On Demand Classification Processes Cold Files to Find Sensitive or Confidential Information

Message center notification MC1013459 (21 February 2025) announces that Microsoft will introduce a new Information Protection service to find and classify “historical data in SharePoint Online and OneDrive for Business,” or as Microsoft 365 roadmap item 475062 says “scan cold files.”

The idea seems to be that tenants might have a bunch of files in SharePoint and OneDrive that have never been scanned or not been scanned in some time. Purview solutions like Data Loss Prevention (DLP) and Information Protection (sensitivity labels) tend to operate against active files created and edited by users. Cold files gather the digital equivalent of dust and might never be accessed, and it’s possible that those files contain many types of sensitive data.

Closing the gap by finding and classifying the information discovered in “cold files” is what the new On Demand Classification service is all about. By processing historical data, an organization can make sure that the files present in the tenant are classified appropriately. Once classified, policies can be automatically invoked to apply actions like assigning sensitivity or retention labels to files.

Preview of On Demand Classification in March 2025

Perhaps because trainable classifiers are an important method for tenants to find information that’s specific to their business, On Demand Classification is available through the classifiers section of the Purview DLP solution.

Microsoft expects to begin the deployment of a preview version of the code to targeted release tenants in late March 2025 with the goal of attaining general availability in mid-June 2025. Dates have been known to slip in the past, especially with new services, so treat these dates with caution.

Pay As You Go On Demand Classification

The On Demand Classification service is an example of the kind of new functionality that Microsoft bundles into its Office 365 E5 and Microsoft 365 E5 products to tempt customers to upgrade. That’s not the situation in this case. On Demand Classification is the first Purview Pay-as-you-go (PAYG) service.

PAYG is not unknown in Microsoft 365. SharePoint Online has PAYG services like Microsoft 365 Backup, Microsoft 365 Archive, and Document Translation, all of which require customers to have an Azure subscription attached to a valid credit card to pay for metered resource consumption. Other examples include the Graph API to apply sensitivity labels programmatically to Office documents and PDF files in SharePoint Online and OneDrive for Business and the export APIs for Teams and Exchange Online.

The case can be made that all the PAYG offerings are optional and not mainline services. They fill niches that not every Microsoft 365 customer wants or needs. It would be possible to include these services in the Microsoft 365 E5 product, but likely at an increased cost for everyone. Overall, it seems fairer for Microsoft to do the software engineering to create the solutions and realize a return by selling metered services to customers that need these capabilities.

No Details about Service Limitations

Microsoft hasn’t released any details about potential service limitations like the 100,000 items per day maximum an auto-label policy (sensitivity labels) can process within a tenant. We don’t know what kind of cold file types can be processed or if specific policy-invoked actions are restricted to certain types. The screenshot released by Microsoft (Figure 1) doesn’t give any insight into how long a scan might take or how long the subsequent processing might require.

All will be revealed when we get the software to test sometime in March 2025. Of course, some historic data must be found for On Demand Classification to process, but I’m sure that I have some old articles or book files hanging around that deserve to be heated up.

So much change, all the time. It’s a challenge to stay abreast of all the updates Microsoft makes across the Microsoft 365 ecosystem. Subscribe to the Office 365 for IT Pros eBook to receive monthly insights into what happens, why it happens, and what new features and capabilities mean for your tenant.