Understanding storage allocations in SharePoint Online can be a bit confusing. If we look at the storage allocations for the E and P plans....

Topic

E plan

P1 plan

Storage (pooled)

10 GB base customer storage plus 500 MB per enterprise user

10 GB base customer storage plus 500 MB per user

Storage per Kiosk Worker

0

N/A

Storage per external user

0

0

Additional storage

Available at a cost per gigabyte (GB) per month. See this blog post for more.

N/A

Site collection storage quotas

Up to 100 gigabytes (GB) per site collection

35 GB

My Site storage allocation(individual) (1)

500 MB of personal storage per My Site (once provisioned) (2)

N/A

Total storage per tenant

Up to 25 TB per tenant

35 GB

(1) does not count against tenant‘s overall storage pool
(2) the storage amount on individual’s My Site storage cannot be adjusted

...we see that there are two kinds of storage allocations - pooled and individual.

Pooled Storage - As seen in the above table each customer tenant in SPO receives a default amount of 10GB of storage. Users under K plans and external users do not contribute to the pooled storage. Currently, pooled storage has a 25TB limit in the E plan (35GB for the P1 plan)

Individual Storage - End users who get a My Site (E1-4 SKUs – P1 SKU doesn’t include My Site) receive 500MB of personal (individual) storage when they first self-provision their MySite (when they click the "Content" tab of their My Site). This storage is in addition to the pooled storage allocated to the customer tenant per USL, but is not aggregated.

 

Example Scenarios:

  • A customer who purchases 1,000 Office 365 E1-4 seats
    • Pooled storage = 10GB + (1,000 * 500MB) = 510GBs
    • Individual storage = 500MB per self-provisioned MySite user = 500GBs if all users provision My Sites
       
  • A customer who purchases 60,000 Office 365 E1-4 seats
    • Pooled storage = 10GB + (60,000 * 500MB) = 30TBs. Since the maximum pooled storage is 25TB, this customer will get 25TB of pooled storage. If the customer requirements exceeds the 25TB limit, the customer must work their Microsoft representative.
    • Individual storage = 500MB per self-provisioned MySite user = 30TBs if all users provision My Sites

See also

  • SharePoint Online: software boundaries and limits - link
  • How to back-up Office 365 SharePoint Online data - link
  • How to Add Extra Storage to SharePoint Online - link