SharePoint Online vs On Premise: Key Differences and Considerations

As a premier SharePoint Consultant across many industries, we at Abel Solutions provide services to clients that use SharePoint Online, SharePoint On Prem, or a hybrid.

SharePoint is a widely used document management and collaboration tool developed by Microsoft. As you might be aware, there are two deployment options available: SharePoint Online and SharePoint On-Premises. Choosing the right version for your organization depends on various factors, such as your organization’s specific requirements, infrastructure, and budget constraints.

SharePoint On-Premises is a traditional on-site solution that requires dedicated server space and in-house maintenance by an IT team. In contrast, SharePoint Online is a cloud-based service, offered as part of Microsoft 365 subscriptions, that eliminates the need for server space and on-site maintenance. Both options have their own set of features, functionalities, and distinct advantages and disadvantages to consider.

Key Takeaways

• SharePoint Online is a cloud-based service, while SharePoint On-Premises needs dedicated server space.
• Key factors to consider include infrastructure, security, customization, and cost.
• Hybrid options for SharePoint can provide a flexible mix of on-premises and online features.

Understanding SharePoint: On-Premises Vs Online

When comparing SharePoint On-Premises and SharePoint Online, it’s important to understand the key differences between these two platforms to determine which fits your business requirements. Let’s dive into some of the main distinctions you should consider when choosing between On-Premises and Online SharePoint solutions.

One major difference between the two platforms is the infrastructure setup. SharePoint On-Premises requires you to have your own servers and an IT team to maintain them, as well as handle updates and patches. This necessitates additional resources and hardware. On the other hand, SharePoint Online is a cloud-based service offered within Microsoft 365 subscriptions, so there’s no need to worry about managing your own servers or performing maintenance tasks.

Data storage capabilities also differ between these two SharePoint solutions. SharePoint On-Premises allows for unlimited data storage depending on your server capacity, while SharePoint Online has storage limits based on your subscription plan. This means that, depending on your organization’s needs, one platform may offer a more suitable data storage solution than the other.

Another aspect to consider is the licensing requirements. Some web applications that work with SharePoint necessitate exclusive licenses for SharePoint On-Premises, whereas you won’t need additional licenses with SharePoint Online. This can impact the overall cost and convenience of the platform you choose.

Finally, it’s also worth noting the differences in system requirements, security, and payment models between SharePoint On-Premises and SharePoint Online. SharePoint 2019, which is an on-premises software, has distinct system requirements and security measures compared to its cloud-based counterpart. SharePoint Online is a more flexible solution, as it’s available through Microsoft 365 subscriptions, which come with their own advantages and pricing structures.

In summary, understanding the differences between SharePoint On-Premises and SharePoint Online is crucial in making the right choice for your organization. When making your decision, consider factors such as infrastructure, data storage capabilities, licensing requirements, system requirements, security, and payment models. By doing so, you’ll be better equipped to select a SharePoint solution that aligns with your organization’s needs and goals.

Features and Functionalities

When comparing SharePoint Online and SharePoint On-Premise, it’s important to consider the features and functionalities they each offer. For both platforms, you’ll find robust content management, collaboration, and user interface options. However, there are differences between the two that may make one a more suitable choice for your organization.

SharePoint Online, being a part of Microsoft 365, benefits from seamless integration with other Microsoft tools, such as Teams, Power Automate, Power Apps, and more. This integration can greatly improve your organization’s collaboration workflows and overall productivity. In contrast, SharePoint On-Premise may require additional configuration and third-party tools to achieve the same level of integration.

In terms of content management, SharePoint Online offers a more straightforward and user-friendly interface. This means that even non-technical users can handle tasks like creating and editing pages, managing lists, and setting up document libraries with ease. On the other hand, SharePoint On-Premise may require a deeper understanding of SharePoint’s architecture and terminology to perform certain tasks.

The flexibility of SharePoint solutions is another area where the two platforms differ. SharePoint Online provides regular updates, new features, and patches to its users without any effort on their part. This means that your organization can benefit from the latest offerings without needing to perform manual updates. However, this might also lead to some occasional unwanted changes or complexities. In contrast, SharePoint On-Premise grants you more control over your environment, allowing you to decide when updates and patches are applied, and tailor your SharePoint farm to your organization’s specific needs.

As you consider these aspects, it’s essential to evaluate your organization’s needs and resources. For smaller companies or those without dedicated IT staff, SharePoint Online may be a more accessible solution. On the other hand, larger organizations with established IT infrastructure may find the flexibility and control offered by SharePoint On-Premise more appealing. By considering the features and functionalities that matter most to your organization, you can make the most informed decision possible.

