ZDNET’s key takeaways
- Microsoft 365 Family and Premium subscriptions are about to change.
- The new plans will offer shared pools of AI usage credits and OneDrive storage.
- Some subscribers could be forced to move data or pay double or triple their current rates.
If you’ve been to the grocery store lately, you’re probably familiar with the phenomenon of shrinkflation — where the price of a bag of chips or a candy bar stays the same, but the product itself gets smaller.
Microsoft 365 subscribers are about to experience the cloud version of shrinkflation. Microsoft announced today that it will be making changes to its Microsoft 365 Personal, Family, Premium, and Pro subscriptions. The company is positioning the changes as giving subscribers “more flexibility with their AI and cloud storage benefits.” That may be true, but the net effect on subscribers who take full advantage of those subscriptions could be a huge price increase.
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The changes, slated to roll out “in the coming months,” will affect shared AI usage and cloud storage benefits.
New storage and AI limits
The shrinkflation hits hardest at the shared OneDrive storage available through all these plans. Currently, if you have a Microsoft 365 Family, Premium, or Pro plan, each member has a fixed OneDrive storage allowance of 1 TB. If you’re the owner of one of those plans and you’ve used all five of your available shared slots, your family has a total of 6 TB of storage available.
After the changes take effect, these plans will get a shared storage pool for the entire subscription. Each family member’s accounts and files will remain private, but their usage will be subtracted from the shared pool. And the shrinkage is significant: Instead of 6 TB of storage divided evenly among six shared account holders, Microsoft 365 Family and Premium plans will get a total of 2 TB of shared storage.
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Microsoft 365 Pro — a new plan that was very quietly launched in September — gets 5 TB of shared storage and the highest available AI usage limits, but that plan also comes with a hefty $100-a-month price tag.
For Microsoft 365 Family and Premium subscribers who are using more than 2 TB of total storage across all accounts and aren’t willing or able to cut their usage, the shrinkflation will turn into actual dollars-and-cents inflation. The base cost of a Microsoft 365 Family plan is $130 a year, or just a little over $10 per month. Each 1 TB of additional OneDrive storage adds $10 a month to the subscription price. So even if your family has used roughly half of your current total allowance, your bill could double or triple.
The change to AI benefits should be a little less painful. Currently, Copilot usage credits are available only to the subscription owner and can’t be shared with family members. After the changes take effect, family members will be able to share AI usage credits, and the subscription owner will be able to manage AI access for younger family members.
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In addition, those plans will switch to a single AI usage allowance that can be shared by all family members. Premium and Pro subscribers will have the option to purchase additional AI usage credits.
According to a Microsoft spokesperson, new and upgraded subscriptions include shared storage starting Oct. 8, 2026. Customers with an existing subscription move to shared storage at their first renewal on or after May 2, 2027, and will be notified in advance.
Why is Microsoft doing this?
The most likely reason is to crack down on enthusiasts who are taking advantage of the 6 TB of storage included with a Family subscription to put together their own personal data hoard — just use a second free Microsoft account, give that account one of your shared subscription slots, and fill that OneDrive storage up. You can even use the sharing feature to make the storage from that secondary account available in your main account.
This isn’t the first time Microsoft has dramatically cut cloud storage allotments for OneDrive subscribers. In 2014, the company offered “unlimited” OneDrive storage to Office 365 subscribers. A year later, the company reneged on that promise. As I noted at the time:
Microsoft [blamed] a few greedy storage users for the change in heart. “A small number of users,” they wrote, “backed up numerous PCs and stored entire movie collections and DVR recordings. In some instances, this exceeded 75 TB per user or 14,000 times the average.”
Moving to shared storage and AI usage brings Microsoft’s plans into alignment with its main competitors. Google One, for example, includes 2 TB of shared storage for 6 people, plus AI credits, for $100 a year; a 5 TB plan costs $200 a year and includes additional AI credits. Apple sells shared storage via iCloud+ plans and with Apple One plans, which bundle Apple TV, Apple Music, and other subscription offerings.
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For the majority of Microsoft 365 subscribers, this change will be unnoticeable. It’s likely that most Family plan subscriptions use less than the 2 TB allotment. But I suspect a significant percentage of subscribers use more than those new limits. That group includes many of Microsoft’s most loyal customers, the kind who’ve been encouraged for years to take advantage of the generous 1 TB per user allotments included with these plans. I expect to hear some very loud hollering from those customers.
