A customer raised a scenario today where they need to retain the email for compliance purposes for people who leave the company. Yet, they don’t want to have to keep Office 365 license assigned to these users who are no longer with the company. In the past, once you unassigned a license to a user, that user’s mailbox would be deleted after 30 days. The customer asked how to best support their scenario in Office 365.
A new feature (released 6/3/2014) called inactive mailboxes was built to support this scenario. See (http://technet.microsoft.com/en-us/library/dn144876(v=exchg.150).aspx)
Inactive mailboxes allows companies to keep mail content for deleted mailboxes indefinitely.
The key requirement is that the mailbox must be placed on Legal Hold before the Mailbox is deleted.
Once the mailbox has been put on Legal Hold, then the mailbox can be deleted. Once the mailbox is deleted, then the O365 license will be freed up.
The mail content for the departed users can be searched using the Exchange In-Place Discovery search.
See the attached document for more information: 2014-06-11-Exchange-Inactive-Mailbox-Support-In-O365-v2