It is an unfortunate fact of life that many starting and established businesses fail.  It is even more unfortunate that in the COVID-19 pandemic we are seeing business failure at a larger rate than normal.  As a result, many business owners must navigate the difficulty of dealing with the digital footprint of a failed business.  Recently I have been asked by a few clients to review the options of what to do with Office 365 data when a business goes out of business.

In general, businesses attempting to get data out of Office 365 will have similar options.  However, no business is the same, and no situation is the same.  In terms of data, I have tried to break these scenarios down into two major categories – Voluntary Closure and Involuntary Closure.  Note the legal disclaimers as we go!

Voluntary Closure

With the COVID-19 pandemic, we are seeing some companies closing voluntarily.  Many feel they will not be able to be viable if they continue.  Some feel they will come back after the pandemic; others feel they will not be viable again in the future.

In these situations, the businesses are closing while they can be in control, paying any debts, and preserving any wealth that they have.  This article applies well to these situations, and unless it is felt there may be litigation in the future, this is a good guide. 

If there is pending legal action, or perceived legal action, you need to tread lightly and get proper legal advice on your legal liabilities and requirements.

Involuntary Closure

Unfortunately, with the COVID-19 pandemic, we are seeing companies close involuntarily.  Most commonly, this is bankruptcy and firms going into administration.  These situations are a bit more complicated because they are normally in litigation and not in control of their decisions.  Data may need to be maintained in order to address court proceedings and the facilitation of assets being dissolved.  If you are trying to help a firm in this situation, you need to be very careful.  The owners are not likely in control and you need to take direction from the firm running the bankruptcy.  This article can apply, but be careful you do not put yourself into hot water.

The other aspect is that data is an asset.  If the brand and portions of the business have value, many administrators will sell off the parts of the company that have value.  These administrators have a duty to attempt to recover whatever they can to pay debts.  In these situations, the data must be made available to preserve value in the sale.

Considerations

For most businesses in this situation, they want to avoid paying for Office 365 licensing as soon as possible.  To get there, one must answer a few questions:

1. Why do you want to preserve the data?
   1. Is this just in case, or do you want to restore and use it again?
2. Where would this data go in the future?
   1. Would you put it back in Office 365 or on another server?
3. How far down the line are we talking about?
   1. Are you considering a relaunch in 6 months or in years?  Is it better to pay for licensing than the cost and risk of manipulating data?
4. Are you on a pay-as-you-go subscription, or do you have a contract?
   1. Depending on your size and situation, you may have months to go in your agreement.

Options

1. Litigation Hold
   1. For firms that know they will come back in the future, you may be able to put some licenses on hold and remove them.  Inactive accounts have been a target in the past for billing, but as of this writing, this policy is not the case.
   1. This continues to be a large grey area.  In Tenant-To-Tenant migrations some have left entire tenants around by keeping one active license and putting everyone else on hold.  This is a bit extreme, but if you have a 100,000 user tenant, the rules bend more to you than a 25 user tenant.
   1. Helpful links:
      1. Inactive Mailboxes in Exchange: https://docs.microsoft.com/en-us/microsoft-365/compliance/inactive-mailboxes-in-office-365?view=o365-worldwide
      1. OneDrive Retention Process: https://docs.microsoft.com/en-us/onedrive/retention-and-deletion  (note the exceptions in blue)
2. Backup & Abandon
   1. One option is to use a backup vendor.  Check for the costs and the options that you need.  However, keep in mind, just because the system can “back it up” it does not mean it can be restored in the same manner.
   1. If you have a small number of users and only have OneDrive & Email, you could export the data to a PST and backup OneDrive Files.  This is a manual process and you risk missing items, but it is an effective option for a few users.  You could then encrypt the data and store it in a service like Drop Box or a personal OneDrive.  Do not rely solely on a removable USB drive!
3. Consolidate Accounts
   1. If you have a small amount of data, one option is to combine things down to a few accounts
4. Do nothing
   1. If this is a temporary blip, and you are in a contract, it might be best to just let things float.  You may not save any money, but it will allow you to restart quickly.

Key Concepts

• Do not assume that backing data up means you can restore it cleanly.  A very good session for this concern is a session that AvePoint did here:  https://www.avepoint.com/uk/events/webinar/debate-need-o365-backup
• Migrating/moving data has costs and risks.  You need to balance this with the solution.

I hope that this article helps you understand the options of what to do with Office 365 data when a business goes out of business.  Helping business owners in these fraught times is very difficult.  Like most business issues, it is important to take a step back, understand the goals and requirements, and then solution the issue.