Microsoft is quietly beefing up storage for its Microsoft 365 Business tiers—Basic, Standard, and Premium. The primary mailbox limit is jumping from 50GB to a much healthier 100GB, giving teams plenty of extra room for heavy attachments, years of email history, and everyday clutter.
Keep in mind that this rollout is happening gradually between June and September 2026. Because the update is applied on a per-user basis rather than flipping a switch for the whole company, your team might notice the extra space at different times. Don’t panic if your quota looks different from your desk neighbour’s for a few weeks.
On the surface, this looks like a pure upgrade. Fewer “mailbox full” warnings and less time purging old threads. But there’s a catch Microsoft didn’t mention, and it specifically impacts anyone using the Classic Outlook desktop app.
The hidden 50GB ceiling in Classic Outlook
Even though your cloud mailbox just doubled in size, Classic Outlook relies on a local Offline Storage Table (OST) file to keep things synced and working offline. By default, that local OST file caps out at 50GB.
Once it hits that ceiling, things start to break down. Microsoft *does let you manually bump up that local limit via the registry, but they strongly advise against it because massive local files tank performance. When an OST file gets too bloated, you’ll usually see:
* The app dragging, freezing, or becoming totally unresponsive.
* Search results vanishing or taking forever to load.
* Emails crawling in and out of the outbox.
* Syncing breaking entirely.
* Worst-case scenario: Outlook having to completely rebuild the local file, which can eat up hours of a remote worker’s day.
It’s also worth noting that the local OST format eats up space differently than the cloud. Your local file might actually hit the 50GB wall before your cloud mailbox even gets there.
So why hasn’t Microsoft just fixed the local limit?
The underlying architecture for Classic Outlook’s local files is ancient. It was never built to handle modern email hoarding, massive shared inboxes, or today’s attachment-heavy workflows. Bumping server-side storage is easy; managing giant local database files on a laptop is a nightmare.
This is exactly why the “New Outlook” app ditches the traditional OST file entirely, relying on a lighter, cloud-first caching system instead.
And what happens to the Online Archive?
Those limits are staying exactly the same. Basic and Standard plans still get a 50GB archive to pair with the new 100GB primary inbox. Business Premium gets Exchange Online Archiving, which starts at 100GB and can scale up to a massive 1.5TB.
But there’s a catch: an admin has to manually flip the “auto-expanding” switch via PowerShell. It’s off by default, and once you turn it on, you can’t turn it back off.
The archive is actually your best friend here. Anything moved there drops out of your primary quota and, crucially, doesn’t get downloaded into that problematic local OST file.
How to handle this on your end
If your team is still running Classic Outlook on Windows, you might not notice the 100GB upgrade right away. But as those inboxes fill up, the app will inevitably start crawling. To keep your users happy and your helpdesk quiet, tweak a few settings:
* Slide the “Mail to keep offline” slider down to just 3 to 12 months.
* Actually enforce your Online Archive policies so old mail moves out of the primary inbox.
* Stop caching shared mailboxes locally unless someone absolutely needs them offline.
* Push your heaviest email users over to the New Outlook app.
Our take
Doubling the mailbox limit is a great move, but it essentially shifts the storage bottleneck from Microsoft’s cloud down to your users’ desktops. As a managed service provider, we’re already bracing for the fallout. We expect to start seeing Outlook performance tickets spike in a few months as local files creep toward that 50GB ceiling.
The good news? It’s an easy fix if you get ahead of it. Lock down your cached mail settings, make sure your archiving rules are actually running, and have a migration plan for the New Outlook. If your inboxes are swelling and the desktop app is already feeling sluggish, fix it now before it turns into a full-blown support headache.