SharePoint and OneDrive standalone plan retirement: licensing paths to 2029

Microsoft is retiring the standalone SharePoint Online Plan 1 and Plan 2 and OneDrive for Business Plan 1 and Plan 2 subscriptions: new sales ended after May 31, 2026, renewals stop in January 2027, and the plans stop working in December 2029. Every user on those plans needs another license that includes SharePoint and OneDrive, usually a Microsoft 365 Business or Enterprise suite, and any storage the plans were bought for needs to move to a storage add-on or pay-as-you-go storage. The safe path is to inventory who holds the plans, recalculate tenant and OneDrive storage, then add the replacement license before removing the old one, so no OneDrive account ever goes unlicensed.

Who this is for and what you will have

This guide is for Microsoft 365 and SharePoint administrators, and for whoever owns the licensing budget, in tenants that bought SharePoint Online or OneDrive for Business as standalone plans.

By the end you will have:

• A list of every standalone SharePoint and OneDrive SKU in the tenant and the users assigned to each.
• A storage calculation showing what the tenant pool and each OneDrive will look like after the change.
• A replacement option chosen for each group of users.
• A tested PowerShell procedure to move users to the new license without an unlicensed window.
• A plan for the accounts you decide not to relicense.

What is retiring and when

Microsoft announced the change on January 28, 2026 in a Partner Center advisory. The reason given is low demand for standalone offerings, unintended or nonstandard usage, and the cost of maintaining the plans. Microsoft 365 suites remain the primary way to get SharePoint and OneDrive.

The end-of-service milestone says customers must move to Microsoft 365 suites, capacity packs or pay-as-you-go storage options. How long you can keep a given subscription between January 2027 and December 2029 depends on when your current term ends, so check the renewal date of each subscription rather than assuming you have until 2029.

The four SKUs

These are the product names and string IDs from Microsoft's licensing service plan reference. The string ID is what Get-MgSubscribedSku returns as SkuPartNumber.

SHAREPOINTSTANDARD and SHAREPOINTENTERPRISE are also the names of the SharePoint service plans inside many suites; only the standalone product SKUs are retiring.

Prerequisites

• Microsoft Graph PowerShell SDK, with permission to read subscribed SKUs (Organization.Read.All) and assign licenses (User.ReadWrite.All or LicenseAssignment.ReadWrite.All). The signed-in account needs a role such as License Administrator or User Administrator.
• SharePoint Online Management Shell and the SharePoint Administrator role for the OneDrive storage steps.
• Billing access to buy replacement licenses or storage: Billing account or profile owner or contributor on a Microsoft Customer Agreement, or at least Billing Administrator on a Microsoft Online Subscription Agreement.
• For pay-as-you-go storage, an Azure subscription and resource group where you have the Owner or Contributor role.
• If the standalone plans were bought through a Cloud Solution Provider or Volume Licensing, the contact details of that partner or reseller. Some storage add-ons can't be bought directly from Microsoft in those channels.

Step 1: Inventory the standalone licenses

Start with what the tenant owns. In the Get-MgSubscribedSku output, PrepaidUnits.Enabled is the number of licenses purchased and ConsumedUnits is the number assigned to users; ConsumedUnits is what you will need to replace.

Connect-MgGraph -Scopes Organization.Read.All, User.Read.All
 
$retiring = 'SHAREPOINTSTANDARD','SHAREPOINTENTERPRISE','WACONEDRIVESTANDARD','WACONEDRIVEENTERPRISE'
 
$skus = Get-MgSubscribedSku -All | Where-Object SkuPartNumber -in $retiring
$skus | Select-Object SkuPartNumber, SkuId, ConsumedUnits,
    @{ n = 'Enabled'; e = { $_.PrepaidUnits.Enabled } }

Then list the users holding each SKU. The assignedLicenses/any() filter needs -ConsistencyLevel eventual and -All; without -All, Get-MgUser returns only the first 100 accounts.

$report = foreach ($sku in $skus) {
    Get-MgUser -Filter "assignedLicenses/any(x:x/skuId eq $($sku.SkuId))" `
        -ConsistencyLevel eventual -CountVariable c -All `
        -Property Id, UserPrincipalName, DisplayName, AssignedLicenses, UsageLocation |
    ForEach-Object {
        [pscustomobject]@{
            Sku               = $sku.SkuPartNumber
            UserPrincipalName = $_.UserPrincipalName
            DisplayName       = $_.DisplayName
            UsageLocation     = $_.UsageLocation
            OtherLicenses     = ($_.AssignedLicenses.SkuId | Where-Object { $_ -ne $sku.SkuId }).Count
        }
    }
}
$report | Export-Csv -Path .\standalone-plan-users.csv -NoTypeInformation

The OtherLicenses column matters. A user who already holds a suite that includes SharePoint and OneDrive has a redundant standalone license that you can simply remove. A user whose only license is the standalone plan needs a replacement before you remove anything.

