You’re reviewing your Microsoft 365 tenant, confident everything’s under control, when you notice SharePoint Embedded containers quietly consuming your storage quota. A recent LinkedIn post I shared about this issue surprised admins everywhere. Apps like Microsoft Loop, Designer, Copilot Agents, and Outlook Newsletters erode your tenant’s storage, while custom apps using SharePoint Embedded introduce separate Azure billing.

Navigating these complexities is a key challenge in Microsoft 365 administration. Let’s explore SharePoint Embedded, its storage and billing implications, and how admins can stay proactive to maintain control.

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What Is SharePoint Embedded?

SharePoint Embedded (SPE) is a cloud-based, API-driven platform that enables developers to build custom applications with Microsoft 365’s collaboration and security features. It powers first-party apps like Loop, Designer, Copilot Agents, and Outlook Newsletters, as well as custom apps built by organizations. Data for these apps is stored in “File Storage Containers,” visible in the SharePoint Online Admin Center under Containers. These containers impact your tenant differently depending on whether they support first-party or custom apps. For a comprehensive overview, see my post, “What Is SharePoint Embedded? A Simple Guide”.

The Storage and Billing Challenge

The complexity stems from how SharePoint Embedded containers are managed. Containers for first-party Microsoft 365 apps—Loop, Designer, Copilot Agents, and Outlook Newsletters—consume your tenant’s storage quota, similar to SharePoint Online sites or OneDrive files. As detailed in my post, “Never Fear M365 Storage Again!”, heavy usage of these apps can quickly deplete your storage, potentially surprising admins if not monitored.

Conversely, containers for custom apps using SharePoint Embedded do not affect your Microsoft 365 storage quota. Instead, they incur costs through a pay-as-you-go Azure subscription. This spares your storage but introduces the risk of unexpected Azure charges. This dual system—storage constraints for first-party apps and billing surprises for custom apps—requires admins to balance resource management and financial oversight, adding complexity to an already demanding role.

Why It Matters

This storage and billing dynamic can disrupt your operations. Key impacts include:

• Storage Depletion: First-party apps like Loop and Copilot can rapidly reduce your tenant’s storage, especially with widespread team adoption.
• Unexpected Costs: Custom SPE apps generate Azure charges that can escalate without monitoring.
• Operational Risks: Exceeding storage limits may disrupt workflows, block file uploads, or require urgent fixes during critical moments.

As an admin, your goal is to ensure seamless operations, user satisfaction, and cost predictability. SharePoint Embedded’s nuances threaten these objectives, but strategic management can mitigate risks.

Actionable Strategies for Admins

To navigate this challenge, implement these practical steps:

• Monitor Storage Usage: Regularly review the SharePoint Online Admin Center to track SharePoint, and OneDrive usage. This proactive check helps you avoid storage shortages.
• Use PowerShell: Leverage cmdlets to analyze SharePoint Embedded container types and their storage impact, providing clear visibility into resource usage.
• Set Alerts: Configure storage alerts in the Admin Center to receive notifications when nearing capacity, enabling timely action.
• Track Azure Costs: For custom SPE apps, monitor the Azure Cost Management portal to manage pay-as-you-go charges and prevent budget overruns.
• Plan for Growth: Account for first-party app usage (e.g., Loop, Copilot) when forecasting storage needs, and budget for Azure costs for custom apps.

For enhanced control, assign the SharePoint Embedded Administrator role to a team member to manage containers directly in the SharePoint Online Admin Center. Trial containers, free for 30 days offer a risk-free way to explore SharePoint Embedded. For additional guidance, check my posts on Intranet from the Trenches.

Conclusion

When I discovered Copilot Agents were consuming tenant storage rapidly, I was surprised. The realization that custom SPE apps trigger separate Azure bills added another layer of complexity for admins already juggling multiple responsibilities. Have you noticed storage reductions from Loop or received an unexpected Azure bill? Share your experiences in the comments—let’s exchange insights to navigate these challenges together.

References

SharePoint Embedded posts in Intranet from the Trenches: https://intranetfromthetrenches.substack.com/t/sharepoint-embeddedy-tips-2

LinkedIn post about SharePoint Embedded containers: https://www.linkedin.com/posts/jaimelopezlopez_sharepointembedded-microsoft365-mvpbuzz-activity-7342797332217769984-JBNe?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAEizlsB82a0E1lEXZGhxs3IwFmclAgm-IM

What Is SharePoint Embedded? A Simple Guide: https://intranetfromthetrenches.substack.com/p/what-is-sharepoint-embedded-a-simple-guide

Never Fear M365 Storage Again!: https://intranetfromthetrenches.substack.com/p/never-fear-m365-storage-again

About the Author

Jaime López

Microsoft MVP | Microsoft 365 Specialist | SharePoint | Technical Blogger

Reference:

Lopez, J (2025). SharePoint Embedded Storage Surprises: What Admins Need to Know [Accessed: 11th October 2025].