Within the Outlook ribbon, there’s a big button that says Archive. If you select a message and click that button, the message will be sent to the Archive folder. This is a system folder and cannot be deleted, but it’s really just a folder under your primary Inbox, so this particular Archive still uses up your allotment of space on the mail server.
Depending on your Office 365 subscription plan, there are differing capacities for the primary mailbox. But all Office 365 plans that include Exchange Online (basic cloud-based email service) have another Archive location, which is essentially another mailbox, just tied to your own email account.
This other Archive location effectively doubles the size of your mailbox. For example, if you have Office 365 Business Premium, then you get 50 GB of storage space for your primary mailbox and 50 GB of storage space for your Online Archive or In-Place Archive – no one seems to agree on which is the most current or correct name. (In the Outlook for Mac email client, this online archive folder shows up as ‘Online Archive’. In Outlook for Windows, it shows up as ‘Online Archive – email@example.com’. In Outlook on the web, it shows up as ‘In-Place Archive – Your Name’.) Whatever you call it, its capacity is also 50 GB, however, it’s an ever-expanding capacity, automatically adjusting at 10 GB intervals, so it’s really an unlimited repository.
The way that you offload mail items to this ever-expanding online repository is by way of retention policies. You might have a policy that dictates all mail items under your Inbox older than 1 year will automatically be moved to the Online Archive. When all of these items arrive in the Online archive according to the policy, the sub-folder hierarchy reflects your primary Inbox and its folders. So if you have a folder called News under your Inbox, then a News folder will be created in the Online Archive along with the contents that are older than one year.
So similar to Inbox Rules, a Retention Policy is an automatic way to organize your email and take advantage of a vast storage space.