Infrastructure, Deployment, and Control

When it comes to infrastructure, there is a significant difference between SharePoint On-Premise and SharePoint Online. For On-Premise, you need to set up and maintain your own hardware and server infrastructure, including a local network, data center, and servers. This means you’re responsible for the hardware and software updates, as well as ensuring that your systems are running smoothly.

On the other hand, SharePoint Online is a cloud-based service. This means that your infrastructure is managed by Microsoft, and you don’t need to worry about maintaining your own servers or data centers. The advantage here is that you can focus on the actual content and usage of your SharePoint environment without worrying about the underlying infrastructure.

Deployment of SharePoint On-Premise can be more complex, as it requires the installation and configuration of software on your own servers. This might involve some technical expertise, and potentially additional time and resources when it comes to planning and deploying your SharePoint environment. In contrast, SharePoint Online deployment is much simpler, as it only requires you to sign up for a plan and follow a straightforward setup process.

Control is another essential factor when discussing SharePoint On-Premise and SharePoint Online. With an On-Premise solution, you have full control over your environment. You can customize and configure it to meet your specific needs, and you have complete visibility and access to the underlying server systems. This can be particularly desirable if your organization requires strict compliance or has specific security needs. However, with full control comes the responsibility of managing everything, which may involve significant time and effort on the part of your IT team.

SharePoint Online, being a cloud-based solution, does not offer the same level of control as an On-Premise solution. However, Microsoft handles the security, compliance, and availability for SharePoint Online, thereby reducing the burden on your IT team. This allows you to focus on using SharePoint to enhance your business processes, but it also means you may have to accept some limitations in terms of control and customization.

In summary, when deciding between SharePoint On-Premise and SharePoint Online, you should consider the infrastructure, deployment, and control aspects of each option. Assess your specific organizational requirements and weigh the benefits and drawbacks of each solution to determine which one best suits your needs.

Security and Compliance

When comparing SharePoint Online and SharePoint on-premises, it’s crucial to consider the differences in security and compliance features they offer. As you manage your organization’s data, choosing the right platform is essential to ensure both information and data security.

SharePoint Online, being a part of the Microsoft cloud ecosystem, benefits from the continuous investments Microsoft makes in security, compliance, and privacy. You’ll find robust security and compliance controls in SharePoint Online, which helps your organization adhere to compliance standards. Features such as Multi-factor Authentication (MFA) for user authentication contribute to protecting your content in the cloud.

In contrast, with SharePoint on-premises, the responsibility for securing the server environment and ensuring compliance rests with your organization. You’ll need to dedicate resources to staying current with industry best practices and maintaining the necessary server infrastructure. Implementing security features and tools, like encryption or user authentication, requires expertise and can incur additional costs.

When it comes to protecting sensitive data and meeting regulatory requirements, SharePoint Online offers data lifecycle management capabilities with Microsoft Purview. This feature allows you to govern your SharePoint content for compliance and adhere to regulation policies.

For organizations with highly regulated industries or strict compliance requirements, both SharePoint Online and on-premises solutions provide features to meet these needs. However, SharePoint Online benefits from Microsoft’s continuous investments in security while offloading many of the infrastructure and maintenance responsibilities from your organization.

Customization Possibilities

When comparing SharePoint Online and SharePoint On-Premises, it’s important to consider the customization possibilities each option offers. Understanding the differences in customization capabilities can help you make an informed decision about which solution best fits your organizational needs.

With SharePoint Online, customizations are more limited compared to its On-Premises counterpart. This restriction is mainly due to the fact that SharePoint Online is a cloud-based service managed by Microsoft, which means certain aspects are controlled by the provider to ensure consistency and security across all tenants. However, there are still plenty of ways to tailor SharePoint Online to meet your specific requirements. You can customize branding elements, create and configure web parts, and leverage SharePoint Designer for workflows, among other things.

On the other hand, SharePoint On-Premises offers a broader range of customization options. Since this version is hosted and managed within your own infrastructure, you have more direct control over the environment, allowing for unlimited customizations. This means you can implement custom coding, develop extensive web parts, and deeply tailor the look and feel of your SharePoint environment to your organization’s needs.

While unlimited customizations can be a significant advantage for some organizations, it’s essential to consider the potential risks. Customizations, if not managed properly, can lead to increased complexity and potential security issues. Additionally, customizations might cause compatibility problems when upgrading to a new SharePoint version.

