(a) Microsoft will charge HKU for M365 storage consumption
Microsoft has revised its global storage policy for Microsoft 365 Education, which will affect educational institutions including HKU beginning in July 2026. Under this new policy, storage usage across Exchange Online (EXO), OneDrive (OD), SharePoint Online (SPO), and Teams sites will no longer be provided at no cost. HKU will be charged according to each Microsoft 365(M365) tenant’s actual storage usage, after accounting for entitled capacity based on the paid subscription and the 100TB free storage. This storage policy will be put into effect upon renewal of the contract with Microsoft:
(1) April–May: Microsoft bills HKU annually based on storage used after deducting tenant base entitled capacity. The storage subscription rate is US$300 per 10TB/month (HK$2808 per TB/year). The annual subscription period starts from July 1 to June 30 of next year.
(2) starting July: Storage usage is tracked continuously. If a M365 tenant exceeds its entitled storage capacity without topping up additional storage capacity, access to OneDrive and SharePoint/Teams sites become read-only for all users in that tenant, while mailbox operation is not affected.
(b) Impact on HKU staff and departments
While ITS will acquire the necessary storage capacity during the contract renewal period in the annual contract renewal around April. It is expected that there will be additional M365 storage charges due to the continuous growth of storage. Meanwhile, ITS will explore alternative and affordable storage options supporting users’ needs.
On a fair share principle, the excess M365 storage costs will be absorbed by individual departments with storage consumption exceeding the entitled storage quota. Departments exceeding their allocated storage will be required to pay for additional capacity as necessary. Ongoing departmental storage fees will be determined based on a purchasing model that reflects each department’s storage capacity needs.
(c) Charging arrangement to HKU departments to improve transparency in storage usage
To improve the transparency and allow continuous tracking of the storage usage of individual departments. ITS is going to compile the monthly storage usage reports to departments for review. Departments are required to nominate representatives to receive the storage report and approve M365 service quota requests. The following is the tentative implementation arrangement, timeline and activities:
Charging Entity: Each HKU department, identified by its unique department code, will be measured with monthly charges for their M365 storage usage. Each department will therefore be accountable for its overall consumption of M365 storage of all accounts involved, including Exchange Online, OneDrive, and SharePoint Online, at the departmental level, rather than at the individual account level.
Monthly Charge Formula: The general monthly charging formula for department is:
[Total M365 storage size consumed by the department at that month – (Number of full-time staff of the department at that month x Entitled free M365 storage size per full-time staff) – (No. of additional A3 license purchased by the department at that month x Entitled free M365 storage size per additional A3 license purchased) ] x MS Storage Charge rate
At the moment, MS Storage Charge rate is HK$2808/TB/year, or HK$234/TB/month, while the Entitled free M365 storage per full-time staff is 50GB, and this value will be continuously reviewed and maybe adjusted in the future.
Measurement schedule: Monthly charges for each department are measured from July to June, beginning in July 2026. These monthly charges are recorded and informed to department corresponding staff until the next annual payment stage.
Annual payment schedule: Based on the monthly charges recorded over the past 12 months, each department will be informed of their total annual payment amount, which shall be settled by the department every July, beginning in July 2027.
Deployment schedule:
The following is the tentative timeline for HKU departments to review, adjust, and settle their M365 storage charges:
Stages | Activities |
#1: Initial adaptation stage (Jan 2026- Mar 2026) | · Each department is required to designate at least one full-time staff member as their departmental (1) M365 coordinator (responsible for monitoring the department’s M365 storage usage) and (2) budget approver (the default budget approver responsible for approving the annual departmental M365 storage charge) through the application form CF-125H. · Upon receipt of the designated roles’ information, each department will be provided with at least one initial report detailing its current M365 storage usage by May 2026. |
#2: Regular Report Review stage Annually from July to Dec, beginning in 2026 | • M365 coordinator & budget approvers of each department will receive monthly summary reports showing their M365 storage usage detail, the number of full-time employees, and the estimated monthly storage costs. • Colleagues who are using a large amount of storage are being identified and plans for data migration will be provided for consideration. |
#3: Comprehensive Review & migration stages Annually from Jan to Jun, beginning in 2027 | • A comprehensive monthly report, including a detailed breakdown with estimated annual departmental storage cost based on the monthly charge over the past 12 months will be provided. • Large data files can be reviewed for cleanup or migration to other alternative storages. |
#4: Annual Payment stage Every July, beginning in 2027 (loop back to #2) | • The annual storage department charge will be calculated and finalized. • Once the budget code has been provided and approved by the departmental budget approver, the annual departmental storage charge will be processed for settlement. |
(d) Alternative storage that can be considered
Colleagues in the HKU department are encouraged to consider these alternative non-Microsoft storage options to help reduce overall OneDrive or SharePoint Online storage costs:
Can subscribe to A1 NAS SMB storage (CF158) if no need for external sharing with Web GUI | $500 |
Other cloud drive with Web GUI and sharing feature solution managed by ITS [TBC by Q3 2026] | $600 – $700 (TBC) |
For any questions or comments related to the above arrangement, please contact our IT Helpdesk at ithelp@hku.hk . ITS will review the M365 storage allocation scheme from time to time and exercise charge back of storage consumption to individual departments as necessary.