Direct answer: Microsoft 365 Backup is a pay-as-you-go service billed on protected content, with an official list price of $0.15/GiB-month (not per-user licensing). At 1 TiB = 1,024 GiB: 1 TiB of protected content is about $153.60/month ($1,843.20/year), 10 TiB about $1,536/month ($18,432/year), and 100 TiB about $15,360/month. The billing basis is “user-facing protected content + deleted/versioned data retained for recovery”: OneDrive/SharePoint including the first-stage recycle bin, Exchange mailboxes plus online archives, plus SharePoint/OneDrive second-stage recycle bins and deleted/versioned mailbox items. Restore-point frequency does not affect cost; deleted/versioned data stops being billed when the recovery window expires; Microsoft states there are no additional Azure API/storage charges. Decision rule: divide a third-party per-user/year quote by $1.80 to get Microsoft 365 Backup's break-even GiB/user; for example, $60/user/year ≈ 33.3 GiB/user.
This guide is for Microsoft 365 administrators, IT operations, security and procurement teams. It explains Microsoft 365 Backup billing, 1TiB/10TiB/100TiB TCO, differences from native retention/eDiscovery, recovery windows/points, third-party per-user backup break-even, hidden costs and a 90-day checklist. Prices and features come from Microsoft Learn's “Pricing model for Microsoft 365 Backup” and “Overview of Microsoft 365 Backup”, plus the Microsoft 365 Enterprise Backup product page (all accessed 9 November 2026). Official price facts, editorial calculations and exclusions are kept separate. This is not procurement advice.
(1) The unit is GiB-month, not users: 1 TiB is about $153.60/month—calculate protected GiB before comparing unit prices. (2) Restore-point frequency does not affect cost; the bill is driven by protected content, second-stage recycle bins, online archives and the retention window. (3) Native retention/eDiscovery is mainly for compliance retention and discovery, not a fast full-site/mailbox restore backup; design the two for different RPO/RTO roles.
Billing basis: $0.15/GiB-month on protected content
Microsoft 365 Backup bills protected content per GiB-month at an official list price of $0.15. Protected content = user-facing OneDrive/SharePoint size (including the first-stage recycle bin) + active user/shared mailboxes and their online archives + deleted/versioned data retained for recovery (SharePoint/OneDrive second-stage recycle bins, deleted/versioned mailbox items). If a site/mailbox is removed from the protection policy, its size at removal continues as the “live” proxy until all restore points expire; cost will not keep growing after removal. Restore-point frequency does not affect cost; deleted/versioned data stops being billed when the recovery window expires; Microsoft states there are no additional Azure API/storage charges.
| Billing item | Counted? | Note |
|---|---|---|
| OneDrive/SharePoint live size | Yes | Includes first-stage recycle bin; usage reports |
| Exchange mailbox + online archive | Yes | Active user/shared mailboxes |
| SharePoint/OneDrive second-stage recycle bin | Yes | Deleted data retained for recovery |
| Deleted/versioned mailbox items | Yes | Retained within the recovery window |
| Restore-point frequency | No | Official: no material cost impact |
| Azure API/storage | No | Official: no additional charges |
Source: Microsoft Learn, Pricing model for Microsoft 365 Backup (9 November 2026). Editorial summary; billing follows the official page and bill.
TCO: 100GiB / 1TiB / 10TiB / 100TiB
At $0.15/GiB-month (1 TiB = 1,024 GiB): 100 GiB about $15/month ($180/year); 500 GiB about $75/month ($900/year); 1 TiB about $153.60/month ($1,843.20/year); 10 TiB about $1,536/month ($18,432/year); 100 TiB about $15,360/month ($184,320/year). These exclude partner fees, administrator labor, migration/drills and possible network/storage (Microsoft says no additional Azure API/storage charges).
| Protected content | GiB | Monthly | Annual |
|---|---|---|---|
| 100 GiB | 100 | 15.00 | 180.00 |
| 500 GiB | 500 | 75.00 | 900.00 |
| 1 TiB | 1,024 | 153.60 | 1,843.20 |
| 10 TiB | 10,240 | 1,536.00 | 18,432.00 |
| 100 TiB | 102,400 | 15,360.00 | 184,320.00 |
Editorial calculation: GiB × $0.15; annual ×12; tax/discounts/partners/labor excluded; the official unit is GiB (calculator labels may say GB).
