Determine your collaboration requirements for file storage
Collaboration and file storage is made easier in Microsoft 365 by using two key services: One Drive for Business and SharePoint Online. Using these services in collaboration can provide your company great opportunities to create a resilient and reliable file storage strategy.
Microsoft 365 includes a basic team site for you to get started. You can immediately start storing files in OneDrive for Business and collaborating on files in your team site.
Best practices for file storage and sharing
Small businesses often have file storage and collaboration requirements that can be addressed through best practices that are unique to their industry type. These industry types include:
- Small Businesses. Create a Microsoft 365 team site to store shared documents so information is centrally located and archived. This way information isn't lost during personnel transitions, such as when transitioning to a new director. Create a private Microsoft 365 team subsite to store files that you want to keep private from the rest of the team, such as your personnel and financial documents.
- Sole proprietorships. Use OneDrive for Business to store your own files and share them with customers on a case-by-case basis.
- Co-ownerships. If you co-own the business, you can still use your OneDrive for Business account. However, you'll need to directly share your files with the other owner, and vice versa.
- Businesses with external clients or partners who need access to files. Use Microsoft 365 team subsites to store and share documents intended for a specific customer. Because access to a subsite is specific to certain customers and limited to the subsite, you don't need to worry that one customer will accidentally get access to information intended for another customer.
Keep private files private
The manner in which files are kept private depends on whether the files are stored or shared.
- When you store a file in OneDrive for Business, it's only accessible by you, unless you share it with others.
- When you share files, you can choose individual people to share with, or share with everyone.
You can also create separate folders in OneDrive for different purposes, such as public, personal, or for individual projects. Each folder can be shared with a different person or group, or nobody at all.
Additional reading. For more information on sharing, see Share files and folders in OneDrive for Business.
Track how much space you have left
You can manage your OneDrive for Business to see how much space you’re using and free up space if you’re getting close to your storage limit.
Additional reading. For more information on managing your storage space, see Manage your OneDrive for Business storage.
What files can be stored in OneDrive and Team Site?
While you can upload almost any format file, some files may not be allowed for two reasons: security and invalid characters in the file names. OneDrive for Business security policies block certain file types and a small set of characters.
Additional reading. For more information on what file formats and invalid characters aren't allowed, see Invalid file characters and file types in OneDrive for Business.
Storage locations
The following table identifies the storage locations you should consider when planning your file storage strategy.
Storage Location
What it's for
What to store there
OneDrive for Business
All files that you store in OneDrive for Business are private unless you decide to share them. You can share files and folders with coworkers so that you can collaborate on projects. If you’re signed-in to Microsoft 365, you can possibly share with partners outside your organization, depending on what your company allows.
Business files that other team members don't need to collaborate on or access regularly.
Microsoft 365 Team site
A Microsoft 365 team site is like a website, but by default it's not public; it's accessible only to people you give permissions to. It's ideal for sharing and collaborating on files.
Shared documents that all your employees can access and collaborate on. For example, if you collaborate on a PowerPoint presentation, you can store team plans that everyone updates, or publish meeting agendas.
Microsoft 365 Team subsite
A Microsoft 365 team subsite is like a separate section on your team site with a unique look or unique permissions for access. It's ideal for sharing and collaborating on files with a customer or partner external to your business. It's also good for storing files you want to keep private from the rest of the people in your business who have access to the team site. You can set up a subsite so only you (and if needed, one or two others) can access it.
Files you want to share with people external to your business. Files you want to keep private from others in your business. For example, you might want to store personnel and financial information here.
Microsoft 365 Site Collections
A Microsoft 365 site collection is separate from your existing team site. A site collection has its own address and permissions, and it can be used for internal or external collaboration. Larger businesses use site collections in the same way small businesses use subsites. A small business with advanced security needs and strong technical skills might also want to create a site collection.
Store the same shared files in a site collection as you would in a team site and subsite.
It's important to understand that accessing a file server from a company notebook isn't that different from accessing SharePoint and OneDrive resources with a Microsoft Entra user. These legacy file servers and home drives can also be migrated to SharePoint Online and OneDrive for Business. This relationship is displayed in the following diagram.
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