As organizations build up more and more email data (attachments, threads, compliance needs, invoices, etc.) the primary mailbox storage in Outlook often becomes a bottleneck. Fortunately, Microsoft offers several licenses and feature paths to increase both mailbox and archive storage. In this post, we’ll walk you through what your current license gives you, what add-ons or upgrades are available, and what we recommend for each scenario.
Current Baseline: What You Get by Default
Here are the typical storage limits under the Microsoft 365 Business and Enterprise plans (see here for more detail):
| Plan | Standard Monthly Price | Primary Mailbox Size | Archive Mailbox Size |
| Microsoft 365 Business Basic | $7.20 per user | 50GB | 50GB |
| Microsoft 365 Business Standard | $15 per user | 50GB | 50GB |
| Microsoft 365 Business Premium | $26.40 per user | 50GB | 100GB, 1.5TB with auto-expanding archiving enabled) |
| Microsoft 365 E3 (No Teams) | $40.56 per user | 100GB | 100GB, 1.5TB with auto-expanding archiving enabled |
| Microsoft 365 E5 (No Teams) | $65.76 per user | 100GB | 100GB, 1.5TB with auto-expanding archiving enabled |
NOTE: This post will mainly focus on Microsoft 365 licenses. Office 365 licenses (like E1, E3, E5, and F3) have similar storage capacities to their Microsoft counterparts, but differ in security features. For more information on Office 365 storage limits, follow the link in the previous paragraph.
Easiest Way to Increase Storage: Online Archiving
Now that you understand your storage capacity for your specific license, it’s time to explore how to free up space on your primary mailbox. There are a ton of different avenues you can take, so let’s break them down based on simplicity and cost.
The cheapest and easiest option is to set up your in-place/online archive. Microsoft 365 admins can do this by enabling in-place/online archive for users then setting up retention policies (like auto-archiving emails based on age). Once this feature is enabled users will see an “In-Place Archive” or “Online archive” folder, which functions as a second mailbox separate from the regular archive folder used for manual archiving. The best part about this feature is it’s included with all the licenses above (see Archive Mailbox Size column for storage capacity).
If you are already utilizing in-place/online archiving and are still reaching storage capacity, you should look into the auto-expanding archiving feature. When this feature is enabled, archive storage is increased from 100GB to up to 1.5TB, with storage being automatically assigned as size increases (follow this link to learn how to enable). Auto-expanding archiving is included with Microsoft 365 Business Premium, E3, and E5. In order to get this feature with Microsoft 365 Business Basic or Standard, you will need to purchase an Exchange Online Archiving license. This license costs $4 per user per month, or $36 annually.
What About My Primary Mailbox?
If you like to keep your emails in your primary mailbox instead of utilizing Outlook’s online archive, there are a few ways you can increase it’s storage. The cheapest option for users with a Business Basic, Standard, or Premium license is to add on an Exchange Online Plan 2 license. This license costs $9.60 per user per month (or $96 annually), and increases primary mailbox storage to 100GB. It also includes the ability to enable auto-expanding archiving, so if you’re interested in increasing both primary and archive storage this is the license for you. Microsoft 365 E3 and E5 licenses already include Exchange Online Plan 2, so applying another license to an E3/E5 user will not increase storage to 200GB. This also means that you cannot stack Exchange Online Plan 2 licenses; adding 2 licenses to a user WILL NOT increase storage to 150GB.
Decision Guide: What To Do In Your Scenario?
If you’ve read up to this point but still aren’t sure which route to take to increase storage, have no fear. Here are the guidelines we use to advise clients on which path is right for them:
- Measure Current Usage and Trends
- Which users are hitting the 50GB limit? Is it primary mailbox or archive?
- Project how fast storage is growing.
- Try Low-Cost Archiving First
- Enable in-place/online archive if not already enabled.
- Use retention / cleanup policies (delete/auto archive old items and large attachments).
- Use move-to-archive automation or client-side tools where feasible.
- For Users Who Need Larger Inbox Sizes
- If primary mailbox size is regularly exceeded, then upgrading to Exchange Online Plan 2 or E3/E5 is justified.
- For occasional heavy users (legal, finance), consider individual upgrades rather than the whole organization.
- Balance License Features vs Cost
- If full enterprise features are desired (security, compliance, DLP, etc.), E3/E5 may offer a better value.
- If only storage is the issue, add-on archiving or Plan 2 may be more cost-efficient.
- Plan for Growth and Retention
- Even with 1.5TB archives, constantly growing archive usage can lead to other costs (backup, search, compliance).
- Set policies: how long to keep email, what must be archived vs kept inactive, etc.
Conclusion
Extending Outlook storage isn’t just about purchasing more space, it’s about choosing the right mix of licensing, archiving features, user experiences, and cost for your business. For many businesses, the first and most cost-effective step is enabling Outlook’s built-in archiving features, especially auto-archiving. For users who consistently exceed their mailbox storage and need additional primary mailbox capacity, upgrading to Exchange Online Plan 2 offers a practical middle-ground solution. However, in cases where storage demands are parallel with broader needs like advanced compliance and security, moving to Microsoft 365 E3 or E5 may offer better long-term value despite the higher cost. Ultimately, the best solutions depends on the size of your organization, how your users work with email, and what your growth and compliance requirements look like over time.