Step 2: Recalculate storage

Standalone plans were often bought for storage, so the replacement has to cover it. There are two separate pools.

SharePoint tenant storage

Tenant storage is a base allocation plus a contribution from each license. The SharePoint limits page lists:

The pool doesn't include users' OneDrive storage. Replacing SharePoint Plan 1 seats one-for-one with a Business or Enterprise suite leaves the pool unchanged. Replacing them with frontline licenses shrinks it by 10 GB per seat. Replacing OneDrive standalone seats with a suite grows it.

To see current usage, open the SharePoint admin center and select Active sites; the top of the page shows storage used across all sites and the total for the subscription. The figure lags by 24 to 48 hours. A tenant that keeps running above its limit is at risk of being put into read-only mode, so do this calculation before you remove any licenses.

OneDrive storage per user

The OneDrive service description lists 1 TB per user for the Business plans and for Microsoft 365 E3 and E5 (the enterprise plans can be increased to 5 TB), and 2 GB per user for Microsoft 365 F3. Export current OneDrive usage so you can spot users who would exceed the quota of their new license:

Connect-SPOService -Url https://contoso-admin.sharepoint.com
 
Get-SPOSite -IncludePersonalSite $true -Limit All -Filter "Url -like '-my.sharepoint.com/personal/'" |
    Select-Object Owner, Url, StorageUsageCurrent, StorageQuota |
    Export-Csv -Path .\onedrive-usage.csv -NoTypeInformation

StorageUsageCurrent and StorageQuota are in MB. Join this file to the user list from Step 1 on the owner's UPN. Anyone on a OneDrive standalone plan whose usage is above the quota of the license you plan to give them needs extra storage or a cleanup first. Old file versions are often a large share of that usage; the SharePoint version history limits guide shows how to trim them.

Step 3: Choose a replacement for each group

Sort the users from Step 1 into groups and pick one path per group.

Two functional differences are worth knowing when you compare. The SharePoint service description lists group-connected team sites, Microsoft 365 for the web integration and Teams integration as requiring a subscription that includes Office 365, so standalone SharePoint users who move to a suite gain these. And OneDrive is licensed for an individual's work files only; Microsoft states that storing system backups or departmental and organizational data in OneDrive isn't supported, and neither is assigning a per-user license to a bot, department or other non-human entity. If a standalone OneDrive license was being used as a storage bucket, move that content to a SharePoint site rather than buying a suite seat for it.

Storage options that replace storage-only purchases

The Microsoft 365 commerce documentation now lists four ways to add storage:

A OneDrive capacity pack can't be split across users, doesn't replace the user's OneDrive license and can't take a single user above 25 TB. If you set a lower storage limit for that user, raise it separately. The pay-as-you-go options aren't currently available to education, GCC or 21Vianet customers. Office 365 Extra File Storage is available for the Business plans, Microsoft 365 E3, E5, F1 and F3, Office 365 E1, E3 and E5, and SharePoint Online Plan 1 and Plan 2, among others. If you bought through Volume Licensing or a CSP, you can't buy it directly from Microsoft.

Step 4: Swap licenses without an unlicensed gap

A user keeps their OneDrive as long as they always hold some license that includes it, so add the new license first, confirm it, then remove the old one.

Every account needs a UsageLocation before a license can be assigned. Fix any blanks from the Step 1 report first:

Update-MgUser -UserId "megan@contoso.com" -UsageLocation US

Then move one pilot user:

Connect-MgGraph -Scopes User.ReadWrite.All, Organization.Read.All
 
$old = Get-MgSubscribedSku -All | Where-Object SkuPartNumber -eq 'SHAREPOINTSTANDARD'
$new = Get-MgSubscribedSku -All | Where-Object SkuPartNumber -eq 'SPE_E3'
$upn = "megan@contoso.com"
 
