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Microsoft has announced a significant change to its storage policy for Microsoft 365 Family, Premium, and Pro plans. The company states that these subscriptions will shift from an assigned 1TB of cloud storage per user to a shared 2TB limit for all users on the account. This adjustment means a subscription shared across six users will see its total capacity reduced by 66.6%. Microsoft noted this change will apply to renewals after May 2, 2027, unless subscribers alter their plans earlier. Some affected users may receive bonus storage when switching to this model, though specific eligibility requirements were not provided.

The company explained that this shift allows cloud storage to automatically go where it is needed most, reducing the likelihood of individual users hitting limits. They also stated that unused storage benefits the entire family and that additional purchases by a main subscriber benefit everyone. While Microsoft did not raise subscription prices, the move aims to reduce server burdens and encourage those needing more than 1TB to switch from the Personal plan ($99.99 annually) to the Family plan ($129.99 annually). However, families with multiple large users might still face costs for extra capacity starting at $1.99 per month for 200GB.

This policy change appears to be a response to an industry-wide storage shortage, where hard drive prices surged by 46% from September 2025 to January 2026. Enterprise SSDs are also affected, with 30TB drives now costing $22,600 and supply remaining sold out until 2027. Other providers have faced similar issues; Google cut its free cloud storage limit from 15GB to 5GB pending security measures, while Backblaze updated terms to potentially throttle accounts exceeding typical usage patterns.