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One of my users has a 5MB documents with 64 versions. This seems a little excessive and I can easily trim it to x number but I wanted to know for my own benefit, are there any real implications for a having a large number of versions for a document?

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Upto maximum of 400,000 Major versions supported for a single file as per Microsoft documentation

However, size is what matters most! At the moment, the default maximum file size is 50 MB but it can be increased up to 2 GB. However a large volume of very large files can affect farm performance (see the chart below). But, for the scenarios where files (unstructured) data is 1 MB or larger and fast read access is desired then you may plan to use the Remote Blog storage.

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Storage space. It's a good practice to use site quotas to manage growth. When you have versioning and don't have limits, each version adds additional storage as Sharepoint is making a copy of the original. In one document library, I had seen a file with 197 versions with no finite limit set. this one small file accounted for nearly 500 MB against the site quota.

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Size. That one 5MB file is taking up 320MB + (metadata x 64). It can potentially consume a lot of space if that happens several times. If your databases get too large, then it gets more difficult to manage from the back end (backups take longer, restores take longer, have to consider moving DBs to new disk drives as space runs out).

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In SharePoint 2010 and earlier, each version increases the storage used on the database by the amount of the file size whether the file is changed or not.

It's worth pointing out that Microsoft identifies this as a shortcoming in SharePoint versions previous to the recently released SharePoint 2013. In SharePoint 2013, new technology being dubbed Shredded Storage is touted as overcoming this document version file size explosion. Only differences should be stored with new document versions in the new product when Shredded Storage is enabled (the default on-premises.)

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