From Illusion to Control: Managing SharePoint Storage Like a Pro

For your users, SharePoint might feel like a magical, unlimited drive. Unlike the old on-prem shared drives, the cloud doesn’t pop up “disk is full” warnings so users assume space is endless.

As an admin, you know that’s not the case. SharePoint storage is finite, pooled across your Microsoft 365 tenant, and not cheap once you exceed your quota. Without limits, a single site can balloon, eating into storage meant for everyone else.

That’s why setting storage limits matters.

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Why Set Limits?

1. Control Growth

Without limits, some sites grow unchecked especially when users upload large media files, Teams meeting recordings, or legacy archives “just to keep them somewhere.” Setting limits ensures that growth is intentional and that storage is distributed fairly across teams.

2. Manage Costs

Tenant storage comes with a fixed quota plus 10MB per licensed Microsoft 365 user (e.g., E3, F3, Business Premium). Once that’s consumed, Microsoft charges for additional space. Without site-level caps, it’s easy to burn through your pool and face unexpected bills. Limits make it easier to predict and control costs.

3. Encourage Data Hygiene

Sites with no limits often become dumping grounds. By introducing storage boundaries, you create natural checkpoints for site owners to review content, archive outdated files, and keep their libraries organized.

4. Support Compliance

Compliance, retention, and eDiscovery become harder when data sprawls unchecked. Limits keep growth aligned with governance policies and reduce the risk of unmanaged data piling up where no one is looking.

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How Limits Work

By default, when you set a manual storage limit, SharePoint assigns each site a maximum capacity of 25 TB.

That sounds generous but here’s the catch: your tenant may only have 1 TB total storage available (plus any purchased add-ons). In practice, this means that while every site “looks” like it has 25 TB, the total tenant quota can run out long before anyone gets close.

Site Storage Metrics & Tenant Storage

So what are your options?

• Automatic Storage Allocation: SharePoint automatically assigns space to sites as needed. This removes the manual cap, but it also means a single site can still consume too much and cause the whole tenant to run out.

• Manual Storage Quotas: You set fixed caps (e.g., 5 GB, 50 GB, or 500 GB per site). This enforces boundaries and ensures growth is distributed more evenly.

Manual and Automatic Storage Limits with Default Limit

Best Practice: For new sites, configure a reasonable default storage limit. For existing sites, use PowerShell to update quotas in bulk.

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Step-by-Step: Setting Site Limits

1. Decide Your Default Quota

   
   

Determine what makes sense for your organization (e.g., 5 GB for project sites, 50 GB for departments).

2. Update Admin Center Settings

   
   

In the SharePoint Admin Center:

• Go to Settings > Site storage limits

• Choose Manual and set a default quota

• Save changes this will apply to all newly created sites

Site Storage Limits for New Sites

3. Bulk Update Existing Sites

   
   

Existing sites will not automatically inherit the new default. That’s where PowerShell comes in.

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Updating Site Limits with PowerShell

The SharePoint Online Management Shell makes it possible to apply new limits to existing sites at scale.

Here’s an example that sets a new quota but excludes sites already set to manual:

# Connect to SharePoint Online
Connect-SPOService -Url https://yourtenant-admin.sharepoint.com

# Define sites that were already set up to a specific limit
$excludedSites = @("site.url", "site.url")

# Get all sites
$allSites = Get-SPOSite -Limit All

# Loop through and update storage quota to 5GB
foreach ($site in $allSites) {
    if ($excludedSites -notcontains $site.Url) {
        Set-SPOSite -Identity $site.Url -StorageQuota 5120 -StorageQuotaWarningLevel 4608
    }
}

Notes:

• StorageQuota is set in MB (5120 = 5 GB).

• Storage Quota is set to 90% of 5GB = 4609 MB.

• Modify the logic to assign different quotas based on site type.

• Use Get-SPOSite to review current settings before applying changes.

• Consider logging updated sites for auditing purposes.

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Looking Ahead: Versioning

Another way to avoid filling up tenant storage too quickly is to configure automatic file versioning. By limiting the number of versions stored per file, you reduce silent bloat across document libraries.

We’ll dive into that in the next article.

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Build Smarter with SharePoint

Users don’t see the boundaries of cloud storage but admins have to enforce them. By combining site limits with automation, you create a scalable, cost-controlled, and compliant SharePoint environment.

At Echo Transformation, we help admins put these guardrails in place and simplify ongoing governance with automation.

Want to set up bulk governance scripts tailored to your environment? Let’s explore how, book a discovery session with us.