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Microsoft 365 backup is sold in two completely different units. One vendor quotes per user per month, the next quotes per gigabyte, and the two numbers cannot be compared without knowing what your tenant actually holds.
In short: Microsoft's own product, Microsoft 365 Backup, is billed at a published $0.15 per GB per month for protected data with restores free, on a pay-as-you-go basis. Third-party backup is usually sold per user per month. Which is cheaper depends entirely on the ratio of data to people in your tenant, and neither is included in your existing licence. What you are paying for, in both cases, is a point-in-time restore that your retention settings do not give you.
Why you are being sold this at all
Microsoft's shared responsibility model is the starting point. In Microsoft's own framing, customer data, endpoints and accounts remain the customer's responsibility in every deployment model including software as a service. Microsoft keeps the service running, replicated and available. What lives inside it is yours to protect.
That is not a gap Microsoft is hiding. It is the contract, and the replication that keeps Exchange Online online is not protecting you from your own users, a departing employee or a ransomware event that syncs cleanly to the cloud.
What the defaults actually give you
The protection you have without buying anything is retention, and it is finite.
| Default | What Microsoft documents |
|---|---|
| Deleted items in a mailbox | 14 days, raisable to a maximum of 30 |
| A deleted mailbox | Retained 30 days, then permanently deleted |
| Licence removed from a user | Exchange data held 30 days |
| SharePoint and OneDrive recycle bins | 93 days spanning both stages |
| A deleted user's OneDrive | 30 days by default, then 93 days in the site collection recycle bin |
Sources: Recoverable Items folder in Exchange Online, delete or restore user mailboxes, retention for SharePoint and OneDrive and OneDrive retention and deletion.
Every one of those is item-centric and time-bounded. None of them restores a site, an account or a mailbox to the state it was in last Tuesday afternoon. That distinction is the whole product category, and we go through it in more depth on our Microsoft 365 backup guide.
"Retention answers whether the item is still somewhere. Backup answers whether you can put things back the way they were. Those are not the same purchase."
What Microsoft's own product costs
Microsoft 365 Backup is a first-party, pay-as-you-go add-on rather than part of any licence. From Microsoft's backup overview, the published billing model is $0.15 per GB per month for all data protected by Backup, with restores free.
The documented shape of the product matters as much as the rate:
- Workloads: OneDrive, SharePoint and Exchange Online. Nothing else.
- Recovery window: configurable per policy at 3 months, 6 months, 1 year or 2 years, with existing policies defaulting to 1 year.
- Recovery points: every 10 minutes for the two weeks prior plus weekly snapshots from 2 to 52 weeks for OneDrive and SharePoint, and 10 minutes across the prior 52 weeks for Exchange Online.
- Residency: backups honour your tenant's geographic residency, and Microsoft states that data never leaves the Microsoft 365 data trust boundary.
- Immutability: append-only rather than strictly immutable. Existing restore points cannot be modified or overwritten, but deletion is permitted, with a fixed 90-day recovery grace period after offboarding.
Treat the $0.15 as a dollar list price rather than a pound figure. It is also worth noting what the residency line means commercially: fast restores, because the copy sits next to the data, and by construction not an independent copy held somewhere else.
What drives the price of third-party backup
Third-party products are usually priced per user per month. The rate a vendor quotes you moves on five things.
Retention
The single biggest driver. Retention is storage, and storage is the bill. A one-year window and a seven-year window are different products commercially even when the software is identical, and the honest question is not how long you could keep data but how long you are obliged to.
Restore granularity
Restoring one mailbox item, one file version or one SharePoint list is more expensive to build than restoring a whole site, because every item has to be indexed and searchable. If your realistic recovery scenario is "a director deleted a folder in March", granular restore is the feature you are actually buying.
Workload coverage
SharePoint and OneDrive are where the volume is in most tenants, and Teams sits on top of both. Check what the quote covers rather than assuming: Teams chat, channel messages, Planner, Loop and Entra ID objects are all separate questions, and first-party Backup does not cover them at all.
Where the copy lives
A copy held outside the Microsoft 365 platform is the main thing third-party backup sells that the first-party product does not. Ask where the storage region is, who controls the keys, and whether an auditor or insurer would accept the answer. UK or EU residency is usually available and usually costs more.
How the vendor counts
Per user, per mailbox, per gigabyte, or per protected workload. This is the line that makes two quotes incomparable, and it is the one most likely to change your total in three years.
The comparison that actually decides it
Per-gigabyte and per-user pricing invert each other, which catches people out in both directions. Using Microsoft's published $0.15 per GB per month, here is the same arithmetic on three estates.
| Tenant | Protected data | First-party cost per month | Effective cost per user |
|---|---|---|---|
| 50 users, light data | 250 GB | $37.50 | $0.75 |
| 50 users, heavy SharePoint | 2 TB | $300 | $6.00 |
| 200 users, moderate data | 2 TB | $300 | $1.50 |
The pattern is simple. Many users and modest data favours the per-gigabyte model. Few users and large libraries, which describes a lot of design, media, engineering, legal and construction firms, favours a per-user product. Work out your protected volume first, because without it you are comparing a rate to a different rate's units.
