Storage creep is real. And expensive. With Copilot in the mix, the stakes are higher. Cloudwell’s Griffin Wesler sat down and talked to us about how to clean up your estate instead of scaling it.
Somewhere in your tenant, there is probably a two-terabyte pile of files belonging to someone who left the company three years ago. You are paying to keep it. And there is a good chance nobody knows it’s there.
Sounds far-fetched. It’s not. It comes from a real Cloudwell engagement. A marketing employee left, their OneDrive was never cleaned up, and once their license lapsed it didn’t go anywhere. It sat there, unlicensed and forgotten, still on the storage bill, held in place by a retention policy nobody had revisited.
That ghost folder may have sat in OneDrive rather than SharePoint, but the Microsoft 365 storage bill that landed on IT’s desk covered both. Behind that one big number were a handful of separate problems. OneDrive may have been what caught their eye. But the bigger, more fixable problem was sitting in SharePoint.
If you run SharePoint for a living, you’ll know the pattern. The “you’re approaching your storage limit” email from Microsoft. The click to buy a little more. The same email a few months later. A little more storage. The bill creeps up, finance starts asking questions, and the problem you keep kicking down the road never actually gets solved.
There’s a better move than reaching for the credit card. But first, it helps to understand how almost every organization ended up here.
How the SharePoint mess piles up
Most tenants have been carrying years of accumulated history. Add in the rush to remote work during Covid, when Teams was rolled out at speed in 2020 with rarely any training attached. Team sites were spun up, content was dropped wherever was quickest, and everyone moved on. You get the picture.
Then the emergency passed. But the content mess stayed. Multiply that across an organization and that’s how you get sprawl: hundreds of ungoverned workspaces, many of them dormant, most of them forgotten.
The numbers can get genuinely alarming and costly. Research presented at an industry event recently walked through the case of an 800-person consulting firm. They were sitting one terabyte over a 25-terabyte quota, with the average workspace weighing in at 6.2 gigabytes. The kicker: they were creating 150 new workspaces every single month.
Fast forward and the picture got ugly. Over the next three years, that organization was on track to spend in the region of $190,000 on overflow storage alone, climbing toward a recurring $6,000-plus a month by the end of it. All of it for data that, in the main, nobody needed to keep.
Think of it as a storage iceberg. The part you can see, the active projects and the files people actually open, is only a small fraction of the whole. Underneath sits everything else: old file versions, abandoned Teams channels, legacy sites nobody has touched in years. It accumulates because it can, right up until it starts costing real money.
The version history trap
We asked Griffin, who runs storage assessments at Cloudwell, where the storage tends to hide, and he said typically it’s “version history”.
Out of the box, SharePoint keeps up to 500 versions of every file. For a Word document, that’s fine. For a PowerPoint deck stuffed with images and the occasional embedded video, it’s a different story.
“Say you have a PowerPoint with 300 megabytes of images in it, and you have 500 versions of that,” Griffin explains. “A deck that started at 100 megabytes balloons to a gigabyte partway through a project. The project wraps, everyone moves on, and 500 copies of a one-gigabyte file sit there indefinitely.”
The worst offenders are predictable. “The PowerPoint files are the ones that you typically see growing the most out of control,” Griffin says. Which means marketing, the people building the big, image-heavy decks, are usually the unwitting source of the largest single chunk of storage in the tenant.
What counts as a “version” doesn’t help either. Office doesn’t save a new version on every keystroke; it uses its own logic to decide when enough has changed to warrant one. Griffin’s verdict on how that logic works is that it’s “a little bit opaque.” For an admin trying to predict storage growth, that opacity is exactly the problem.
The other hidden culprit: the Preservation Hold Library
Version history is the obvious offender. The Preservation Hold Library is the one most admins never think to check.
Apply a retention or legal-hold policy and SharePoint keeps a copy of anything that’s edited or deleted while the policy is active, including files people believe they have deleted.
For one organization Griffin is working with, that library, not version history, was the single biggest drain on their storage. It does its job invisibly, which is exactly why it grows unchecked.
Why SharePoint storage control matters more now Copilot is here
For years, SharePoint was where files went to be forgotten. Since Copilot launched, that has changed. At the recent Microsoft 365 Community Conference, Microsoft’s Jeff Teper said SharePoint is now the number one citation source for Microsoft 365 Copilot and agents.
“SharePoint is not where data goes to die anymore,” says Griffin. Copilot can reach across the entire estate and surface anything, no matter how old, how buried, or how wrong.
And that turns a cost problem into a quality problem. If your content estate is full of outdated policies, superseded contracts, and 15 duplicate versions of the same document, Copilot will find all of them and present them with total confidence.
As Susan Hanley, who has spent four decades in knowledge management and SharePoint, put it in a recent conversation with Cloudwell, this is “not a hallucination problem” but a governance one. The AI isn’t making things up. It’s faithfully surfacing the mess you fed it.
In other words, the storage you’ve been ignoring and letting get out of control isn’t just inflating your Microsoft bill anymore. It’s also actively degrading the AI tool you’re about to spend a fortune rolling out.
