regardless of whether the content still serves a purpose. 

 
How to Keep SharePoint Storage Costs in Check 

There’s no silver bullet, but there are a few proven strategies that can help you take back control. Let’s start with one of the most overlooked tools already at your disposal. 

1. Leveraging Microsoft 365 Archive (Native SharePoint Archiving Capabilities) 

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Microsoft 365 Archive lets you offload older, low-activity SharePoint sites into a more cost-effective storage tier. It’s a smart way to free up primary storage without deleting anything outright. 

Pros: 

• Significant Cost Savings: Archiving brings storage costs down by approximately 75%. You’re looking at around $0.08/NZD for archived data versus $0.33/GB on standard SharePoint storage. (These rates are ballpark figures—check your tenant for the latest numbers.) 

• Supports Compliance: Archived content still falls under your existing Microsoft 365 retention policies. That means you stay covered from a governance and compliance standpoint, without extra effort. 

• Built-In, Not Bolt-On: Utilises native SharePoint features to manage inactive content, with minimal licensing overhead. Storage is billed via Microsoft Syntex—a Microsoft 365 service that uses AI to automate content processing—on a pay-as-you-go basis through your Azure subscription. 

• Simple for Basic Scenarios: For organisations with clearly defined inactive sites, this can be a straightforward option. 

• Data Stays Accessible (if you plan ahead): Archived content remains within the Microsoft 365 environment. You can bring it back if and when it’s needed, though reactivation may take some coordination. 

Cons: 

• Potential Manual Identification: While automation is possible (see SharePoint Advanced Management below), the initial identification of archive candidates might require manual effort. 

• Limited Automation: Without SharePoint Advanced Management or Copilot for Microsoft 365, the process of archiving might lack full automation based on specific criteria. 

• Potential for User Inconvenience: Accessing reactivated content might involve a slight delay and require user awareness of the archive location. 

• Billing via Azure Subscription: Microsoft 365 Archive storage is billed through your Azure subscription using Syntex’s pay-as-you-go model. For many organisations, this creates a split in cost management—adding complexity to budgeting, reporting, and chargeback processes, especially if Azure and Microsoft 365 are handled by different teams. 
   

2. Implementing Intelligent Versioning in SharePoint 

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A recently added and exciting new capability for helping control storage usage is Intelligent Versioning. SharePoint’s versioning settings can now be optimised to balance the need for historical records with storage efficiency. You can configure the number of major and minor versions to retain for document libraries. By limiting these numbers, you can prevent excessive storage consumption due to version history. 

Pros: 

• Native Feature: It’s a built-in capability, requiring no additional costs. 

• Easy to Configure: Admins or site owners can configure version limits directly within each document library. 

• Reduces Redundant Storage: By capping the number of stored versions, you cut down on storage used by outdated file revisions—without impacting day-to-day collaboration. 

Cons: 

• Requires Careful Planning: Choosing how many versions to keep isn’t guesswork. You’ll need a solid understanding of your organisation’s recovery needs and compliance requirements. Setting the limits too low could lead to data loss. 

• Doesn’t Address Large Files or Inactive Content: Versioning control primarily focuses on the history of individual files, not the overall volume of data or the management of inactive content. 

• Lacks Granularity: You can’t set different policies for specific versions or based on time. 

• May Conflict with Retention Policies: Retention Policies can prevent Intelligent Versioning from automatically optimising older file versions, potentially hindering storage savings. 
   

3. Leveraging SharePoint Advanced Management 

Before turning to third-party tools, it’s worth checking whether SharePoint Advanced Management (Plan 1) fits the bill. This Microsoft 365 add-on (priced around $5 NZ per user, licensed for all internal users, excluding guests) provides advanced governance features for SharePoint and OneDrive, including enhanced archiving capabilities.  

Notably, many of these features, including automated Microsoft 365 Archive of sites, are already included if your organisation is licensed for Copilot for Microsoft 365. 

Pros: 

• Enhanced Governance: Offers advanced insights, controls, and automation for managing content lifecycles. 

• Automated Archiving: Automatically move inactive sites into Microsoft 365 Archive based on defined policies, significantly reducing manual effort. This is a key feature already available with Copilot for Microsoft 365. 

• Proactive Insights: Provides insights into site usage and activity, helping identify potential candidates for archiving or policy enforcement. 

• Integration with Microsoft Ecosystem: Seamlessly integrates with your existing Microsoft 365 environment. 

• Potentially More Cost-Effective than Third-Party: May offer a better return on investment compared to a full-fledged third-party Information Lifecycle Management (ILM) solution. 

Cons: 

• Additional Cost: Requires purchasing the add-on license for all internal users (unless you are already licensed for Copilot for Microsoft 365). 

