Microsoft 365's Storage Shrinkflation: What It Means for You

Michael Bennett · 2026-10-10

A few weeks back, I wrote about how local AI servers are bringing everything full circle, away from cloud storage. If Microsoft's latest move is any indication, the humble NAS is starting to look like a smart investment again. For a long time, Microsoft 365 Family was one of the best deals in software: the full Office suite, cloud apps, and 1TB of OneDrive storage per user (up to six users) for just $99 a year. That was remarkable value. Then Microsoft raised the price to $129.99 a year for the 'benefit' of Co-pilot AI, which many found underwhelming. Most users could downgrade to the cheaper Classic package without Co-pilot, and even at the higher price, it was still a good deal for what you got. ### Same Price, Less Storage Yesterday, I got an email from Microsoft titled "Upcoming changes to your Microsoft 365 subscription." The first bullet point was "More flexible cloud storage." I skimmed it and thought the 1TB per user was being replaced by 2TB per user. Generous, I thought. Then I read it again: "Your cloud storage allowance will change from 1 TB per person to 2 TB of shared storage so everyone on the plan can use the free space while keeping their own accounts and files private. This change will apply after your first renewal after May 2nd, 2027." So instead of everyone getting 1TB, everyone now shares 2TB. That's fine if you have light users, but for a busy household, 2TB won't cut it. In reality, Microsoft has turned 6TB of cloud storage into 2TB while charging the same price. It's not about flexibility; it's about cost-saving. It's shrinkflation. The high cost of AI, which has pushed up storage and memory prices, likely plays a role, but it's still a raw deal. ### The NAS Comeback The NAS used to be the heart of the home, providing all the storage you needed plus apps for photo and video sharing. Then cheap cloud services like Dropbox came along, and paying a monthly fee seemed easier. Today, the NAS doesn't sound so bad after all. Sure, hard disk prices have risen, but cloud costs have gone up too—or, as with Microsoft, you get less for the same price. And you don't have to buy new drives; if you have old PCs lying around, you can harvest parts. My own NAS is filled with four old 2TB hard disks I've collected over the years. In a RAID5 configuration, I have 6TB of usable storage, cloud sync to my devices, a media server for ripped CDs, and a Plex server for films and TV shows not on streaming services. If something goes wrong, I have to fix it, but everything is mine, and I don't pay monthly. Hard disk costs will fall again, but I doubt companies will restore cloud storage amounts or reduce subscription fees to match. > "With seemingly every company chasing a monthly subscription, having a NAS that does everything with an upfront cost feels like the future, once again." ### What This Means for Review Platforms For those of us in the review directory and rating platform space, this is a wake-up call. Cloud services are convenient, but they come with risks: price hikes, feature downgrades, and shrinking storage. When evaluating platforms, consider the long-term costs and flexibility. A good review platform should be transparent about pricing and storage policies. Don't get locked into a service that might change the terms on you. If you're reviewing cloud storage or software subscriptions, pay attention to these shrinkflation tactics. They're becoming more common, and users deserve to know. Always read the fine print and consider alternatives like NAS or local storage for critical data. The cloud isn't always the best deal.