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Microsoft has scaled up the limits for Public Folders in Office 365. Now, the folder count limit is capped at 100,000 folders -- a 10x increase over the previous limit. This is simply the first round in the public folder scale improvements that Microsoft is working to deliver with Exchange Server 2013 to receive it next.
"We have made investments to scale up the limits for Public Folders in Office 365. Today we are raising the folder count limit to 100,000 folders. This is a 10x increase over the prior limit as defined in the Exchange service description limits. This enables migration of larger existing public folder hierarchies and increased use of the feature in Office 365. Customers can immediately take advantage of this new scale for public folders," Microsoft stated in an official blog post.
With this increase, the number of public folder mailboxes and the total public folder quota remain unchanged. The folder count limit has been increased for all Exchange Online users with public folders. Exchange Server 2013 will receive this increase in cumulative update 6.
via:Office Blog (http://blogs.office.com/2014/07/15/10x-increase-in-public-folder-limits/)