Is Microsoft storage and local disk storage different?

Hello, this is Emily.

No, they are not the same.

The storage you bought is cloud storage. The 1 TB of storage that comes with your Microsoft 365 Basic subscription is located on Microsoft's servers, accessible over the internet. You can use this space to store documents, photos, and other files, and access them from any device connected to the internet. It's not physically present on your computer.

There's no way you can make your local disk by adding cloud storage. You cannot install games or apps to the cloud storage either, they need to be installed on the local disk.

Also, I want to point out - the cloud drive is using sync technology - meaning - you cannot delete the files after you move them to the cloud drive. It will then delete on the cloud too and you will end up with data loss. However, what you can do is to turn on OnDemand feature for the files you store in the cloud. This way the local copies will be simply a link instead of the actual copies, so it can save room on the local disk and spare that room for other usage. To learn more about OnDemand, you can read about it here: https://support.microsoft.com/en-us/office/save...

The storage space included with a Microsoft 365 subscription is in your OneDrive on the internet.

Local storage means the hard drive in your computer.