• Learning Curve: Understanding and configuring the advanced features requires some learning and planning. 

 

4. When to Look at Third-Party Archiving and ILM Tools 

For organisations with complex requirements or strict regulatory needs, native Microsoft options might not go far enough. This is where third-party Information Lifecycle Management (ILM) tools come in. 

Solutions like AvePoint Opus provide features such as automated archiving based on configurable policies (e.g., inactivity, document age), external storage options, advanced search for archived content, and comprehensive audit trails. 

Pros: 

• Policy-Driven Automation: You can set up detailed rules to automatically archive content based on age, inactivity, metadata, or business context—freeing teams from manual cleanup. 

• Granular Control: Offers more sophisticated rules for identifying and managing archive candidates. 

• Offload to Cheaper Storage: Many platforms integrate with external storage providers, letting you shift older or less critical data away from SharePoint’s higher-cost tiers. 

• Enhanced Search and Compliance: Archived data remains accessible through advanced search and comes with built-in auditing features—helpful for both internal oversight and regulatory compliance. 

• Lifecycle Management: Beyond archiving, these tools often support full content lifecycle workflows, including retention schedules, automated deletion, and legal holds. 

Cons: 

• Additional Cost: Requires purchasing and managing a separate third-party solution (though this will reduce overall storage costs). 

• Implementation and Configuration: Getting up and running typically takes more effort than native Microsoft tools. 

• Vendor Lock-in: Relying on a third-party solution can create vendor dependency. 
   

5. Storing Large Files in Alternate Repositories  

If you’re dealing with large, rarely accessed files like videos, it often makes more sense to store them outside SharePoint. Services like Azure Files offer a scalable, lower-cost alternative. You can then link or embed these files within your SharePoint environment. 

Pros:  

• Cost Savings for Large Files: Azure Files typically comes in well below SharePoint’s cost per gigabyte—especially at scale. 

• Scalability: Azure Files is highly scalable, allowing you to accommodate growing storage needs. 

• Performance for Streaming/Access: Whether it’s streaming a video or opening a large file, Azure Files delivers the performance needed for media-heavy workloads. 

Cons: 

• Integration Complexity: Integrating external storage with SharePoint might require configuration and potentially custom development, especially if you want the experience to feel consistent for users. 

• Potential for Broken Links: If files are moved or renamed on the storage side without updating references in SharePoint, users may run into broken links. 

• Separate Management: You’ll need to manage storage, access controls, and auditing across both platforms—not just Microsoft 365. 

• User Training: Users may need to be trained on how to access and interact with files stored in the external repository. 
   

The Crucial Role of Retention Policies 

Retention Policies aren’t just for compliance—they’re critical for managing storage. By setting rules for how long data should be kept, organisations can automatically delete outdated content once its business or legal value expires and avoid unnecessary storage build-up and associated costs. 
 
They’re a foundational part of any SharePoint storage strategy. And because Microsoft 365 Archive respects these policies, your lifecycle rules apply across both active and archived data. 

Best Practices for Managing SharePoint Storage Costs 

No matter which tools you use, a strong foundation of storage governance makes the biggest difference.  

Here’s what we recommend: 

Best Practices	Recommendation
Establish Clear Retention Policies	Define how long different types of content need to be retained based on legal, regulatory, and business requirements, and ensure policies are in place for both retention and eventual deletion.
Educate Users on Storage Best Practices	Train users on responsible file management, including avoiding unnecessary file duplication and deleting obsolete content.
Audit Regularly	Keep an eye on where your storage is growing. Look for patterns, outliers, and opportunities to archive or clean up.
Implement Governance Policies	Define clear guidelines for content creation, storage, and disposal.
Consider Hybrid Approaches	Often, the best results come from combining native Microsoft features (like Intelligent Versioning and Microsoft 365 Archive), SharePoint Advanced Management (especially if you are already licensed for Copilot), and external storage where needed.

 
 
Build a Sustainable Strategy 

Managing SharePoint storage costs isn’t a one-time fix—it’s an ongoing effort that requires the right mix of tools, policies, and oversight. The key is to act early, be deliberate, and stay consistent. 

Start with what you already have—native tools like Intelligent Versioning and Microsoft 365 Archive. Layer in SharePoint Advanced Management if you need automation at scale. And where needed, explore third-party or external storage options to handle specialised needs. Above all, don’t overlook the basics: clear retention policies, regular audits, and user education. These are the low-effort, high-impact moves that build lasting control. 

Whichever path you choose—native tools, advanced automation, or external storage—the key is to act early. Small steps now can prevent much larger costs later. If you’re ready to build a smarter, more cost-effective SharePoint strategy, talk to Virtuoso about getting started.