Difference from native retention/eDiscovery
Native retention/eDiscovery targets compliance retention, legal discovery and audit; it can prevent ordinary user deletion but is not the same as a business-continuity backup: it typically does not provide full-site/full-OneDrive rollback, fast full-mailbox restore or a recovery window isolated from retention policy. Microsoft 365 Backup's value is fast backup/fast restore: sites/OneDrive can roll back to a point in time, mailboxes can be restored in full or by search; the recovery window is isolated from Purview retention/deletion policies; it also offers a 90-day offboarding recovery grace period and multi-admin notifications. They are complementary, not substitutes—design one for compliance retention and the other for fast recovery.
| Capability | Native retention/eDiscovery | Microsoft 365 Backup |
|---|---|---|
| Primary purpose | Compliance retention/discovery/audit | Business continuity/fast restore |
| Full-site/OneDrive rollback | Usually not the goal | Yes, to a point in time |
| Mailbox restore | Retention/search/export | Full or granular restore |
| Recovery window | Per retention policy | 3/6 months or 1–10 years (Exchange 1/2 years) |
| Relationship to retention | Is the retention policy | Recovery window isolated from Purview retention/deletion |
Source: Microsoft Learn, Overview of Microsoft 365 Backup (9 November 2026). Editorial summary; specific capabilities follow official documentation.
Recovery window and restore points
Recovery windows are configured per workload: OneDrive/SharePoint can be 3 months, 6 months or 1–10 years; Exchange 3 months, 6 months, 1 year or 2 years; default 1 year. Restore points: 10-minute granularity for the prior two weeks for full account restores, then weekly snapshots through the configured recovery window (up to 10 years). Backup typically completes within hours; restore performance varies with content size. Limits: up to 100 backup policies per workload and 100,000 items per policy; contact Microsoft beyond that.
| Item | OneDrive/SharePoint | Exchange |
|---|---|---|
| Recovery window | 3/6 months or 1–10 years | 3/6 months, 1 or 2 years |
| Default | 1 year | 1 year |
| Restore points | 10 minutes for prior 2 weeks; weekly snapshots beyond | 10 minutes for prior 2 weeks; weekly snapshots beyond |
| Limits | 100 policies/workload; 100,000 items/policy | Same |
Source: Microsoft Learn, Overview of Microsoft 365 Backup (9 November 2026). Editorial summary; availability/regions follow official documentation.
Third-party per-user backup break-even
Microsoft 365 Backup annual cost per user = $0.15×12×GiB/user = $1.80×GiB/user/year. Plug in a third-party “per user/year” quote X: break-even GiB/user = X ÷ 1.80. For example, $36/user/year ≈ 20 GiB/user; $60 ≈ 33.3 GiB; $120 ≈ 66.7 GiB; $240 ≈ 133.3 GiB. If actual protected GiB/user is below that, the Microsoft usage model is cheaper; above it, third-party per-user may be cheaper. This formula requires no guess at vendor prices—just plug in the quote.
| Third-party quote (/user/year) | Break-even GiB/user | Meaning |
|---|---|---|
| 36 | 20.0 | Below 20 GiB/user, usage model cheaper |
| 60 | 33.3 | Below 33.3 GiB/user, usage model cheaper |
| 120 | 66.7 | Below 66.7 GiB/user, usage model cheaper |
| 240 | 133.3 | Below 133.3 GiB/user, usage model cheaper |
Editorial calculation: X ÷ 1.80; third-party minimums/bundles/feature differences excluded; align quotes on equivalent workload/retention.
Hidden costs: seven items beyond the bill
Common add-ons: content growth (OneDrive/SharePoint/mailbox growth directly adds GiB), second-stage recycle bins/deleted versions (counted within the recovery window), online archives (Exchange archives count), recovery window (longer windows keep deleted/versioned data longer and cost more), partner solutions (billed through the partner with different pricing/features), administrator/drills (policy, restore drills, audit) and data cleanup/archiving (reduces protected GiB). Restore-point frequency does not affect cost—do not cut frequency to save money.
| Cost item | Trigger | Control |
|---|---|---|
| Content growth | Users/sites/mailboxes grow | Quotas, cleanup, archiving |
| Second-stage recycle bin | Deleted/versioned retention | Align with recovery window |
| Online archive | Exchange archive enabled | Enable only for compliance needs |
| Recovery window | 1–10 years/1–2 years | Set by RPO/RTO, not maximum |
| Partner solution | Billed through partner | Compare features/price/support |
| Admin/drills | Policy/restore/audit | Automation, regular drills |
| Data cleanup | Redundant/old data | Clean/archive to reduce GiB |
Sources: Microsoft Learn pricing/overview docs (9 November 2026). Editorial summary; billing follows the official page and bill.