Overall, it’s crucial to weigh the customization possibilities against your specific business requirements and determine how much customization you actually need. Remember that SharePoint Online provides a robust set of out-of-the-box features and limited customizations, while SharePoint On-Premises offers greater flexibility and control at the cost of increased complexity and maintenance.

Data Management and Storage

When comparing SharePoint Online and SharePoint On-Premise, it’s crucial to understand how they manage and store data. With SharePoint Online, you can conveniently store your data in the cloud, while SharePoint On-Premise requires you to maintain your own server infrastructure for data storage.

In terms of data storage, SharePoint Online offers a scalable storage capacity that grows with your organization’s needs. This means you no longer have to worry about constantly managing and expanding your storage infrastructure, as the cloud automatically adjusts to accommodate your data size. Furthermore, by using the cloud, you can benefit from Microsoft’s enterprise-grade security measures and automatic backups, helping safeguard your data against loss or corruption.

On the other hand, SharePoint On-Premise provides more control over your data storage, as the information is stored within your organization’s servers. This allows you to manage your storage capacity more precisely, making sure it aligns with your organization’s requirements. However, you are also responsible for managing backups and implementing security measures to ensure data protection.

Regarding storage capacity, SharePoint Online comes with a default storage limit per organization, with the option to purchase additional storage if needed. SharePoint On-Premise storage capacity is determined by your server infrastructure and the resources allocated to it.

When it comes to backups, SharePoint Online includes built-in data backup and recovery features that protect your data from accidental deletion or corruption. Microsoft regularly creates backups of your data and provides tools for restoring lost or corrupted files. With SharePoint On-Premise, you are responsible for setting up and maintaining your backup and recovery systems.

In conclusion, the choice between SharePoint Online and SharePoint On-Premise for data management and storage depends on your organization’s priorities and resources. If you prefer a scalable, low-maintenance solution with built-in backups, SharePoint Online might be the right choice for you. However, if you require greater control over your data storage and the ability to tailor your infrastructure to your specific needs, SharePoint On-Premise can provide you with the necessary flexibility.

Pricing and Licensing

When comparing SharePoint Online and SharePoint On-Premise, it’s important to consider the differences in their pricing and licensing models. This will help you make an informed decision on which option is more suitable for your organization.

With SharePoint Online, you’ll generally find a subscription-based model, where you pay a recurring fee. One example is the SharePoint Online Plan 1, which costs $5.00 per user per month, with an annual commitment. This plan includes both OneDrive and SharePoint as part of the package, catering to small and medium-sized businesses.

On the other hand, SharePoint On-Premise involves purchasing licenses upfront for your servers and users. While this may require a larger initial investment compared to the subscription model of SharePoint Online, it can be appealing for organizations that prefer hosting their own infrastructure or have specific customization needs.

There are a few factors to consider when selecting the appropriate licensing option for your organization:

• Cost: Determine your budget and the long-term costs associated with each option. Subscription-based models tend to have lower initial costs but may be more expensive in the long run, while a one-time licensing fee can offer cost savings over time.
• Organization size: The size of your organization can play a role in which licensing model is most suitable. Larger organizations may benefit more from SharePoint On-Premise due to increased customization options and control over infrastructure, while smaller organizations might prefer the simplicity and ease of SharePoint Online.
• Feature requirements: Assess the features that are essential for your organization, and compare them between SharePoint Online and On-Premise. SharePoint Online tends to receive feature updates more frequently, while On-Premise versions may lag behind in the feature set.
• Security and compliance: Some organizations may require higher levels of security and compliance, which can impact their choice of licensing. SharePoint On-Premise offers more control over these aspects, while SharePoint Online relies on Microsoft’s security and compliance measures.

In conclusion, your choice of pricing and licensing will depend on the unique needs and preferences of your organization. Carefully weigh the benefits and drawbacks of each option to determine the best fit

Implementation and Maintenance

When it comes to implementation, SharePoint On-Premise requires you to install and manage a SharePoint farm, consisting of web front-end, SQL, and application servers. More servers might be needed if your organization requires additional redundancy in SQL and other SharePoint services. In contrast, SharePoint Online is a cloud-based solution that does not require the same level of infrastructure 1.

Maintaining an On-Premise SharePoint environment demands a dedicated IT team to handle server maintenance, updates, and patches. This involves more personnel, hardware, and overall cost for your organization 2. SharePoint Online, on the other hand, is maintained and updated by Microsoft, relieving you of these responsibilities and reducing the need for an extensive IT team.

