Many SMEs assume that because their data sits in Microsoft 365, “backup” is implicitly handled. Operationally, the decision is more specific: are you relying on service resilience and retention features, or do you have an independent backup capability designed to prove recoverability? This article is for owner-managed SMEs using Microsoft 365 who need governance clarity, not tooling detail. The organisation remains accountable for ensuring business-critical data—including personal data—can be restored when required, and that recovery processes work in practice. An independent backup is best understood as a control: a protected copy that is separated from common failure modes and periodically validated through restore testing, so recoverability is evidence-led rather than assumption-led.

The decision you’re actually making: retention/resilience vs recoverability

What “retention” usually covers

Retention typically helps you keep data for a defined period and recover from certain user-driven actions (for example, accidental deletion within a window). It supports continuity, but it does not automatically prove you can recover from all scenarios that matter to your business.

What an independent backup is meant to prove

An independent backup is designed to prove recoverability: that a controlled copy exists, that it is protected from common failure modes, and that restoration is possible within the recovery expectations the business has defined. The emphasis is assurance—being able to demonstrate recovery capability, not just believing it exists.

Accountability: why “it’s in Microsoft 365” doesn’t change responsibility

Availability and recovery as governance obligations (UK GDPR context)

Accountability for availability and recovery does not transfer simply because a service is cloud-based. ICO guidance frames security as including risk-based organisational and technical measures, and highlights continuity, disaster recovery, and backups as governance considerations for protecting personal data.

Failure modes an SME should assume (without dramatising)

Accidental deletion and overwrite

Mistakes happen: files are deleted, folders are overwritten, and version history is not always where you expect. Governance requires you to know what recovery paths exist and whether they meet your operational needs.

Malicious deletion / destructive actions

A realistic governance assumption is that destructive actions can occur—whether through misuse of access, compromised accounts, or deliberate deletion. NCSC guidance on resilient and offline backups highlights separation so backups are not affected when live environments are impacted.

Service disruption vs organisation-level recovery need

Service disruption is not the only trigger for recovery. Organisations also need recovery capability for organisation-level scenarios: internal mistakes, changes, or destructive actions that require restoration even if the provider service remains available.

Synchronisation errors and propagation of loss 

In cloud services, synchronisation is designed to keep copies consistent across devices and users. That same consistency can propagate loss: if data is overwritten, corrupted, or removed in one place—whether by mistake or through a flawed change—it may replicate across other locations. Operationally, this matters because the organisation’s recovery need can arise even when the service remains available: you may need a restore point that predates the sync event, and evidence that you can recover cleanly to a known-good state.

What “recoverable” looks like in practice (concept level)

Separation and access control for backups

Recoverability depends on separation: backups should be protected so that issues affecting the live environment do not automatically affect the backup. NCSC guidance describes keeping backups separate (including offline or otherwise isolated) and controlling access so backups are not casually reachable or alterable.

Restore confidence and evidence (testing)

A backup that cannot be restored is not an operational control; it is a false sense of security. “Tested” means you have evidence that restore paths work for the data that matters, and that issues found are tracked and resolved.

A decision checklist for SMEs using Microsoft 365

Business-critical data categories and recovery expectations

The governance task is to define what must be recoverable: which datasets are business-critical, who relies on them, and what “acceptable recovery” means operationally. This does not require technical modelling; it requires clarity about business dependency.

Supplier/customer obligations and audit questions

Customer and supplier expectations often surface as audit-style questions: how do you protect data, how do you recover it, and how do you prove it. A separate backup capability can be driven by these obligations as much as by internal continuity needs.

How a Security Triage Call clarifies what you have vs what you assume

Where backup sits within a CE-style baseline review conversation

Backup and recovery sits alongside baseline governance: scope clarity, ownership, and evidence. A triage conversation can help distinguish what your current setup genuinely supports versus what is assumed, and identify where recoverability is not currently evidenced.

Common misconceptions

• “Microsoft 365 backs up everything by default.”

  Service resilience and retention are not the same as an independent, recoverability-focused backup capability.

• “If it’s cloud, the provider is responsible for recovery outcomes.”

  Accountability for recoverability—especially for business-critical and personal data—remains with the organisation.

• “Retention and recycle bins are the same as an independent backup.”

  Retention supports certain recovery scenarios; it does not automatically prove recoverability across failure modes.

• “Backups only matter for ransomware.”

  Backups also matter for deletion, corruption, and destructive actions that disrupt availability or integrity.

• “If backups exist, restores will work.”

  Restore confidence requires evidence through testing and tracked remediation.

• “Backup is an IT-only decision, not an operational governance decision.”

  Recovery expectations are operational: they affect continuity, accountability, and supplier assurance.

What to do next

• Define what “recoverable” means for your business in plain terms (critical data and acceptable recovery expectations).

• Confirm accountability: who owns recovery decisions and who can evidence recoverability.

• Establish what separation and access control must exist so backups are protected from common failure modes.

• Require restore evidence: ensure testing produces outcomes, issues, and tracked remediation.