# 1. Add the replacement license
Set-MgUserLicense -UserId $upn -AddLicenses @{ SkuId = $new.SkuId } -RemoveLicenses @()
 
# 2. Confirm SharePoint and OneDrive service plans are enabled on the new license
Get-MgUserLicenseDetail -UserId $upn | Select-Object SkuPartNumber -ExpandProperty ServicePlans |
    Where-Object ServicePlanName -match 'SHAREPOINT|ONEDRIVE' |
    Select-Object SkuPartNumber, ServicePlanName, ProvisioningStatus
 
# 3. Remove the standalone license
Set-MgUserLicense -UserId $upn -AddLicenses @() -RemoveLicenses @($old.SkuId)

Replace SPE_E3 with the SkuPartNumber of the license you bought; run Get-MgSubscribedSku -All to see the exact values in your tenant. Once the pilot user confirms that their OneDrive and sites still work, loop over the CSV from Step 1 in batches.

If you use group-based licensing, the same order applies: add users to the group that assigns the new license, wait for assignment to complete, then remove them from the group or direct assignment that gives the standalone plan.

Step 5: Deal with accounts you won't relicense

Some standalone seats will belong to people who have left or to accounts that never needed a license. When you remove the license, the OneDrive account becomes unlicensed and follows Microsoft's unlicensed OneDrive policy:

The 365-day nonpayment clock applies from July 1, 2026 and doesn't apply to education, GCC or DoD tenants. Retention policies and legal holds don't preserve an unpaid, unlicensed account indefinitely. If you enable billing for unlicensed OneDrive accounts, Microsoft documents a reactivation fee of $0.60 per GB for the account you reactivate and a storage fee of $0.05 per GB per month for all unlicensed accounts unlicensed for longer than 93 days.

Move anything worth keeping to a SharePoint site or a licensed user's OneDrive before you remove the license. Track accounts in the SharePoint admin center under Reports > OneDrive accounts > View more details.

Verify the change

• Run the Step 1 script again. ConsumedUnits for the four retiring SKUs should fall to zero, or to the number of users you deliberately left for a later batch.
• Run Get-MgUser -Filter 'assignedLicenses/$count eq 0' -ConsistencyLevel eventual -CountVariable n -All to confirm you haven't created unlicensed users by accident.
• Check Active sites in the SharePoint admin center a day or two after the change and compare total storage with your Step 2 calculation.
• Check the OneDrive accounts report for new unlicensed accounts that match users you moved.
• Ask pilot users to test OneDrive, a few sites and library sync.

Troubleshooting

License assignment cannot be done for user with invalid usage location. The account has no UsageLocation. Set it with Update-MgUser -UsageLocation and retry. Accounts synchronized from on-premises Active Directory don't have a location by default.

Office 365 Extra File Storage doesn't appear in the add-on list. Either the subscription isn't on the eligible list, or the tenant buys through Volume Licensing or a CSP. Buy it through your partner or representative in that case.

The tenant is read-only after licenses were removed. Total storage is above the new limit. Reduce usage, buy SharePoint storage, or buy eligible licenses. After a purchase, Confirm purchase lifts read-only mode for up to 14 days while the new capacity is applied, and you can use it only once in a 365-day period.

A user's OneDrive storage reverts to its original value after you change it. Run the OneDrive storage diagnostic Microsoft provides in the Microsoft 365 admin center and follow its recommendations. Also remember that a quota above the storage included with the user's license is only possible when Microsoft 365 OneDrive Storage is enabled for the tenant.

Checklist

• Renewal dates recorded for every standalone SKU; user list exported.
• SharePoint pool and OneDrive quotas recalculated for the new license mix.
• Replacement chosen per group; storage add-ons or pay-as-you-go storage set up.
• UsageLocation set; pilot moved with add-then-remove, then batches.
• Content of accounts not being relicensed moved before license removal.
• Retiring SKUs at zero consumed units, no unexpected unlicensed accounts.

References

• Partner Center January 2026 announcements: retirement of standalone SharePoint Online and OneDrive for Business plans
• Buy more OneDrive and SharePoint storage capacity
• SharePoint limits
• SharePoint service description
• OneDrive service description
• Product names and service plan identifiers for licensing
• Assign Microsoft 365 licenses to user accounts with PowerShell
• View licensed and unlicensed Microsoft 365 users with PowerShell
• user: assignLicense
• Get-SPOSite
• License assignment cannot be done for user with invalid usage location (archived blog)
• Change a specific user's OneDrive storage space
• Manage unlicensed OneDrive user accounts