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Summary: Common causes of data loss in Microsoft 365 are human errors, cyberattacks, misconfigured file retention periods, expired Microsoft licenses, data overwriting, deactivated user mailboxes, and failure to back up data. This blog discusses major reasons for data loss in Office 365, along with a tool to simplify Microsoft 365 backup.
A common misconception that many users have is that anything that is stored and operated in the cloud is already backed up. Therefore, the idea of backing up cloud data on a computer never crosses their mind. But in truth, no or delayed Office 365 backup is one of the most common reasons for data loss.
Many users are not familiar with the reasons that can lead to data loss in Microsoft 365. For example, in June 2026, over 170,000 nonprofits lost data because of a retired license and data retention policies. Therefore, to make sure you can protect your data, in this blog we will discuss multiple causes for Office 365 data loss.
What are the Common Reasons for Data Loss in Office 365?
Various situations can result in data loss in Office 365, but the most common ones are given below:
1. Deleting Data by Accident
Accidental deletion of data is the most common reason behind data loss in Microsoft 365. Such data loss events are difficult to predict and stop because they are unintentional. Individuals can delete files and other documents by mistake in all Office 365 applications, including SharePoint Online, OneDrive, and Exchange Online.
What causes accidental deletion?
- The user clicked on the wrong button and deleted an email, item, or file that was not supposed to.
Real Incident: In 2025, a new intern who had access, no one knows why, to some critical SharePoint sites containing data for a big project that was on hold. He accidentally deleted them. We came to know about the file deletion after 105 days, and by then the recovery window was gone. It cost our business more than $20,000.
- The user assumes that files are no longer required and deletes them once the current project is over, only to realize they are necessary for future projects.
However, the data is not lost immediately. When you have accidentally deleted data from any Microsoft 365 component, you have a specified time period called the retention period. You can recover the deleted Office 365 emails, contacts, groups, and other data items in that period. But when the retention window is closed, the data is permanently purged from Microsoft servers.
2. Deleting Data Intentionally
Another reason for Office 365 data deletion could be deleting it intentionally. This occurs primarily due to delayed or no communication with the admin regarding an employee’s exit.
Suppose an employee is about to exit from the organization due to resignation or termination, and they have access to Office 365 data. In such cases, the employee can intentionally delete files or folders whenever they want.
That’s why it is necessary to immediately inform the Office 365 administrator when the employees are about to leave the organization, so their access can be safely revoked. It is one of the Microsoft 365 security best practices that every organization must follow to prevent the deletion of essential data.
3. Malware, Ransomware, and Viruses
While platforms are strengthening their security, malicious activities are also advancing. No matter how strong Office 365 security is, the risk of cyberattacks always exists. These events can occur anytime on a user account and make their application suffer from data loss. If a hacker gets access to your Microsoft 365 account, the app won’t be able to detect who is using it.
How Does it Occur?
- Phishing attacks: These attacks trick you into stealing essential information, logins, passwords, and email addresses, which attackers can later use to remove your entire data.
- Ransomware: Office 365 access can also be affected when ransomware locks your system. These attacks occur within a fraction of a second and can cause a heavy loss to the business.
- Malware: Malware can enter your system or Office 365 account via emails, attachments, storage drives, setup files from untrusted sources, etc., and compromise your system, server, and network data.
To protect Office 365 mailbox from ransomware attacks, implement strict security policies and to avoid such situations, entire staff must undergo extensive malware and cyberattack prevention training.
4. Poor Data Migration
Organizations often migrate emails within mailboxes or complete mailboxes between tenants in scenarios like business mergers or restructuring. Sometimes, human errors, server crashes, internet issues, or permission issues can terminate the migration before completion, resulting in corruption or data loss in some events.
This usually occurs when you conduct migration using manual procedures that are never error-free. Even a tiny error while migrating data can result in a considerable loss for the organization.
To avoid those situations, you must choose a reliable Office 365 migration tool like the Kernel Office 365 Migration tool. The tool allows you to retry failed items multiple times without creating duplicate data and does not delete or modify any source data item.
5. Subscription Retired or Terminated
Businesses buy Microsoft 365 subscriptions to manage everything from user login to the client’s data and pay yearly or monthly fees on a contractual basis. Sometimes, organizations fail to renew the contract or deliberately do not renew it. In such scenarios, Microsoft will delete the complete data of the business in the tenant when the grace period ends. This is similar to the scenario I told you about at the beginning of the 170,000 nonprofits.
To make sure your business data is not lost due to a missed renewal notification, set up reminders in advance, put the payment on autopay, and, most importantly, maintain an independent Office 365 data backup.
6. Cancellation of User License
When an employee with access to a Microsoft 365 account leaves your organization, the Office 365 license for that user account is terminated, and the mailbox is deactivated. Sometimes, the admin forgets to archive the mailbox data, and later, as per Microsoft policies, the data is purged from the server. This is among the common causes of data loss in Microsoft 365.
How to Prevent Data Loss in Office 365?
The reasons for data loss in Office 365 we discussed above lead to loss in data. But if you ask me why most organizations lose data, I will say it is because they fail to back up their data. Those who periodically back up their Office 365 data are safe from permanent data loss.
Therefore, the best strategy against data loss is to:
- Back up your data while following the 3-2-1 backup rule.
- Implement Office 365 data loss prevention policy
- Plan for Office 365 disaster recovery
Conclusion
Storing data in Office 365 is safe, but it could be critical if some malware enters the system, or any user deletes the data intentionally. So, it’s necessary to back up Office 365 to keep your data safe. This article mentions all the common reasons for data loss in Office 365. As an Office 365 user myself, I recommend you export Office 365 data to PST or another format and save the data locally on your system.
Frequently Asked Questions
Ans: Most commonly, you will face data loss scenarios in Exchange, SharePoint, OneDrive, and Teams. These are the applications that are affected the most.
Ans: Data loss can disrupt multiple business operations and cause downtime, productivity loss, projects halt/delayed, etc., all leading to financial and reputational damages.
Ans: Yes, it can. Often, the common causes of data loss in Microsoft 365 go unnoticed. Users and admins do not realize for months that a file has been changed or deleted. In such a case, the recovery window expires, and they permanently lose data.
Ans: Your data on the cloud stays as it is. When you download data, a copy of your files or folders is downloaded to your system. No file is changed or removed from the Office 365 account.
