Not everyone in a business needs Word, Outlook, Teams and the full Microsoft 365 stack. Some people just need a safe, synced place to keep files. Warehouse staff, field crews, casuals, a shared service account, a kiosk machine — these are storage-only users, and licensing them on a full Microsoft 365 plan is often money quietly leaking out the door every month.
That is the gap OneDrive for Business standalone is built to fill. It gives a user 1TB of cloud storage and the OneDrive sync client, and almost nothing else. The question we get asked is simple: for a storage-only user, is the standalone licence cheaper than just putting them on Business Basic — and where does that maths stop working? This guide walks through it the way we'd actually advise a client.
What OneDrive standalone actually is
Microsoft sells a single standalone plan now: OneDrive for Business (Plan 1). It includes 1TB of OneDrive storage per user, the desktop and mobile sync clients, file sharing, and the web access. It does not include Office desktop apps, Exchange email, Teams, SharePoint team sites, or an Intune/Entra management bundle. It is deliberately thin.
Indicative pricing sits around AUD $7 per user per month on an annual commitment (the US list is USD $5). Microsoft 365 Business Basic — which adds web/mobile Office, a 50GB Exchange mailbox, Teams and SharePoint — is around AUD $9 per user per month. Both figures are indicative AUD list — confirm at purchase, and both move with Microsoft's announced 1 July 2026 commercial price increase, so treat any number here as a planning estimate, not a quote.
The 1TB vs 'unlimited' threshold (and why unlimited is gone)
A lot of the confusion here is historical. The old OneDrive for Business (Plan 2) used to advertise unlimited storage, and people still chase it. Microsoft retired that unlimited option in 2023. Plan 2 is no longer sold standalone, and 'unlimited' is not on the table for new buyers under any plan.
What exists today is a 1TB-per-user baseline. Storage above 1TB — up to 5TB per user — is only reachable on qualifying plans where your tenant has five or more eligible users, and even then it's an admin-requested increase, not an automatic entitlement. Going beyond 5TB is a manual case raised with Microsoft. So if you're imagining a single standalone user holding 4TB of video, that is not how the modern thresholds work.
- Standalone OneDrive (Plan 1): 1TB per user, full stop.
- Above 1TB (toward 5TB): needs a qualifying plan and 5+ eligible users in the tenant, requested by an admin.
- 'Unlimited': no longer offered to new customers — don't design around it.
When standalone is genuinely the cheaper, correct path
Standalone earns its place when the user truly only needs personal file storage and sync, and someone else is already carrying the collaboration load. The clean cases we see:
- A user who collaborates entirely through a shared SharePoint or Teams site that's licensed elsewhere, and just needs their own 1TB for working files.
- Frontline or deskless staff who don't have a mailbox and don't need one — they sync documents, photos or forms and nothing more.
- A service or scanning account that needs a storage target but no email identity.
- Topping up storage for a user whose base plan's storage you don't want to disturb.
In those cases you pay for storage and only storage, and the saving compounds across a fleet of frontline users. That's the legitimate cheap-seat optimisation.
When standalone is a false economy
The trap is buying standalone to save AUD $2, then discovering the user actually needed the things Business Basic includes — and bolting them on individually costs far more than the bundle you avoided.
The most common one is email. The moment a storage-only user needs a real mailbox, you're adding Exchange Online separately, and the combined standalone-plus-Exchange figure overtakes Business Basic while giving you a worse, more fragmented licence to manage. The same logic applies to Teams, to any need for the Office web apps, or to SharePoint-backed collaboration. If two or more of those needs appear, Business Basic is almost always cheaper and cleaner than assembling the parts.
The hidden costs to price in before you decide
The licence fee isn't the whole cost. Standalone users still need to be governed: conditional access, device compliance and data-loss controls don't come bundled, and if your security baseline assumes Business Premium features, a fleet of bare standalone accounts can become the soft spot in your environment. Factor in the admin overhead of running two licence types, and the risk of users quietly outgrowing 1TB and stalling sync without anyone noticing.
None of that makes standalone wrong — it makes it a deliberate choice rather than a reflex saving. For a genuinely storage-only cohort it's the right tool. For anyone whose needs are creeping, the AUD $2 'saving' is the most expensive two dollars on the invoice.
A simple decision rule
- 1Does the user need a mailbox, Teams, or Office apps now or within the renewal period? If yes → Business Basic.
- 2Do they only need a personal 1TB store and sync, with collaboration licensed elsewhere? If yes → OneDrive standalone.
- 3Do they need more than 1TB? Confirm you have 5+ eligible users and a qualifying plan first — standalone won't get you there.
- 4Unsure? Default to Business Basic. The premium is small and it removes the upgrade-later tax.
Get the split right once, document the rule, and apply it at every renewal. The cheapest path isn't a single product — it's matching each seat to what that person actually does, and not paying for collaboration features a forklift driver will never open.