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OneDrive For Business Licensing Guide

OneDrive is Microsoft’s cloud-based storage service that allows users to store, share, and sync files across multiple devices. It is a core component of the Microsoft 365 suite and is often used alongside other services like SharePoint and Teams. When choosing a OneDrive plan, you’ll encounter two main options: OneDrive for Business Plan 1 and OneDrive for Business Plan 2.


OneDrive for Business is a cloud storage service designed for businesses, enabling users to store files, collaborate, and share content securely. It integrates seamlessly with the Microsoft 365 ecosystem, allowing users to access and share files from anywhere, on any device.


Key Differences Between OneDrive Plan 1 and Plan 2

Section titled “Key Differences Between OneDrive Plan 1 and Plan 2”
PlanStorage CapacityExpansion OptionsIdeal For
Plan 11 TB per userFixed storageSmall to medium-sized businesses with standard storage needs
Plan 21 TB per user + unlimited expansionUnlimited storage (admin can request additional storage at no extra cost)Large organizations or high-volume data users
FeaturePlan 1Plan 2Business Value
Basic RecoveryRecycle bin recovery for up to 93 daysIncludedStandard file restoration needs
Files RestoreNot availableRecover entire OneDrive to previous point within last 30 daysProtection against mass deletion, ransomware, or corruption
CapabilityPlan 1Plan 2Business Impact
Basic Access ControlsEssential access controls and sharing permissionsIncludedStandard data protection
Advanced DLPNot includedCreate policies to identify, monitor, and protect sensitive informationGDPR, HIPAA, and regulatory compliance
FeaturePlan 1Plan 2Business Benefits
Basic SecurityEncryption for data in transit and at rest, basic complianceIncludedEssential security protection
Advanced SecurityNot availableAdvanced Security Management, In-Place Holds, eDiscovery, Legal HoldsEnhanced compliance for regulated industries
CapabilityPlan 1Plan 2Business Value
Basic VersioningTrack changes and revert to earlier versionsIncludedSimple version control
Advanced GovernanceNot availableClassify, retain, and delete information based on governance policiesComprehensive data lifecycle management
FeaturePlan 1Plan 2Use Case
Cloud-OnlyIdeal for standalone cloud solutionIncludedPure cloud environments
Hybrid IntegrationNot availableIntegrate on-premises infrastructure with cloud OneDriveOrganizations transitioning to cloud
CapabilityPlan 1Plan 2Business Benefits
Basic SearchSearch for files and folders within OneDriveIncludedStandard file discovery
Enhanced SearchNot availableContent Search and eDiscovery across OneDrive, SharePoint, and ExchangeLegal and compliance investigations

Feature CategoryOneDrive Plan 1OneDrive Plan 2
Storage1 TB per user1 TB + unlimited expansion
File RecoveryBasic recycle binAdvanced Files Restore (30-day history)
Data ProtectionBasic securityAdvanced DLP and compliance
GovernanceBasic versioningAdvanced information governance
Hybrid SupportCloud-onlyFull hybrid integration
SearchBasic searchAdvanced eDiscovery capabilities

Organization TypeRecommended PlanKey Considerations
Small to Medium-Sized BusinessesOneDrive Plan 1Cost-effective with 1 TB storage per user and essential collaboration features
Enterprises and Regulated IndustriesOneDrive Plan 2Advanced compliance, security, and unlimited storage for sensitive data handling
Organizations in TransitionOneDrive Plan 2Hybrid support for cloud migration while maintaining on-premises resources

Both OneDrive Plan 1 and Plan 2 offer powerful cloud storage solutions, but they cater to different organizational needs:

Ideal for: Small to medium-sized businesses requiring essential cloud storage and collaboration features at an affordable price point.

Key Benefits:

  • Cost-effective solution with 1 TB storage per user
  • File sharing and basic collaboration capabilities
  • Essential security features for standard business use

Ideal for: Larger organizations or regulated industries requiring advanced data protection, compliance, and unlimited storage capabilities.

Key Benefits:

  • Unlimited storage expansion capability
  • Advanced security and compliance features
  • Enhanced recovery and governance tools
  • Hybrid deployment support

Key Takeaway: Choose Plan 1 for cost-effective basic cloud storage needs, and Plan 2 when your organization requires advanced compliance, unlimited storage, and sophisticated data protection features for regulatory or business continuity purposes.

By understanding these key differences, you can select the OneDrive plan that best meets your organization’s requirements for cloud storage, collaboration, and compliance.