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Differences Between SharePoint On-Premise and SharePoint Online

cloud files

A Comprehensive Guide for IT Professionals

So, you’re knee-deep in the world of Microsoft SharePoint, huh? If you’re an IT professional, you’re well aware that SharePoint is no longer just a “nice-to-have” but more of a “must-have.” You’ve got two flavors to choose from: SharePoint On-Premise and SharePoint Online. Which one is the right fit for your organization? Buckle up, because we’re about to dive deep into the nitty-gritty differences, pros, cons, and everything in between.

What is SharePoint On-Premise?

Let’s kick off with SharePoint On-Premise, the granddaddy of SharePoint solutions. Developed by Microsoft, it’s a platform that allows organizations to create websites for information sharing, document management, and collaboration. This version has been around since 2001, evolving through various updates and versions. What sets it apart is that it’s hosted on your own servers, giving you complete control over the infrastructure and data. Imagine it as a treasure chest that you keep in your own fortress, surrounded by moats and guarded by knights.

What is SharePoint Online?

Moving on to SharePoint Online, this version is the newer kid on the block but has been making waves since its inception. It’s part of the larger Office 365 suite, providing similar functionalities but on a cloud-based platform. Think of it like a treasure chest too, but this time it’s in a highly secure vault that you rent from a reputable bank. You don’t have to worry about the knights and moats; the bank takes care of that for you.

Cloud Storage Manager Overview Tab
Cloud Storage Manager Overview Tab

Functionality Comparison

When it comes to functionality, both versions have a lot to offer but in slightly different ways.

  • Content Management: SharePoint On-Premise provides robust content management features, but it often requires more hands-on management. SharePoint Online, on the other hand, offers more streamlined content management that is easier to navigate but may have limitations in terms of custom workflows.
  • Collaboration: Both platforms excel in facilitating collaboration but differ in their approaches. SharePoint On-Premise often requires additional configuration to enable real-time collaboration, whereas SharePoint Online offers this out-of-the-box.
  • Document Management: SharePoint Online gains a slight edge here, thanks to its seamless integration with other Office 365 apps. SharePoint On-Premise offers robust document management but may require third-party solutions for advanced features.


If customization is your game, SharePoint On-Premise is your playground. It offers extensive customization options, allowing you to tailor the platform to your organization’s specific needs. SharePoint Online, while still customizable, has limitations due to its cloud-based nature. It’s like comparing a customizable robot toy where you can change every part (On-Premise) to one where you can only swap out the arms and legs (Online).


In the realm of security, both versions have their merits and pitfalls.

  • Physical Security: With SharePoint On-Premise, the physical security of the servers is entirely in your hands. For SharePoint Online, Microsoft takes responsibility for the physical security.
  • Data Security: SharePoint Online benefits from Microsoft’s extensive security measures but does open up the possibility of data being accessed through the cloud. SharePoint On-Premise allows you complete control over your data, but the responsibility for securing it falls squarely on your shoulders.
  • Compliance: Both versions offer compliance features, but SharePoint On-Premise provides more control over compliance settings, while SharePoint Online has built-in features that are generally easier to manage.


Ah, the money talk. SharePoint On-Premise requires an upfront investment in hardware and licenses, and don’t forget the ongoing maintenance costs. SharePoint Online, being a subscription-based service, might seem more affordable initially but can add up over time. It’s akin to buying a car versus leasing one; both have their financial pros and cons.


Speed and reliability are crucial, aren’t they? SharePoint On-Premise performance is highly dependent on your organization’s hardware and network capabilities. SharePoint Online’s performance is generally good but can be affected by internet connectivity. It’s like having a sports car that can only reach its top speed on a perfect racetrack (On-Premise) versus a reliable sedan that occasionally gets stuck in traffic (Online).


When it comes to scaling up or down, SharePoint Online takes the cake. Its cloud-based nature allows for easy scalability, often with just a few clicks. SharePoint On-Premise, while scalable, requires a more hands-on approach, involving hardware and software considerations. Think of it as inflating a balloon (Online) versus constructing a building block by block (On-Premise).

