OneDrive offers a lot of advantages. Being cloud based, it can store huge amounts of content depending on your Microsoft plan. The basic personal plan limits storage to just 5GB. Recent promotions with cell phone sales offers 100-200 GTB. Business plans start at 1TB and go to 5TB free. You can purchase more space as you need it, but 5TB is a LOT of storage space!
If OneDrive is installed on your computer, you will see a blue cloud in the taskbar (lower right of your screen, cell phones are different).The white cloud is a disconnected OneDrive. A second blue cloud indicates another account (you can be linked to multiple OneDrive accounts).
So let’s explore how to use OneDrive.
Installing OneDrive
If you do not see the blue cloud in your taskbar, you have several methods to install it as follows:
1. Install from your Start menu (if you have Office installed).
2. Install from Office.com (blue install button – again if you have a license for Office).
3. Purchase and install it from Microsoft.
One trick to install it if it does not appear in the Start menu, is to go directly to the OneDriveSetup.exe file found in C:\Program Files (x86)\Microsoft\OneDrive (or C:\Program Files (x86)\Microsoft OneDrive).
When OneDrive client is installed for the first time, it will prompt to login using your Office 365 account and the location on your machine where you want to keep your OneDrive Files synchronized. Once logged in, it will start synchronizing all files within that folder with your OneDrive Site immediately. Your login should be the same as you log into your PC with. It will ask Work or Personal/School account. Make sure you use your work account to get the 1TB because choosing School or Personal will give you the 5GB account.
The feature discussed in this article applies to Personal OneDrive storage as well using Microsoft accounts like hotmail.com or outlook.com
You would see a green icon with your Files/Folders to highlight that the synchronization has been completed as shown below.
So, all good. You can open these files now from any other device including OneDrive App on Mobile and read/update the content. You can also set up the OneDrive sync on any other machine have the entire content replicated there. Works like a charm. You can download your Office files including the OneDrive icon to 5 devices – laptop, smart phone, tablet, etc.
Know that you can also access your OneDrive files from ANY device via the internet by logging into Office.com. You can also use online versions of Word, Excel, etc. in that portal.
Syncing Files
Now you can drag and drop files into either your C drive synced directory or directly in to OneDrive via the browser. 
There is a difference! Dropping them into the C drive will cause them to sync in both locations, using up precious C drive space. Whereas dropping them in the cloud via the browser, they will not sync.
Of course, you can go in to Settings (see image to access the menu) and choose which files to sync while noting the remaining space on C drive as you select\deselect files.
The blue cloud will display circling white arrows during the sync. This might take some time.
depending on the scope of the content being synced and your internet speed (I have seen it last for 2-3 days!).
If there is a problem (often indicated by a red x), you can Quit OneDrive and relaunch it. Like everything Microsoft, a reboot often fixes problems.
To view status, left click on the blue cloud and current status or latest actions will appear along with a menu (triple vertical dots). Right clicking on the cloud brings up the menu as well. Here you can view problems (and suggestions to rectify them), launch the browser or Explorer view of the OneDrive library, and bring up Settings.
With Settings, you can unlink the account and set it up again (if you want another account, or change the location on your local drive, etc.). Do not worry, unlinking does not lose the OneDrive files. You can also choose which folders to sync (not individual files). You can also view your account, available storage space, and remaining C (or local) drive space.
Other choices are Manage Storage in OneDrive (via the browser), get help, report a problem, and pause syncing (you might do this during a webinar that uses a lot of bandwidth to avoid buffering).
As mentioned above, there are other offerings for cell phone plans and promotions. Other flavors of OneDrive can be found in the Live plans for OneDrive and Office 365 through the Live program https://onedrive.live.com/about/en-US/plans/.
Now you can access local copies of your synced files whether you are online or not. They will sync the next time you connect to the internet. If you are sharing files and someone else updates them, the sync will merge the changes. If there is a conflict, the file owner (creator) will be notified and given options to deal with the conflicts (overwrite, keep both, etc.).
Once files are synced, you will immediately notice that the Status column for your local OneDrive directory now shows a number of different icons.
What do these different icons mean?
