Estimating Microsoft 365 backup costs is notoriously tricky because every vendor uses a different billing metric. Microsoft charges per gigabyte of protected data per month. Vendors like Veeam, Datto, and Spanning charge flat per-user fees. Purpose-built platforms charge a base software license fee plus whatever you pay your cloud provider for S3 or Blob storage. Comparing a quote from Vendor A to Vendor B is rarely apples-to-apples.
To figure out what you'll actually spend annually, you have to break down your environment into two numbers: total seat count and total active storage footprint (Exchange + SharePoint + OneDrive).
The Consumption Model: Microsoft 365 Backup Native
Microsoft's native M365 Backup product costs roughly $0.15 per GB of protected data per month. If your 250-user organization maintains 4 TB of data across SharePoint, OneDrive, and Exchange, your math looks like this:
4,000 GB × $0.15/GB/month × 12 months = $7,200 / year
If your users are light on data (say, 500 GB total), consumption pricing is extremely cheap ($900/year). But if you are a media or engineering firm with 25 TB of SharePoint files, consumption pricing explodes to $45,000/year — regardless of user count.
The Per-User SaaS Model
Traditional SaaS backup vendors usually charge between $3.00 and $5.00 per user per month with unlimited or pooled storage included. Using the same 250-user company:
250 users × $4.00/user/month × 12 months = $12,000 / year
Here, data growth doesn't penalize your bill. However, you pay full price for light users who rarely generate files, and you may face hidden API limits or throttle penalties if your data volume is exceptionally large.
The BYO Storage Model (North Brook Vault approach)
Separating the backup software licensing from the underlying storage yields the lowest Total Cost of Ownership (TCO) at scale. Software licensing typically runs $1.50 to $2.50 per user per month, paired with commodity object storage like AWS S3 Standard ($0.023/GB/mo), Cloudflare R2 ($0.015/GB/mo, zero egress), or MinIO on-premises ($0/GB/mo marginal cost).
For 250 users with 4 TB on Cloudflare R2:
Software: 250 × $2.00 × 12 = $6,000 / year
Storage: 4,000 GB × $0.015 × 12 = $720 / year
Total TCO: $6,720 / year
How to Choose the Right Model for Your Tenant
Run the numbers across all three models before signing a multi-year agreement. If your data per user is low (<15 GB/user), consumption models win. If your data per user is average (15–50 GB/user) or high (>100 GB/user), BYO-storage or fixed per-seat licensing is exponentially more cost-effective.