What you can do about SharePoint sprawl
The good instinct is to clean up rather than scale up. But where do you start?
1. Find out where the data sprawl is
Two organizations can show the exact same symptoms, the monthly warning emails, the creeping bill, the temptation to just buy more, and have completely different problems underneath.
For one Cloudwell client, the drain was ex-employee OneDrives and the Preservation Hold Library. For another, it was a single, deeply nested site stuffed with PowerPoints carrying 400 versions apiece.
Same warning email, opposite fixes. But the first move is always the same: measure before you touch anything.
You can pull a fair amount of information from the SharePoint admin center. But if you also have one Copilot license in the tenant, then SharePoint Advanced Management is available to you, which gives genuine visibility into what’s stale, what’s over-shared, and what needs attention first.
As Susan Hanley notes, this is “a significant licensing gift from Microsoft” for exactly this reason. Beyond that, getting a complete picture usually means scripting, which is something our team at Cloudwell can help with.
2. Set version history limits (but there’s several catches)
Microsoft now lets you cap versions by count and by age, so you can keep, say, 100 versions and automatically clear anything older than three years. The catch: those rules only apply to new projects. They are not retroactive. To clean up everything that already exists, you’re into PowerShell, not the admin center GUI. “You have to be comfortable on the command line,” Griffin says.
There’s a second catch. Versioning can be set library by library, no versioning, major versions only, or major and minor, and users can change those settings themselves, so a sensible tenant-wide default is rarely the last word on how much gets kept. This is usually the point where organizations need to bring in help from teams like ours.
There’s a third catch too. If a retention policy or sensitivity labels are applied, deleted versions don’t disappear they move to the Preservation Hold Library and sit there until their retention period expires. Depending on your settings, you may not be able to delete versions at all. And if you can, the storage doesn’t free up; you’ve just shifted the problem somewhere less visible.
3. Apply retention rules by content type
Not everything deserves the same lifespan. In Griffin’s work, a sensible pattern emerges: a working file might need keeping for two years, a public-facing presentation for five, an internal deck for two. Structure your sites around how content will actually be used, then apply rules to match.
Heavily regulated organizations will have tighter controls and longer obligations; an ordinary business can often get away with a blanket five-year policy. And remember that retention and version history are two separate problems.
A regulated client might be obliged to hold certain records for seven years, but that doesn’t mean keeping seven years of every draft. You can meet the compliance requirement and still clear the version bloat sitting behind it.
The practical tool for this is a content lifecycle, a standardized way of defining what a file is, where it sits in its useful life, and what happens to it at each stage. Without that, retention rules become guesswork.
4. Use site quotas and a flatter structure
Best practice is to have one site per project, each with its own quota. Set a ceiling, and if a site approaches it, that triggers a conversation. “If you never hit that, then we won’t need to have a discussion on storage,” as Griffin puts it. Deeply nested single-site structures, where 95% of content lives in folders within folders within folders, are where observability goes to die.
5. Fix your off-boarding
That two-terabyte ghost folder existed because nobody owned the question of what happens to a leaver’s data? Build that decision into your off-boarding process, with legal and HR, so retention is deliberate rather than accidental.
6. Keep, archive, or delete
Deletion isn’t the only option, and it isn’t always allowed. Griffin works with three options: keep it live, archive it, or delete it.
Archiving is the middle path for content you are obliged to retain but don’t need cluttering active sites. You move it somewhere cheaper and out of the way, where it stops dragging on storage and stops surfacing in everyday search.
From a compliance standpoint, the cleanest file is often no file at all. “The best thing you can do with a dormant file is delete it,” Griffin says. No storage cost, no liability, no risk of Copilot resurfacing it later. But people are natural hoarders. Implementing good governance means overriding that instinct on the organization’s behalf.
7. Train your people, not just your tenant
A cleanup only holds if the behavior that caused the mess changes with it. Once Griffin’s team has cleared the backlog, the work that makes it stick is teaching people better habits: where things should live, what is worth keeping, when to let go.
It is the same point Susan Hanley made in our conversation about governance. The technology can only do so much if nobody is accountable for what goes in. Tools clear the backlog. People stop it coming back.
8. Then keep watching
Storage management is not a one-and-done process. You’ll need to pull a storage report quarterly so the problem can’t quickly rebuild. Cleaning up is something you need to do today. Governance is something you need to do on an ongoing basis.
The takeaways
Buying more storage may feel like the path of least resistance right now. But it is also the most expensive way to avoid a decision you’ll eventually have to make anyway.
The organizations we see getting this right are the ones who decided to understand their estate, set rules that match how their teams actually work, and treat governance as ongoing maintenance rather than a one-time purge. That work pays for itself in storage costs. With Copilot now in the picture, it pays for itself in productivity gains.
So, if those monthly Microsoft emails are starting to feel like a subscription you never agreed to, it might be time to find out where your storage is really going.
Talk to Cloudwell about a storage assessment and how to get your estate ready for Copilot while you’re at it.