Here are some key points to consider:

• Implementation: SharePoint On-Premise has a more complex setup with a SharePoint farm, while SharePoint Online is a cloud-based solution 3.
• IT Team Requirements: SharePoint On-Premise needs a dedicated IT team for maintenance, whereas SharePoint Online requires less in-house IT support 4.
• Updates and Patches: Your IT team must manage updates and patches for SharePoint On-Premise, whereas Microsoft handles them for SharePoint Online 5.

In summary, SharePoint On-Premise offers more control over your infrastructure but demands a higher level of commitment in terms of implementation and maintenance. SharePoint Online provides a more straightforward approach with less need for dedicated IT support, making it a more cost-effective solution for some organizations.

Footnotes

1. https://www.techtarget.com/searchcontentmanagement/tip/Compare-SharePoint-2019-vs-SharePoint-Online ↩
2. https://sharegate.com/blog/sharepoint-on-premises-vs-sharepoint-online ↩
3. https://www.intlock.com/blog/sharepoint-on-premise-vs-online/ ↩
4. https://www.systoolsgroup.com/updates/sharepoint-on-premise-vs-sharepoint-online/ ↩
5. https://www.zelitesolutions.com/sharepoint-online-vs-onpremise/ ↩

Cloud Vs On-Premises: Performance and Scalability

When comparing cloud and on-premises SharePoint solutions, you should consider factors such as performance, scalability, and speed to determine which option best fits your organization’s needs.

In terms of performance, cloud-based SharePoint Online generally offers better results as it has access to the latest updates and features from Microsoft. This means that you’ll benefit from improvements in speed, stability, and new capabilities without having to manage system updates yourself. Additionally, cloud providers often use powerful data centers with robust hardware, which further enhances the performance of your SharePoint environment. However, you also need to account for internet latency, which may impact your experience depending on your geographical location and internet connection.

On the other hand, with on-premises SharePoint, the performance relies heavily on your organization’s internal infrastructure and hardware. Upgrading your on-premises SharePoint might require significant investment in new server equipment and IT resources. Furthermore, managing updates and patches is your responsibility, potentially causing delays in accessing the latest features or improvements.

Regarding scalability, SharePoint Online has a clear advantage due to its pay-as-you-go, per-user pricing model and the ability to scale resources on-demand. This means you can easily add users and increase storage capacity as your organization grows1. With cloud solutions, there’s no need to procure, maintain, and manage additional server hardware or physical infrastructure to support your growth.

Conversely, on-premises SharePoint requires you to plan for capacity and growth by investing in additional hardware and IT staff to manage your expanding infrastructure. This approach can be costly and time-consuming, and your organization may experience downtime or performance issues during expansion.

To sum up, it’s essential to evaluate your organization’s performance and scalability requirements when deciding between cloud and on-premises SharePoint solutions. Carefully consider factors such as geographical location, IT resources, and potential growth before making a decision.

Footnotes

1. Intellias On-Premise vs Cloud: Pros and Cons + Cost Comparison ↩

Migration Process to SharePoint Online

Migrating from SharePoint on-premises to SharePoint Online can greatly enhance your organization’s collaborative capabilities and provide access to the latest features. The migration process requires careful planning and execution to ensure a smooth transition.

Before starting the migration, assess your current SharePoint environment. Identify essential content, customizations, and configurations that need to be migrated. Additionally, consider the overall size of the data and potential challenges that might arise during the process.

To help you with the migration, Microsoft provides the SharePoint Migration Tool (SPMT). It’s a free and easy-to-use solution designed to migrate content from on-premises SharePoint sites to Microsoft 365. This tool supports the migration of lists, libraries, and other content to SharePoint Online, while retaining metadata and permissions.

Consider these steps when using the SharePoint Migration Tool:

1. Install the SharePoint Migration Tool: Download and install the tool on a machine with access to your SharePoint on-premises environment.
2. Scan and assess your SharePoint site: Utilize a tool like the SharePoint Migration Assessment Tool (SMAT) to analyze your on-premises environment. It helps identify potential compatibility issues, providing insights that can guide you in making informed migration decisions.
3. Plan and execute the migration: Define the scope and priorities for your migration. Schedule tasks and manage the process in phases, starting with less-critical data to test and validate the migration results. Prioritize essential content to minimize downtime during the migration.

Remember that collaboration features, such as Microsoft Teams, work seamlessly with SharePoint Online and OneDrive. So, migrating to SharePoint Online not only gives your team the latest tools but also improves the overall teamwork experience.

By following these steps and using the appropriate tools, you can confidently and efficiently migrate your content from SharePoint on-premises to SharePoint Online, taking advantage of the latest collaboration and security features in Microsoft 365.