How to choose: compliance retention, fast restore and budget
Start with the need: compliance retention/discovery/audit only → native retention/eDiscovery (but still assess whether RTO is met); fast full-site/mailbox restore after ransomware or accidental deletion → Microsoft 365 Backup or a third-party backup. Then workload: only SharePoint/OneDrive/Exchange and prefer usage-based → Microsoft 365 Backup; broader workloads/on-prem/hybrid/long-term archive → third-party, compare its per-user quote with the $1.80×GiB break-even. Finally budget: large content/low user count may be expensive per GiB; calculate GiB/user first, while small content/many users usually favors the usage model.
| Scenario | Prefer | Check first |
|---|---|---|
| Compliance retention/discovery/audit | Native retention/eDiscovery | Whether RTO/restore granularity is met |
| Fast full-site/mailbox restore | Microsoft 365 Backup | Protected GiB, recovery window |
| Large content/low users | Usage vs per-user comparison | GiB/user, growth |
| Small content/many users | Microsoft 365 Backup | Usage bill, limits |
| Broader workloads/hybrid | Third-party backup | Quote, features, support |
| Partner solution | Partner billing | Price/features/exit terms |
Editorial selection framework, not a vendor recommendation; features/compliance/budget follow the business and official docs.
90-day checklist
Use the first 90 days to close “content inventory → RPO/RTO → pilot → restore drill → cost model → rollout.” Weeks 1-2: pull OneDrive/SharePoint/Exchange/archive/recycle-bin sizes; weeks 2-4: define recovery windows, RPO/RTO and protection scope; weeks 4-6: pilot policies on a few sites/mailboxes; weeks 6-8: run full-site/full-mailbox/granular restore drills and measure time; weeks 8-10: model GiB and compare third-party per-user quotes; weeks 10-12: roll out, monitor growth and drill quarterly. Do not treat “retention policy enabled” as “backup.”
FAQ
How is Microsoft 365 Backup billed?
Per GiB-month of protected content at an official list price of $0.15, pay-as-you-go, not per-user licensing. 1 TiB is about $153.60/month ($1,843.20/year).
What content is counted?
OneDrive/SharePoint user-facing size (including first-stage recycle bin), Exchange active/shared mailboxes and online archives, SharePoint/OneDrive second-stage recycle bins, and deleted/versioned mailbox items; restore-point frequency is not counted.
Does longer retention cost more?
Live content cost is unchanged; a longer recovery window keeps deleted/versioned data longer and adds GiB, so cost may rise. Restore-point frequency does not affect cost.
How is it different from native retention?
Native retention/eDiscovery handles compliance retention, discovery and audit; Microsoft 365 Backup handles fast backup/restore (full-site/OneDrive rollback, full/granular mailbox restore), with a recovery window isolated from Purview retention/deletion policies.
Which workloads are covered?
SharePoint sites, OneDrive accounts and Exchange mailboxes; Teams and other workloads are not covered. For broader coverage, evaluate third-party/partner solutions.
How much is 1 TiB?
1 TiB = 1,024 GiB × $0.15 = $153.60/month, $1,843.20/year; 10 TiB about $1,536/month; 100 TiB about $15,360/month. Tax/discounts/partners/labor excluded.
How do we compare third-party per-user pricing?
Break-even GiB/user = third-party per-user annual price ÷ $1.80. For example, $60/user/year ≈ 33.3 GiB/user; below that the usage model is cheaper, above it per-user may be cheaper.
Are there extra Azure charges?
Microsoft states that although Azure is the payment processor, there are no additional Azure API/storage charges beyond Microsoft 365 Backup usage; partner solutions bill through the partner.
Research method and limitations
This article separates “official price facts” from “editorial calculations.” The $0.15/GiB-month price, billing basis, restore-point frequency not affecting cost and no additional Azure API/storage charges come from Microsoft Learn's “Pricing model for Microsoft 365 Backup.” Coverage, recovery windows, restore points, limits, GCC and partner solutions come from “Overview of Microsoft 365 Backup”; product positioning references the Microsoft 365 Enterprise Backup page (9 November 2026). TCO, third-party break-even, hidden costs and the 90-day checklist are editorial.
Eight limitations: (1) public list prices only, excluding tax/discounts/partner markups; (2) 1 TiB = 1,024 GiB; (3) administrator labor, migration/drills and possible network/storage are excluded (Microsoft says no extra Azure API/storage, but other costs may exist); (4) not all partner solutions/minimums/feature differences are covered; (5) no real large-scale backup/restore benchmark; (6) native retention/eDiscovery capabilities are summarized—see Purview docs; (7) Teams and other workloads are out of scope; (8) prices/features change, so recheck official pages and bills before purchase.
Sources and basis
- Microsoft Learn, Pricing model for Microsoft 365 Backup: learn.microsoft.com/microsoft-365/backup/backup-pricing. $0.15/GiB-month, billing basis, restore-point/Azure charges. Accessed 9 November 2026.
- Microsoft Learn, Overview of Microsoft 365 Backup: learn.microsoft.com/microsoft-365/backup/backup-overview. Coverage, recovery windows, restore points, limits, GCC/partners. Accessed 9 November 2026.
- Microsoft 365 Enterprise Backup: microsoft.com/microsoft-365/enterprise/backup. Product positioning/capability overview. Accessed 9 November 2026.
Data cut-off 9 November 2026; prices/features follow the Microsoft official page and bill; this is not procurement, commercial or legal advice.