What Microsoft 365 Backup doesn't cover

The native product is good. Restores are fast because the data never leaves Microsoft's cloud, the pricing is transparent, and there's no licensing puzzle. These are the specific places it stops.

Retention caps at one year

Backups are retained for up to 365 days. If you're in a regulated industry with a multi-year retention obligation, this is a hard limit, not a setting.

Teams chat isn't covered

Channel files live in SharePoint and are covered. Chat messages themselves are not. If conversations matter to you for compliance or investigation, native backup doesn't solve it.

There's no export

Backups stay inside Microsoft's boundary. You cannot take a copy elsewhere, keep an offline archive, or hand your backup set to a different provider if you switch. For some organisations that boundary is the best feature; for others it's the reason they buy a third party.

The same-vendor question

Your backup lives with the provider it's backing up. This is fine for accidental deletion and ransomware, which are the common cases. It's a genuine consideration if your threat model includes account compromise at the tenant level or a dispute with the provider.

Pricing punishes large data

Per-GB pricing rewards small tenants and gets expensive quickly for data-heavy ones. Backing up a decade-old project archive at the standard rate is how the cheap option stops being cheap. See the worked examples.

Restore semantics have edges

Restoring a OneDrive for a deleted user leaves it in an orphaned state until you reconnect it. Inactive mailboxes need to be recovered before they can be restored, and the resulting mailbox has to be re-added to the backup policy. None of this is hidden — it's documented — but people generally read it on restore day.

What this means

For a mid-sized organisation whose main worries are accidental deletion and ransomware, with moderate data volumes and no Teams chat requirement, native backup is likely the simplest and cheapest answer. Outside those conditions, a third party still earns its licence fee.