Citing abuse by some bad apples (my words), Microsoft is nixing free unlimited OneDrive storage for most users.

According to a Microsoft (MSFT) blog post, a “small number of users backed up numerous PCs and stored entire movie collections and DVR recordings” on OneDrive. In some cases, that meant more than 75 terabytes of storage per person.

So, the company will stop offering free, unlimited free storage to subscribers of its Office 365 Home, Personal or University editions. This is the same free, unlimited storage it announced a year ago when it said “storage limits just became a thing of the past with Office 365.” The idea was to sweeten the pot to get customers to migrate to the new applications.

But now, effective immediately, those customers will get 1 terabyte of storage with their subscription.

The free tier of OneDrive will shrink from 15 gigabytes to 5 gigabytes for all users, and there are other changes outlined in the blog post. If you are one of the aforementioned bad apples, Microsoft will notify you of this change and you can hold on to your data for “at least 12 months.” Or if you now want to jump ship from Office 365, the company will provide a pro-rated refund. It’s all in the FAQ.

There are lots of free or cheap cloud storage options available from Google(GOOG), Dropbox, Box(BOX) and other companies—you can get 15 gigabytes worth of Google Drive for free—so Microsoft may see defections, but the company has another problem here.

This looks like a bait-and-switch. Customers who are paying for a product (Office 365) and were promised a “free” perk with it, may not take kindly to a supplier reneging on it. Especially since this is a big, profitable supplier. It sort of smacks of a company cutting costs on the backs of its customers.

This is not the first time a cloud storage or file-sharing provider has axed a free unlimited option, but Microsoft, by virtue of its size, is the most noticeable thus far.

ZDnet has an interesting take here.

And, for more on Microsoft, check out the video below.

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