Exploring Hybrid Options

When considering the differences between SharePoint Online and SharePoint on-premises, you might find that a hybrid approach offers an attractive alternative. Hybrid options allow you to integrate your on-premises SharePoint Server environment with SharePoint in Microsoft 365, providing your users with a seamless experience when navigating between the two environments 1.

In a hybrid SharePoint deployment, you can link your on-premises SharePoint Server farm with Office 365. This enables you to take advantage of both platforms, offering flexibility and a staged migration path if you eventually plan to move all your operations to the cloud2.

There are various hybrid features available related to sites and search, which can help create a cohesive user experience3. For instance, the cloud hybrid search allows you to search results from both your on-premises and SharePoint Online environments simultaneously3.

Another important aspect of hybrid SharePoint deployments is redirection. Redirection is a technique that ensures when users try to access a service in SharePoint Server via site navigation, they are automatically redirected to the equivalent service in Microsoft 3654. This helps maintain user experience consistency across your SharePoint environment.

Hybrid SharePoint solutions are ideal for enterprises that want to gradually move their existing on-premises SharePoint Server services to the cloud5. By extending high-impact SharePoint workloads to SharePoint in Microsoft 365, you can enjoy the benefits of both platforms while having a staged migration process.

In summary, exploring hybrid SharePoint options enables you to find the perfect balance between SharePoint Online and SharePoint on-premises. By combining the strengths of both platforms, you can provide a consistent user experience and simplify your organization’s transition to the cloud.

Footnotes

1. (https://learn.microsoft.com/en-us/SharePoint/hybrid) ↩
2. (https://techcommunity.microsoft.com/t5/microsoft-sharepoint-blog/sharepoint-server-2019-hybrid-what-do-you-actually-get/ba-p/327320) ↩
3. (https://learn.microsoft.com/en-us/sharepoint/hybrid/explore-sharepoint-server-hybrid) ↩ ↩2
4. (https://learn.microsoft.com/en-us/sharepoint/hybrid/sharepoint-hybrid-sites-and-search) ↩
5. (https://learn.microsoft.com/en-us/sharepoint/hybrid/hybrid) ↩

Frequently Asked Questions

What are the main differences in features and functionality?

SharePoint Online is a cloud-based service included in Microsoft 365 subscriptions, while SharePoint On-Premises is software that you need to install and maintain on your own servers. There are some differences in feature availability between the two, such as modern site designs and some Office integration features being exclusive to SharePoint Online. On the other hand, SharePoint On-Premises offers more control over server configuration and customization options.

Which option is more cost-effective for various organization sizes?

For small and medium-sized organizations, SharePoint Online may be more cost-effective due to its subscription model, which can eliminate the need for expensive hardware and IT staff to maintain the server. Larger organizations, however, may find that SharePoint On-Premises provides better value in the long run if they have the resources and infrastructure to support it. It’s important to evaluate your organization’s specific needs and resources to determine which option is the most suitable for you.

What are the security and compliance differences?

SharePoint Online benefits from Microsoft’s global infrastructure and security measures, which include robust data protection and compliance capabilities. Additionally, security updates are automatically applied to the cloud service. With SharePoint On-Premises, you are responsible for applying security updates and ensuring compliance with your organization’s policies and industry regulations. This may require a dedicated team to manage your server environment.

How do customization options differ?

SharePoint On-Premises provides greater customization options, including full access to the server environment and the ability to make changes to SharePoint’s core code if necessary. This can be beneficial for organizations with specific requirements or unique customizations. SharePoint Online, while offering a wide range of customization options, does not allow access to the underlying server environment, which may limit the extent of customizations available to you.

Is there a difference in user experience and accessibility?

SharePoint Online tends to have a more modern user interface and is updated more frequently with new features, which can result in a better overall user experience. Additionally, being a cloud-based service, it offers improved accessibility and collaboration capabilities, allowing users to access content from anywhere with an internet connection. SharePoint On-Premises may not have all the latest features and improvements, but it can offer a stable, consistent experience for users who primarily access it from within your organization’s network.

What are the advantages and disadvantages of hybrid scenarios?

A hybrid SharePoint environment combines both SharePoint Online and On-Premises, offering some of the benefits of each while potentially mitigating certain drawbacks. This setup can provide flexibility in terms of where data is stored and how it is accessed, allowing organizations to maintain sensitive information on-premises while taking advantage of SharePoint Online’s collaboration and accessibility features. However, implementing and maintaining a hybrid environment can be complex, and users may face challenges when navigating between the two systems.