License & Subscription Issues

Do OneDrive Files Need Backup When Changing Microsoft 365 Licenses?

Rana Garcia Oct 1, 2026 868 views

Question details

Users need to know whether backing up OneDrive data is necessary when switching between Microsoft 365 E1 and E3 subscription licenses.

Do OneDrive Files Need Backup When Changing Microsoft 365 Licenses?

Product: Microsoft 365 / OneDrive
Device & OS: not provided
Scenario: An administrator or user is preparing to upgrade or downgrade their Microsoft 365 subscription plans (such as moving between E1 and E3).
Observed behavior: The goal is to understand the impact of Microsoft 365 license changes on OneDrive files, specifically regarding storage limits, data retention, and when a manual backup is required.

Before you start

Before proceeding with any license changes, verify the current OneDrive storage usage for all affected users in the Microsoft 365 Admin Center to prevent unexpected read-only limitations.

Solution 1Recommended

Manage Storage When Downgrading from E3 to E1

Essential steps to prevent data loss or read-only states when moving to a Microsoft 365 license with lower storage limits.

Microsoft 365 E3 licenses typically provide up to 5 TB of OneDrive storage per user, whereas E1 licenses generally offer up to 1 TB. If a user's data exceeds 1 TB during a downgrade, their OneDrive account will become read-only until the data is reduced. It is highly recommended to back up or delete excess files before applying the new license.

Check current storage usage

Sign in to the Microsoft 365 Admin Center, navigate to 'Active users', select the user, and check their current OneDrive storage usage under the OneDrive tab.

Reduce or back up excess data

Instruct users who exceed the 1 TB threshold to delete unnecessary files or back up their excess data to a local drive or alternative cloud storage.

Reassign the license

Once the storage is confirmed to be under the 1 TB limit, proceed to unassign the E3 license and assign the new E1 license to the user account.

Manage Storage When Downgrading from E3 to E1

30-Day Grace Period: If a user's license expires before a replacement is assigned, Microsoft 365 generally provides a 30-day grace period during which users can still access their OneDrive data. Always assign the replacement license promptly to avoid permanent deletion.

Solution 2

Data Preservation When Upgrading from E1 to E3

Understanding data continuity when upgrading to a higher-tier Microsoft 365 license.

Free Microsoft Office alternative

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Frequently Asked Questions

Will I immediately lose my OneDrive files if my Microsoft 365 license expires?

No. Microsoft 365 generally provides a 30-day grace period after a subscription license expires. During this time, users can still access and download their data. However, you must assign a replacement license within this window to prevent eventual data deletion.

What happens if my OneDrive exceeds 1 TB after downgrading to an E1 license?

If your stored data exceeds the 1 TB limit of the E1 license, your OneDrive account will become read-only. You will not be able to upload new files or edit existing ones until you delete or back up enough files to bring your storage below the 1 TB threshold.

Do I need to manually migrate my data when upgrading from an E1 to an E3 license?

No manual data migration or backup is required when upgrading licenses. As long as the user account remains exactly the same, all existing OneDrive files and folder structures are automatically preserved and transitioned to the new plan.

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