Managing Mailbox Retention and Archiving Policies in Microsoft 365

Microsoft 365 (formerly Office 365) provides a wide set of options for managing data classification, retention of different types of data, and archiving data. This article will show the options a Microsoft 365 administrator has when setting up retention policies for Exchange, SharePoint, and other Microsoft 365 workloads and how those policies affect users in Outlook. It’ll also cover the option of an Online Archive Mailbox and how to set one up.

There’s also an accompanying video to this article which shows you how to configure a retention policy, retention labels, enabling Archive mailboxes, and creating a move to archive retention tag.

How To Manage Retention Policies in Microsoft 365

There are many reasons to consider labeling data and using retention policies but before we discuss these let’s look at how Office 365 manages your data in the default state. For Exchange Online (where mailboxes and Public Folders are stored if you use them), each database has at least four copies, spread across two datacenters. One of these copies is a lagged copy which means the replication to it is delayed, to provide the option to recover from a data corruption issue. In short, a disk, server, rack, or even datacenter failure isn’t going to mean that you lose your mailbox data.

Further, the default policy (for a few years now) is that deleted items in Outlook stay in the Deleted Items folder “forever”, until you empty it, or they are moved to an archive mailbox. If an end-user deletes items out of their Deleted Items folder, they’re kept for another 30 days (as long as the mailbox was created in 2017 or later), meaning the user can recover it, by opening the Deleted Items folder and clicking the link.

Where to find recoverable items in Outlook

This opens the dialogue box where a user can recover one or more items.

Recovering deleted items in Exchange Online

If an administrator deletes an entire mailbox it’s kept in Exchange Online for 30 days and you can recover it by restoring the associated user account.

Additionally, it’s also important to realize that Microsoft does not back up your data in Microsoft 365. Through native data protection in Exchange and SharePoint online they make sure that they’ll never lose your current data but if you have deleted an item, document or mailbox for good, it’s gone. There’s no secret place where Microsoft’s support can get it back from (although it doesn’t hurt to try), hence the popularity of third-party backup solutions such as Altaro Office 365 Backup.

Litigation Hold – the “not so secret” secret

One option that I have seen some administrators employ is to use litigation or in-place hold (the latter feature is being retired in the second half of 2020) which keeps all deleted items in a hidden subfolder of the Recoverable Items folder until the hold lapses (which could be never if you make it permanent). Note that you need at least an E3 or Exchange Online Plan 2 for this feature to be available. This feature is designed to be used when a user is under some form of investigation and ensures that no evidence can be purged by that user and it’s not designed as a “make sure nothing is ever deleted” policy. However, I totally understand the job security it can bring when the CEO is going ballistic because something super important is “gone”.

Litigation hold settings for a mailbox

Retention Policies

If the default settings and options described above doesn’t satisfy the needs of your business or regulatory requirements you may have, the next step is to consider retention policies. A few years ago, there were different policy frameworks for the different workloads in Office 365, showing the on-premises heritage of Exchange and SharePoint. Thankfully we now have a unified service that spans most Office 365 workloads. Retention in this context refers to ensuring that the data can’t be deleted until the retention period expires.

There are two flavors here, label policies which publish labels to your user base, letting users pick a retention policy by assigning individual emails or documents a label (only one label per piece of content). Note that labels can do two things that retention policies can’t do, firstly they can apply from the date the content was labeled, and secondly, you can trigger a disposition / manual review of the SharePoint or OneDrive for Business document when the retention expires.

Labels only apply to objects that you label; it doesn’t retroactively scan through email or documents at rest. While labels can be part of a bigger data classification story, my recommendation is that anything that relies on users remembering to do something extra to manage data will only work with extensive training and for a small subset of very important data. You can (if you have E5 licensing for the users in question) use label policies to automatically apply labels to sensitive content, based on a search query you build (particular email subject lines or recipients or SharePoint document types in particular sites for instance) or to a set of trainable classifiers for offensive language, resumes, source-code, harassment, profanity, and threats. You can also apply a retention label to a SharePoint library, folder, or document set.

As an aside, Exchange Online also has personal labels that are similar to retention labels but created by users themselves instead of being created and published by administrators.

A more holistic flavor, in my opinion, is retention policies. These apply to all items stored in the various repositories and can apply across several different workloads. Retention policies can also both ensure that data is retained for a set period of time AND disposed of after the expiry of the data, which is often a regulatory requirement. A quick note here if you’re going to play around with policies is that they’re not instantaneously applied – it can take up to 24 hours or even 7 days, depending on the workload and type of policy – so prepare to be patient.

These policies can apply across Exchange, SharePoint (which means files stored in Microsoft 365 Groups, Teams, and Yammer), OneDrive for business, and IM conversations in Skype for Business Online / Teams and Groups. Policies can be broad and apply across several workloads, or narrow and only apply to a specific workload or location in that workload. An organization-wide policy can apply to the workloads above (except Teams, you need a separate policy for its content) and you can have up to 10 of these in a tenant. Non-org wide policies can be applied to specific mailboxes, sites, or groups or you can use a search query to narrow down the content that the policy applies to. The limits are 10,000 policies in a tenant, each of which can apply to up to 1000 mailboxes or 100 sites.

