Office 365 Recipient Limits – Fighting Spam or Hindering Users?

Having been inspired by a post I just read, I want to respond to an article over at ZDNet, where Ed Bott recently posted an article about Office 365 and the recipient limits of the service, titled Small businesses, beware the Office 365 fine print. I also want to discuss what anyone considering outsourcing anything needs to do to make sure there are no surprises.

In his article, Mr. Bott relates a couple of anecdotes regarding customers who are signed up on the Office 365 service, who then find out much to their chagrin that they are only allowed to send emails to 500 recipients per day, per user. He paints the picture of how limiting this is to businesses, including the story of one CEO who tried to send an email “to 400 of the company’s customers and prospects” and then discusses what could happen if a business is featured on a national news show or prominent website, and is unable to respond to customer inquiries.

I usually enjoy Ed’s posts, but find myself compelled to be the voice of reason and paint a fair and balanced picture here for admins considering Office 365, or any other outsourced email service. In the case of Office 365, we are discussing what for most customers is a shared service. All shared services should have limits on resources that can be consumed by a single customer in a set time frame; limiting the amount of resources one tenant can consume is a basic protection for all the other tenants. As a tenant, I want that to make sure another tenant cannot deprive me of the services I am paying for.

For an SMB, a user will hit this 500 recipient limit if they send one email per minute all day, taking only 20 minutes for lunch. That’s a lot of time in email. That is an extreme example, and is highly unlikely. What is likely is that a company, trying to save as much money as possible, starts down the path of email marketing, using the Office 365 service to send out bulk email. That is not what Office 365 is for, and they spell that out in the documentation.

In the specific case of the CEO who could not send email; she was a P1 customer, which is a plan targeted at SMBs with 25 or fewer users, and not designed for bulk mailing. She attempted to send a single email to 400 recipients, and was blocked because of the recipient limits detailed in the Office 365 service, which you can find here. Microsoft specifically discusses this limit being in place to restrict spam and control abuse by users. Whether she had already sent 101 messages that day or 499, she hit the 500 in a 24 hour period. That’s a lot of mail no matter how you slice it.

Now I must admit, I seldom read every single thing that is online about a product or service before I buy it; when I hit a limitation I didn’t know about because I didn’t do my homework, that is my fault. Whether I hit the maximum number of shared minutes on my cell phone plan, or the maximum bandwidth on my hosting plan, I opted to try saving money by choosing a smaller plan. When I hit the limits I can either scale back, or upgrade to a larger plan.

Office 365 has suggestions for companies that wish to send higher volumes of messages, which can be found here. For internal use, they discuss distribution groups, which count as a single recipient. For external use, they suggest using an on-premise mail server. That is probably not an ideal solution for most SMBs, but the service limits are in the documentation and they are designed to be fair to the majority. In a shared service, that is only fair.

In the case of sending an email to 400 users, I would counsel any business to use a bulk mail service for fear that, even if my on premise servers could handle the load, the risk of being flagged as a spammer is too high to chance.

When considering any outsourced solution (colo or cloud, co-tenant or dedicated,) make sure you carefully read all of the service descriptions, including service level agreements, limitations, overage charges, etc. and then consider how they apply to your worst case scenario. There are several reasons why such a service is less expensive than doing it yourself. Limitations are a part of that. You need to consider whether or not your business can function within those limitations, and how to address any exceptions.

Will a small business need to send email to 500 users every day? Unlikely, but knowing about that limitation in advance should have been as simple as reading the documentation instead of just skimming the advertising hype. Knowing what you are buying is the customer’s responsibility. Caveat emptor.

Written by Casper Manes

I currently work as a Senior Messaging Consultant for one of the premier consulting firms in the world, I cut my teeth on Exchange 5.0, and have worked with every version of Microsoft’s awesome email package since then, as well as MHS, Sendmail, and MailEnable systems. I've written dozens of articles on behalf of my past employers, their partners, and others, and I finally decided to embrace blogging and social media, so please follow me on Twitter @caspermanes if you enjoy my posts.


  1. Andrew Yairley · November 18, 2011

    If a distribution group counts as 1 recipient, then nobody has any room to complain about this limitation. They just need to be smarted and make full use of what this service is capable of. Honestly, there is absolutely no room to complain with Microsoft making that concession.

  2. Casper Manes · November 18, 2011

    Spot on Andrew…that’t the way I see it too.

  3. Gilbert Mason · November 19, 2011

    The limit to only 500 recipients per day, per user is just one anti-spam factor Microsoft has implemented to their Office 365 platform. This does not only benefit the said program, it also benefits Office 365 users in general.

    I’ve been using Office 365 for two months now and I’m completely satisfied with it. I have no problems with the cap limit. Also, it’s impractical for someone to send to 500 recipients a day- it’s what distribution groups are for. Try to use it sometimes and stop whining about the limit.

  4. Joe P · December 1, 2011

    The limit is ridiculous. It is not only external but also internal email that are subject to the limit. The distribution list workaround only applies if the DL is in the GAL, not in your private address book. Many users have confidential people they send to; as well, it is silly to put one person’s DLs in the GAL just to circumvent this limit. The admin overhead to manage this is a killer.

    If you have 500 accounts with 1500 a day each (enterprise) or even a small company with 20 at 500 a day each, why not give the organization a rate limit per day and let people share the pool? There should be some way to override one person such as the CEO in this example. Without it, the service is worthless to most businesses.

    Putting up a local exchange server kind of defeats the whole purpose of the cloud so that is a poor option.

    Internal only emails should not count against the limit; makes no sense using the “spam” argument or any other argument.

  5. Jason · March 28, 2012

    I understand the limit, but what I do not understand is why they hide this limitation and what happens if a user hits the limit. If a user hits this limit they are locked out of sending email for 24 hrs(wich could amount to being without email for 2 business days depending on the time sent). I called support after a client discovered this the hard way and they said there is no way to overide the lock. The customer is cancelling their 365 account and it is hard to argue with them. 24 hrs of down time for a user that 365 support has no control over is not a good feature. I can understand the policy that locks it down but not having control to overide it amounts to down time.

  6. Joe · March 6, 2013

    The limit is 10,000 emails, per user, per 24 hour period… The “500” is a limit on the number of people that can be in the “Send To”.


  7. Casper Manes · March 11, 2013

    Nice catch Joe. I should have used the proper value, which was 1500 at the time I wrote this article, not 500 as above, but since it was raised to 10,000 for all recently, I will leave the original to remind myself to proofread better.

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