Cloud Icon: It means the File/Folder is Online only and is NOT taking any space on the client machine.
Green Circle with Green check mark: It means the online only file was opened and hence has a local copy available and will take the disk space on client machine. If a folder is marked with this icon, that means new files/folders created from another synced device or directly using OneDrive web interface within that folder will appear as cloud only files/folders.
Filled Green Circle with White check mark: It means the file/folder always has a local copy available and will take the disk space on client machine. If a folder is marked with this icon, that means new files/folders created either from another synced device or directly using OneDrive web interface within that folder will always be downloaded locally.
So Are there any Problems?
If all works so well, is there anything to worry about? Actually yes – Storage requirement on your client machines! Even though your OneDrive site can handle as much as 10TB of content, we need to wait for some time to get that kind of storage in-built in our laptops/desktops.
Some organizations have been really innovative about OneDrive usage and are even using that as a backup solution. Consider this scenario – configure the entire users folder (c:\users\) as the OneDrive Sync location. Now, everything you do on your machine (desktop, documents etc.) everything will be synced to OneDrive. When you delete a file, it will go to OneDrive site’s recycle bin and will stay there for up to 93 days, even if you delete from your local recycle bin also.
It’s a little tricky to get this scenario implemented though, as OneDrive will create its own folder named OneDrive inside your user folder. But that’s a story for some other article.
So, you got the idea. As the usage of OneDrive site grows with Onedrive for business sites and may be multiple SharePoint team sites, you can see your system’s disk space running out in a few months.
What can we do about it
Well, it’s as simple as click on a button, literally I am talking about the feature “Files on Demand” of OneDrive Client.
OneDrive Files On-Demand feature requires Windows 10 version 16299.15 or later and OneDrive build 17.3.7064.1005 or later. You can latest version of OneDrive client download from here.
Enable Files on Demand
This feature is available under Settings tab. Right click your OneDrive client icon and click on Settings and then click on Settings tab.
This option is NOT enabled by default. So, all synced files will be downloaded on the client machine and take disk space locally.
Let’s go ahead and click this checkbox and click OK.
When you click OK, your OneDrive client settings dialog box will be closed.
This setting is unique per device. So, if you are syncing the same OneDrive location with multiple machines, you need to do this setting in all those machines separately.
OneDrive Synced Folder
Let’s now take a look at what happens to already synced files and folders when “Files on Demand” option is selected in OneDrive client. Right click your OneDrive client icon and open the synced folder.
As noted previously, you can now see your synced files and the Status icons in your local drive.
Keep Files Locally
When an online only file is opened, it’s downloaded automatically and the status icon changes to “Green Circle with Green check mark“. Now, if you want to keep this file/folder locally always, just right click that file/folder and select “Always keep on this device”.
You will see the file/folder icon will change Green Circle with White check mark” within a few seconds/minutes depending upon the size.to “Filled G”
If you want to see how much space synced files/folders are using on your local disk, just check the properties. As in this case, you can see, it’s using 100 KB on disk.
Keep Files Online Only
This was the main topic of this article, so here we go
You can selectively pick and choose which files/folders you want to keep Online only. Like files on which you work frequently make sense to keep locally, otherwise it will be downloaded next time you open that.
For online only files, you will still get the information about last modified and windows search on file name. It works like a shortcut to online files, just a bit better.
So, to make any files/folders online only, just right click on that and select “Clear Space“.
You can see, it will immediately start cleaning up space from your local disk by removing the content of those files/folders. You would see a sync icon during this
process.
After a few seconds/minutes, you can see that the file/folder has been changed as Online Only.
Now, let’s just a quick look what happened on local disk. You would see, the Size on disk now appears as 0 bytes 
It is also possible to have a folder online only and some files inside that folder configured as “Always keep on this device”
And that’s it. You will still see all the files and folders in your File Explorer but now it will consume a lot less space on your local disk.
Rob Moses is owner and Senior Consultant of Caladan Consulting, Inc. He writes on a variety of subjects including Office 365, SharePoint, cloud computing, and telecommuting. He resides in Winchester, VA where he runs a small ranch for his other hobby, animal rescue.