Especially with org-wide policies be aware that they apply to ALL selected content so if you set it to retain everything for four years and then delete it, data is going to automatically start disappearing after four years. Note that you can set the “timer” to start when the content is created or when it was last modified, the latter is probably more in line with what people would expect, otherwise, you could have a list that someone updates weekly disappear suddenly because it was created several years ago.

To create a retention policy login to the Microsoft 365 admin center, expand Admin centers, and click on Compliance. In this portal click on Policies and then Retention under Data.

Retention policies link in the Compliance portal

Select the Retention tab and click New retention policy.

Retention policies and creating a new one

Give your policy a name and a description, select which data stores it’s going to apply to and whether the policy is going to retain and then delete data or just delete it after the specified time.

Retention settings in a policy

Outside of the scope of this article but related are sensitivity labels, instead of classifying data based on how long it should be kept, these policies classify data based on the security needs of the content. You can then apply policies to control the flow of emails with this content, or automatically encrypt documents in SharePoint for instance. You can also combine sensitivity and retention labels in policies.

Conflicts

Since there can be multiple policies applied to the same piece of data and perhaps even retention labels in play there could be a situation where conflicting settings apply. Here’s how these conflicts are resolved.

Retention wins over deletion, making sure that nothing is deleted that you expected to be retained and the longest retention period wins. If one policy says two years and another says five years, it’ll be kept for five. The third rule is that explicit wins over implicit so if a policy has been applied to a specific area such as a SharePoint library it’ll take precedence over an organization-wide general policy. Finally, the shortest deletion policy wins so that if an administrator has made a choice to delete content after a set period of time, it’ll be deleted then even if another policy applies that requires deletion after a longer period of time. Here’s a graphic that shows the four rules and their interaction:

Policy conflict resolution rules (courtesy of Microsoft)

As you can see, building a set of retention policies that really work for your business and don’t unintentionally cause problems is a project for the whole business, working out exactly what’s needed across different workloads, rather than the job of a “click-happy” IT administrator.

Archive Mailbox

It all started with trying to rid the world of PST stored emails. Back in the day, when hard drive and SAN storage only provided small amounts of storage, many people learnt to “expand” the capacity of their small mailbox quota with local PST files. The problem is that these local files aren’t backed up and aren’t included in regulatory or eDiscovery searches. Office 365 largely solved part of this problem by providing generous quotas, the Business plans provide 50 GB per mailbox whereas the Enterprise plans have 100 GB limits.

If you need more mailbox storage one option is to enable online archiving which provides another 50 GB mailbox for the Business plans and an unlimited (see below) mailbox for the Enterprise plans. There are some limitations on this “extra” mailbox, it can only be accessed online, and it’s never synchronized to your offline (OST) file in Outlook. When you search for content you must select “all mailboxes” to see matches in your archive mailbox. ActiveSync and the Outlook client on Android and iOS can’t see the archive mailbox and users may need to manually decide what to store in which location (unless you’ve set up your policies correctly).

For these reasons many businesses avoid archive mailboxes altogether, just making sure that all mailbox data is stored in the primary mailbox (after all, 100 GB is quite a lot of emails). Other businesses, particularly those with a lot of legacy PST storage find these mailboxes fantastic and use either manual upload or even drive shipping to Microsoft 365 to convert all those PSTs to online archives where the content isn’t going to disappear because of a failed hard drive and where eDiscovery can find it.

For those that really need it and are on E3 or E5 licensing you can also enable auto-expanding archives which will ensure that as you use up space in an online archive mailbox, additional mailboxes will be created behind the scenes to provide effectively unlimited archival storage.

To enable archive mailboxes, go to Security & Compliance Center, click on Information governance, and the Archive tab.

The Archive tab

Click on a user’s name to be able to enable the archive mailbox.

Archive mailbox settings

Once you have enabled archive mailboxes, you’ll need a policy to make sure that items are moved into at the cadence you need. Go to the Exchange admin center and click on Compliance management – Retention tags.

Exchange Admin Center – Retention tags

Here you’ll find the Default 2 year move to archive tag or you can create a new policy by clicking on the + sign.

Exchange Retention tags default policies

Pick Move to Archive as the action, give the policy a name and select the number of days that has to pass before the move happens.

Creating a custom Move to archive policy

Note that online archive mailboxes have NOTHING to do with the Archive folder that you see in the folder tree in Outlook, this is just an ordinary folder that you can move items into from your inbox for later processing. This Archive folder is available on mobile clients and also when you’re offline and you can swipe in Outlook mobile to automatically store emails in it.

Conclusion

Now you know how and when to apply retention policies and retention tags in Microsoft 365, as well as when online archive mailboxes are appropriate and how to enable them and configure policies to archive items.