Microsoft Introduces File-Level Archive for OneDrive and SharePoint

Microsoft is addressing a common pain point for organizations struggling with growing cloud storage costs through a new file-level archive feature coming to OneDrive and SharePoint. The capability, demonstrated in the latest episode of the Sync Up podcast, allows users to selectively archive individual files rather than entire sites, providing much-needed granularity for data lifecycle management.

The Storage Challenge Organizations Face

As companies accumulate years of documents, presentations, and spreadsheets in their cloud storage, a significant portion becomes inactive. Traditional approaches required either keeping everything in expensive active storage or using site-level archive, which moves entire SharePoint sites to cheaper storage but lacks precision.

The new file archive feature solves this by letting users right-click on specific files that haven't been accessed in years and move them to more cost-effective storage tiers. This approach maintains the benefits of archive storage—lower costs and reduced storage footprint—while preserving active content exactly where it belongs.

How File Archive Works

The demonstration showed a straightforward three-step process: select files, click archive, and confirm. What makes this particularly user-friendly is the 7-day instant undo window, addressing the common concern about accidental archiving. If someone archives a file by mistake, they can quickly restore it without navigating complex recovery processes.

This granular approach also has implications for AI-powered features. Microsoft noted that file archive can improve Copilot experiences by ensuring the AI assistant focuses on relevant, active content rather than sifting through years of outdated files. This could lead to more accurate and contextually appropriate responses from Microsoft's AI tools.

Timeline and Availability

File archive is scheduled for public preview in March 2026 for SharePoint sites. This phased rollout gives administrators time to prepare and test the feature before broader deployment. Looking further ahead, Microsoft has admin-driven archive policies on the roadmap for later in 2026, which would allow organizations to automate archiving based on custom rules and policies.

Strategic Implications for IT Departments

The introduction of file-level archive represents a significant shift in how organizations can manage their cloud storage strategy. Rather than making binary decisions about entire sites, IT departments can now implement more nuanced data lifecycle policies. This could lead to substantial cost savings, as companies can move only truly inactive files to cheaper storage while keeping frequently accessed content readily available.

The feature also aligns with broader trends in cloud cost optimization and data governance. As organizations become more sophisticated about their cloud spending, tools that provide granular control over storage costs become increasingly valuable. The ability to archive individual files while maintaining site structure and searchability offers the best of both worlds: cost savings without sacrificing accessibility.

For organizations already using Microsoft 365, this feature represents another step in Microsoft's ongoing effort to provide comprehensive data management tools within its ecosystem. The integration with Copilot also suggests Microsoft is thinking about how storage optimization can enhance its AI capabilities, creating a virtuous cycle of better performance and lower costs.

Organizations interested in learning more can visit the Overview of Microsoft 365 Archive page or listen to the full demonstration on the Sync Up podcast available on Apple Podcasts, Spotify, or via RSS. The feature is expected to roll out to commercial customers first, with broader availability following the public preview period.

The introduction of file-level archive demonstrates Microsoft's continued investment in making OneDrive and SharePoint more powerful and cost-effective for enterprise users. By addressing the specific pain point of managing cold data with precision, Microsoft is providing organizations with tools to optimize their cloud storage investments while maintaining productivity and accessibility.