File versioning is a feature offered by Microsoft Sharepoint online or OneDrive, that enables to save new copies of a document when users make changes. This allows users to manage the different revisions within a file and go back to an earlier version if necessary.
Even a minor change, like adding a comma, creates a new version. And each version of a document is deducted from the available quota of the SharePoint site and, therefore, from the tenant's overall quota.

Example of a document with several versions and size
Files like PowerPoint presentations or Excel files, which sometimes contain hundreds of versions, take up a lot of storage space:
→ For example, it is not uncommon for PowerPoints from our clients to have a size of 100MB with more than 100 versions, giving a total size of more than 10GB.
The versions therefore impact the size of the files and the available storage space.
Consequently, it is important to manage automatic file versioning, to pay attention to file size and clean old versions - not to keep all of them in order to optimise storage space. There are also options to reduce file size, such as compressing images, removing hidden data or converting to PDF format (note that these are manual actions and are not automated in Microsoft services).