SharePoint Server vs. SharePoint Online: Which Version is Best for Your Business?

Microsoft SharePoint is a collaboration system for the workplace. It enables workgroups to manage, store, and organize data and documents in a central location, facilitating ease of communication between employees and different workgroups.

The collaborative structure of SharePoint offers enhanced security features when sharing data across a firm’s network. The system closely manages access and permissions to documents and data for different user groups. SharePoint is very flexible and can be configured in many different ways, offering companies a wide range of practical uses.

Sharepoint History

SharePoint Server is the original version of SharePoint, first released in 2001. Many businesses consider this in-house server-based platform — along with its ability to integrate seamlessly with Office 365 (O365) — indispensable to their operations.

In 2011, Microsoft began offering clients the cloud-based SharePoint Online, which freed companies from having to physically host the necessary servers to run SharePoint on-site. With SharePoint Online, organizations could migrate their data to the cloud if they decided it was a better document sharing option.

Sharepoint Comparison

Let’s take a quick look at some of the advantages and disadvantages of SharePoint Server and SharePoint Online. Determining which version is right for your business comes down to a variety of factors and the kind of operation you run.

SharePoint Server

If running SharePoint on-site, your company will have to invest in servers and the associated hardware (no cloud storage), as well as trained personnel able to operate and update the servers as needed.

Advantages:

Some of the advantages of using SharePoint Server include the ability to implement direct control over your security protocols. Since you’re not relying on the cloud, local system administrators have more freedom and flexibility in the security arena.

SharePoint Server will also give you the option of increasing the reach of your locally-housed platform once you’ve purchased the necessary Server and Client Access licenses. You’ll only have to purchase these licenses once. Increased capability is then only linked to the limitations of your hardware — and you can always upgrade or buy more servers.

Disadvantages:

Running and maintaining a server farm can be a costly endeavor. And while on-premise servers give your administrators (on-site or outsourced) greater autonomy and security controls, it also weighs them down with more responsibilities should something go wrong when upgrading or expanding the system.

SharePoint Online

SharePoint Online, Microsoft’s cloud-based sharing platform, is usually included with most O365 subscriptions, although a separate, independent subscription can be purchased as well.

Advantages:

Companies that rely upon SharePoint Online won’t have to invest in a server farm or the staff, hardware, and upgrades required to run these servers. Security and updates (like SharePoint Server 2019) are all managed by Microsoft. SharePoint Online also gives your workgroups the option to integrate with Microsoft Teams, enabling staff to share documents directly from chat windows.

Furthermore, the cloud-based subscription version of SharePoint seamlessly integrates with O365 software, and you’ll only have to buy licenses for intended users, not the entire company.

Disadvantages:

SharePoint Online comes with several different subscription models, which can add up in costs over time; thus surpassing the one-time licensing fees of SharePoint Server. Another disadvantage is giving up complete control over your documents and data. Your sensitive documents aren’t stored in-house, which security-minded people might find disconcerting.

Each SharePoint Online subscription comes with a restricted amount of data storage, whereas SharePoint data storage, hosted on-site, is only limited by your hardware — and, as previously stated, you can always buy more servers.

Which Version is Best for You?

Smaller to mid-size businesses that don’t want to invest in the infrastructure and services required to manage a server farm would probably benefit more from choosing one of the SharePoint Online subscription options.

Businesses that have already invested in servers, work with extremely sensitive data, are concerned about security, or just don’t wish to migrate their documents to SharePoint Online, might want to choose (or stick with) the on-premise version of SharePoint.

Initial costs may also influence which version of SharePoint is right for your business. SharePoint Online is simple and inexpensive to implement, although subscription fees can add up over time. SharePoint Server requires a more substantial initial investment, but if the servers are well-managed, that investment will be reciprocated over time.