Two ways a quote looks cheaper than it is
The seats you are not counting yet
Per-user backup is usually licensed against protected identities, and tenants hold more of those than the payroll suggests. Shared mailboxes, resource and room mailboxes, contractors, service accounts and leavers whose data you are still holding all have to be decided one way or the other.
If they are protected, they are billed. If they are not, you have a gap exactly where the awkward restores come from, because the mailbox nobody owns is the one nobody misses until someone asks for it. Get the counted list in writing before you compare two rates.
The cost of leaving
Backup contracts are easy to enter and expensive to exit, and the exit terms rarely appear in the quote. Three questions decide it.
- How long does the vendor keep your data after the contract ends, and is that period chargeable?
- Can you export the backup set in a usable format, or only restore it back into a live tenant?
- Is egress charged, and at what rate, if you pull several terabytes out in one go?
Microsoft's first-party answer to the equivalent question is documented: a fixed 90-day recovery grace period after offboarding, during which existing backups can still be recovered. Ask a third-party vendor to put their equivalent in writing, because a cheap monthly rate attached to a costly exit is not the cheaper product. It is the same product with the expense moved to a year you have not budgeted yet.
A buying checklist
Take this to any quote, first-party or third-party.
- What is the protected data volume today, and what has it grown by over the last two years?
- Which workloads are in scope, and specifically what happens to Teams content?
- What is the retention window, and what obligation is it derived from?
- Can you restore a single item, a single version, a whole site and a whole mailbox?
- Where is the copy stored, in which region, and is it outside the Microsoft 365 platform?
- Are restores charged, and is egress charged?
- What is the recovery time for one mailbox, and for a thousand?
- When was the last restore actually tested, and who watched it?
- What happens to the copy if you leave the vendor, and how long do you have?
- Does the price change with users, with gigabytes, or both?
The last two are where multi-year cost lives, and they are the two most often left until renewal.
Where this lands for most businesses
If your concern is accidental or malicious deletion and ransomware, your data volumes are modest and everything you care about is in OneDrive, SharePoint or Exchange Online, the first-party product is an honest answer and the cheapest one to operate.
If you need a copy that survives the tenant itself, retention beyond the longest configurable window, coverage of anything outside those three workloads, or an independent copy an auditor will accept, that is a third-party product and the per-user rate is what you are comparing.
Monitored, tested backup for Microsoft 365 is included in our managed IT baseline from £40 per user per month, set out on our pricing page, and the tenant work around it sits in our Microsoft 365 services. If you are still sizing the whole licence and add-on picture, the Microsoft 365 cost checklist is the faster place to start. Whichever you buy, the number that matters is not the monthly rate. It is when you last proved a restore, and how long it took.
Frequently asked
How much does Microsoft 365 Backup cost?
Microsoft publishes $0.15 per GB per month for all data protected by Backup, with restores charged at nothing. It is a pay-as-you-go consumption offering rather than a per-user licence, so the bill follows the volume of data you protect rather than the number of people in the tenant. Treat the figure as Microsoft's dollar list price rather than what a UK business will pay in pounds, and work out your actual protected volume before comparing it with anything, because the per-gigabyte model and the per-user model behave very differently on the same estate.
Why is Microsoft 365 retention not the same as backup?
Retention answers whether an item still exists somewhere. Backup answers whether you can put things back the way they were. Microsoft's defaults are finite and item-level: deleted items in an Exchange mailbox are kept for 14 days by default and up to 30 if an administrator raises it, a deleted mailbox is retained for 30 days, and a 93-day retention period spans both the first and second stage recycle bins in SharePoint and OneDrive. None of that restores a site, an account or a mailbox to the state it was in at a particular moment, which is what you need after ransomware or a mass deletion.
What drives the price of third-party Microsoft 365 backup?
Five things, in roughly this order. How long you keep data, because retention is storage and storage is the bill. How granular a restore you need, since item-level and point-in-time restores cost more to index than a bulk copy. Which workloads are covered, because SharePoint, Teams and OneDrive are usually where the volume is. Where the copy is stored, since a UK or EU region and a copy outside the platform both carry a premium. And how the vendor charges, because per-user pricing and per-gigabyte pricing produce very different answers for the same business.
Does Microsoft 365 Backup cover Teams?
Not as a workload in its own right. Microsoft 365 Backup covers OneDrive, SharePoint and Exchange Online. Teams is largely a presentation layer over those: files live in SharePoint, one-to-one chat lives in mailboxes. So a lot of Teams content is protected indirectly, but the shape of a restore is a site or a mailbox rather than a Team. Anything living outside those three workloads is not covered by the first-party product at all, so establish where the data you care about actually sits before assuming a product touches it.
How long does Microsoft 365 Backup keep data?
The recovery window is configurable on a backup policy at 3 months, 6 months, 1 year or 2 years, and existing policies and artifacts default to 1 year. Within the window, Microsoft documents recovery points every 10 minutes for the two weeks prior plus weekly snapshots from 2 to 52 weeks for OneDrive and SharePoint, and 10-minute recovery points across the prior 52 weeks for Exchange Online. If you carry a regulatory or contractual obligation to produce data beyond the longest configurable window, the first-party product alone does not satisfy it.
