Microsoft 365 Updates and Retirements: What EDU & SLED IT Teams Need to Know This October

Microsoft 365 keeps moving — and for education and state and local government (SLED) IT teams, this month’s changes touch everything from the apps pinned to your users’ taskbars to how your organization pays for OneDrive storage to the PowerShell tools your admins use every day.

Three updates stand out for October: the retirement of the Microsoft 365 companion apps, a new pay-as-you-go billing option for OneDrive storage, and a required upgrade to the ExchangeOnlineManagement PowerShell module. Each one comes with a date, and each one is easier to handle when you plan ahead.

For teams already balancing cybersecurity, infrastructure, compliance, and day-to-day support, keeping up with Microsoft’s change calendar is a lot to ask.

We’ve pulled together what’s changing, who’s affected, and what your team should do next.

The bottom line: Don’t let a Microsoft retirement date turn into a help desk surprise. Review your environment now, identify what’s affected, and build the changes into your IT and security roadmap.

1. Microsoft 365 Companion Apps Are Being Retired

What’s changing?

The Microsoft 365 companion apps — Calendar, People, and Files — are taskbar-integrated apps designed to help users stay focused, reduce context switching, and finish tasks faster. Microsoft is retiring them, and they will stop functioning and no longer be supported after December 16, 2026.

Microsoft has already begun phasing out automatic installation. Updates and fixes, including security fixes, are no longer being provided, though existing installations can keep working during the retirement window.

Who is affected?

Worldwide enterprise customers that installed the apps. Removing them will not delete or impact any existing capabilities or Microsoft 365 data — users can keep finding calendar information, people, and files through Outlook, Teams, the Windows search box, File Explorer, SharePoint, OneDrive, and more.

What should IT teams do?

Complete these steps before December 16, 2026:

• Notify users that the companion apps are being retired.
• Stop new installations through managed deployment methods. Microsoft will stop installing the apps automatically through Microsoft 365 Apps updates, but other deployment methods need to be addressed by your team.
• Remove existing installations from managed devices. Users on unmanaged devices should uninstall the apps themselves.
• Remove references to the companion apps from internal documentation, guides, communications, and training materials.
• Review Microsoft’s retirement article for the full list of required steps, including troubleshooting guidance if an issue arises during the retirement period.

Microsoft resources

Microsoft 365 Companion App Retirement | Microsoft Learn

2. OneDrive Adds a Pay-As-You-Go Storage Billing Option

What’s changing?

Microsoft is introducing a pay-as-you-go, consumption-based billing option for additional OneDrive storage. It gives administrators more flexibility to manage storage growth by allowing selected OneDrive accounts to exceed their licensed storage quotas when needed, while keeping control over which users can do so.

Pay-as-you-go storage is in public preview now for all commercial tenants worldwide. General availability begins rolling out in early November 2026 for Worldwide, GCC, GCC High, and DoD environments, with rollout expected to finish by early December 2026.

Who is affected?

Microsoft 365 commercial tenant administrators who manage OneDrive storage, particularly organizations with users approaching or exceeding their licensed storage quotas. Accounts you enable for storage above their quota will be billed automatically based on usage.

What should IT teams do?

• No action is required if you don’t plan to use pay-as-you-go storage.
• If you’re considering it, identify OneDrive accounts approaching or exceeding their licensed storage quotas.
• Evaluate whether pay-as-you-go storage is the right fit for your organization, and which accounts, if any, should be enabled.

Microsoft resources

Buy More OneDrive and SharePoint Storage Capacity | Microsoft Learn

3. Action Required: Upgrade the ExchangeOnlineManagement PowerShell Module to 3.10.1 or Later

What’s changing?

Microsoft has added security enhancements to Exchange Online PowerShell authentication in ExchangeOnlineManagement module version 3.10.1. These changes strengthen the authentication flow and protect against emerging threats. Enforcement of strict logon requirements begins March 31, 2027, with rollout starting in late March 2027 and finishing by late April 2027.

Who is affected?

Anyone using a module version earlier than 3.10.1. After enforcement begins, older versions may experience authentication failures in certain interactive scenarios — particularly when PowerShell 7 is used with Web Account Manager (WAM) disabled.

You may not be affected if you’re using version 3.10.1 or later, certificate-based authentication, WAM-based authentication, or Windows PowerShell 5.x.

What should IT teams do?

• Identify systems running ExchangeOnlineManagement versions earlier than 3.10.1.
• Upgrade affected installations to 3.10.1 or later before enforcement begins.
• Validate administrative scripts, automation solutions, and operational procedures before enforcement.
• Check installed versions by running: Get-Module ExchangeOnlineManagement -ListAvailable

Microsoft resources

ExchangeOnlineManagement | PowerShell Gallery

What EDU & SLED IT Teams Should Do Now

Microsoft 365 changes don’t happen in a vacuum. What looks like a simple app retirement or module update can ripple into user support, licensing and billing, and the scripts your admins rely on.

For education and government IT teams, the challenge is often less about understanding what Microsoft is changing and more about finding the time to figure out what it means for your environment. Start here:

• Check the Microsoft 365 Message Center regularly. Don’t wait for a user to report an issue — review upcoming changes and flag what needs action.
• Inventory what’s installed. Know which devices have the companion apps and which systems run older PowerShell modules.
• Get ahead of user communication. A short heads-up about the companion apps now saves help desk tickets in December.
• Decide on storage early. If users are bumping into OneDrive quotas, decide whether pay-as-you-go makes sense before general availability arrives.
• Build changes into your roadmap. Retirement dates have a way of arriving faster than expected. Leave time to test, communicate, and document.

Microsoft 365 Security Is Powerful. Managing It Is the Hard Part.

Most EDU and SLED organizations already own powerful security capabilities through Microsoft 365, including Microsoft Defender, Microsoft Entra ID, and Microsoft Purview. The challenge is putting those tools to work consistently — while keeping up with Microsoft’s constant changes and managing everything else on your IT team’s plate.

That’s where Forsyte can help.

Guardian 365 provides 24×7×365 managed security operations built around the Microsoft security ecosystem you already own. Our team helps organizations monitor, investigate, hunt for threats, respond to incidents, and continuously improve their security posture.

For education and government organizations, that means getting more from your Microsoft investment without having to build and staff a full security operation in-house.

We make security easy.