Carve-Out Microsoft 365 Tenant Migration

Workload acceptance criteria before TSA exit

TSA exit is signed off workload by workload. Each row has a test that must pass in the destination tenant, and a constraint that applies while the parent and destination tenants run side by side. Which rows apply depends on the deal's carve-out scope.

Exit gate: parent access is revoked on an agreed date only after every in-scope workload passes. The same gate logic for the buyer side is in the M&A Day-1 five-gate model, and the separation sequence is in the divestiture and carve-out runbook.

Frequently Asked Questions

Which Microsoft tools move data in a carve-out?

Cross-tenant mailbox migration and cross-tenant OneDrive migration, both covered by a one-time Cross Tenant User Data Migration license per user, and cross-tenant SharePoint site migration, licensed per 100 GB moved and currently for Enterprise Agreement customers only. OneDrive and SharePoint moves are one and done with no delta passes, and Microsoft Entra cross-tenant synchronization is not a migration tool (Microsoft Learn, accessed 2026-11-07).

What is a carve-out Microsoft 365 tenant migration?

A carve-out Microsoft 365 tenant migration is a divestiture from a parent tenant into a new standalone destination tenant. It applies when a business unit is being spun off, sold to a third party, taken private, or otherwise separated from the parent organization. Unlike a consolidation migration, the carve-out requires building a complete standalone Microsoft 365 environment in 60-120 days while preserving compliance posture and meeting TSA expiration deadlines.

How does EPC Group handle TSA expiration timelines for carve-out scenarios?

Transition Services Agreements (TSAs) define how long the divested entity can keep using the parent's Microsoft 365 tenant after deal close. TSA expiration dates are non-negotiable. EPC Group runs pre-close diligence in parallel with deal-team work so Day-1 readiness lands before the TSA window closes. Typical carve-out execution is 60-120 days. Pre-close diligence support is available 30-45 days in advance when needed.

What happens to shared content between the parent and the divested business unit?

Shared content is categorized during the Separate phase into three buckets: content that moves with the carve-out (owned data, customer records, IP), content that stays with the parent (corporate functions, non-divested business records), and dual-residency content (governance documents, HR records under legal retention). Each category has a different extraction methodology. The Tooling Decision Record names AvePoint Fly, ShareGate, or Quest as the extraction engine based on permission fidelity needs.

How is identity de-provisioning handled in a carve-out?

Identity isolation runs across four layers: Active Directory accounts are exported and stood up in the new destination Entra ID tenant, group memberships are scoped to carve-out users only, license SKUs are reclaimed from the parent and assigned in the new tenant, and Conditional Access policies are rebuilt with carve-out-specific named locations and device trust. Cross-tenant access is permitted only during the cutover window. Final de-provisioning from the parent happens at TSA exit, not before.

How does EPC Group preserve compliance posture during a carve-out?

The Diligence phase establishes the regulatory baseline appropriate to the divested entity — HIPAA, FedRAMP, SOC 2, FINRA, CMMC, or GxP. Microsoft Purview sensitivity labels, retention policies, eDiscovery configuration, and Microsoft Defender alerting are rebuilt in the destination tenant before content lands. Compliance is re-validated at cutover. Named artifacts produced during the migration form the audit trail used by the divested entity's compliance team post-carve-out.

What Microsoft 365 workloads are migrated during a carve-out?

All Microsoft 365 workloads: Exchange Online, OneDrive for Business, SharePoint Online, Microsoft Teams (including private channels, shared channels, and Planner data), Power BI (workspaces, datasets, semantic models), Power Platform (Power Apps, Power Automate, Power Pages, Copilot Studio), Microsoft Purview (sensitivity labels, retention, eDiscovery), Microsoft Entra ID, Microsoft Defender, Microsoft Intune, Microsoft Viva, and Microsoft Copilot deployment readiness.

How long does a typical carve-out migration take?

Standard carve-out execution is 60-120 days from kickoff to TSA exit. Mid-market carve-outs (1,000-5,000 users) typically land at 60-90 days. Enterprise carve-outs (5,000-25,000+ users) typically land at 90-120 days. Cutover execution within that window averages 5 days. Pre-close compressed engagements can deliver Day-1 readiness in 30-45 days when EPC Group is engaged during diligence.

What is the pricing model for carve-out engagements?

Fixed-fee Statements of Work scoped during the Diligence phase. Pricing depends on user count, workload mix, identity complexity, tooling stack, and TSA timeline. Mid-market carve-outs are scoped and priced after discovery. Enterprise carve-outs are scoped and priced after discovery. Post-carve-out Managed Microsoft Cloud and Analytics retainers are scoped and priced after discovery per month for the new standalone entity.

Can EPC Group support pre-close carve-out diligence?

Yes. Pre-close diligence support is one of the most common engagement entry points. The deal team brings EPC Group in 30-45 days before close to deliver source tenant audit, carve-out scope definition, identity isolation plan, TSA exit plan, and Day-1 readiness gap analysis. Parallel workstreams mean execution can start the day after close instead of starting from a cold-state inventory exercise.

How do I start a carve-out Microsoft 365 migration engagement?

Schedule a discovery call at epcgroup.net/schedule, email contact@epcgroup.net, or call (888) 381-9725. Pre-close engagements are supported — EPC Group can be brought in during diligence to support the deal team. After the discovery call, a scoped Statement of Work is delivered naming the senior architect, the playbook phase plan, the tooling decision, and the fixed-fee anchor.