Cloud Storage Manager Map View
Cloud Storage Manager Map View

Pros and Cons

Alright, let’s lay it all out:

  • SharePoint On-Premise
    • Pros: Greater control, extensive customization, robust security options.
    • Cons: Higher upfront costs, requires in-house IT expertise, limited scalability.
  • SharePoint Online
    • Pros: Lower initial cost, easy scalability, seamless integration with Office 365.
    • Cons: Limited customization, potential security concerns, dependency on internet connectivity.

Technical Requirements

For the tech-savvy among us, SharePoint On-Premise requires substantial hardware and software requirements, including servers, storage, and networking equipment. SharePoint Online pretty much just needs a solid internet connection and a subscription to Office 365. It’s the difference between assembling a computer from scratch (On-Premise) and buying a pre-built laptop (Online).

User Experience

In terms of user experience, SharePoint Online offers a more modern and intuitive interface, thanks in part to its integration with other Office 365 apps. SharePoint On-Premise, while powerful, can feel a bit dated and may require more training for users. It’s like using a smartphone with the latest OS updates (Online) versus a feature phone that does the job but lacks the bells and whistles (On-Premise).

Updates and Maintenance

One of the most significant differences lies in updates and maintenance. SharePoint Online is regularly updated by Microsoft, with little to no effort required on your part. SharePoint On-Premise updates are a whole different ballgame, often requiring planned downtime and manual installation. It’s the difference between a car that self-updates its software overnight (Online) and one that needs to be taken into the shop (On-Premise).

Common Misconceptions

Before we wrap up, let’s bust some myths.

  • SharePoint On-Premise is Outdated: Just because it’s older doesn’t mean it’s obsolete. It’s continually updated and remains a robust solution for many organizations.
  • SharePoint Online is Less Secure: While it’s true that the data is stored in the cloud, Microsoft’s security measures are top-notch, making it a secure option for many businesses.
Cloud Storage Manager Reports Tab
Cloud Storage Manager Reports Tab

Direct Comparison Table

To make it easier for you to weigh your options, here’s a side-by-side comparison of SharePoint On-Premise and SharePoint Online across several key factors:

FactorsSharePoint On-PremiseSharePoint Online
HostingOn your own serversCloud-based
Content ManagementRequires hands-on managementStreamlined, easier to navigate
CollaborationRequires additional configurationReal-time, out-of-the-box
Document ManagementRobust, may require third-party solutionsSeamless integration with Office 365
SecurityPhysical and data security in your controlManaged by Microsoft
CostUpfront investment, ongoing maintenanceSubscription-based
PerformanceDepends on your hardware and networkCan be affected by internet speed
ScalabilityRequires hands-on approachEasy to scale up or down
UpdatesManual, may require downtimeAutomatically updated

Now that you’ve seen the factors laid out, it should be easier to make an informed choice based on your specific requirements.


Choosing between SharePoint On-Premise and SharePoint Online is no small feat, especially for IT professionals tasked with making the right decision. Both platforms offer a rich set of features, but they differ in key areas like customization, security, cost, and scalability. Understanding these differences is crucial for selecting the version that aligns with your organization’s needs and goals. So, what’s it going to be? Your own fortress or a secure vault?


  1. Is SharePoint On-Premise better than SharePoint Online?
    • There’s no one-size-fits-all answer. It depends on your organization’s specific needs and requirements.
  2. Can I migrate from SharePoint On-Premise to SharePoint Online?
    • Yes, migration is possible, but it requires careful planning and execution.
  3. Do both versions support mobile access?
    • SharePoint Online offers better mobile accessibility, but SharePoint On-Premise can also be configured for mobile access.
  4. What are the hardware requirements for SharePoint On-Premise?
    • Requirements can vary but generally include servers, storage, and networking equipment.
  5. Is SharePoint Online included in all Office 365 subscriptions?
    • Not all Office 365 subscriptions include SharePoint Online, so it’s essential to check the specific plan details.

And there you have it! I hope this comprehensive guide helps you navigate the labyrinthine world of SharePoint. Feel free to reach out if you have more questions or need further clarification.