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SharePoint Online vs. SharePoint On-Premises – Facts to Check

Himanshu Goyal
Himanshu Goyal Updated On - 25 Oct 2019

With large enterprises moving towards cloud platforms like Office 365 and SharePoint Online, some businesses are still not ready to move the data to the cloud. There are many regulatory requirements that make it difficult for companies to move every workload to the cloud.

SharePoint is a collaboration platform that is majorly used for content management and electronic document management. But organizations that are using SharePoint often get confused about two options – whether move to SharePoint Online or stay with SharePoint on-premises. Deciding between SharePoint on-premises and Online is not that easy. There are various factors to consider when it comes to choosing between SharePoint Online and on-premises.

Here, we will discuss the differences between SharePoint Online and SharePoint on-premises. Reading this article will help you make a better decision for your business.

  • Cost Considerations
    The initial cost is a factor to consider when it comes to choosing between SharePoint on-premises or SharePoint Online. For instance, the SharePoint On-premises environment is made up of multiple SharePoint servers, with each server requiring a proper license. Deploying and maintaining on-premises servers impacts the overall cost of the on-premises environment. As most of you might know that SharePoint Online can also be accessed as an application with Office 365 subscription, so its value is determined by a flat rate license where the subscription is calculated per user.
  • Storage Considerations
    Storage is another factor to consider while choosing between SharePoint on-premises and SharePoint Online. With an on-premises environment, you can get unlimited storage space provided you have the right infrastructure. However, SharePoint Online doesn’t offer unlimited storage space. Though it does provide a cheap storage, there is a limit per user and also per subscription.
  • Development
    With SharePoint on-premises, you can convey a full trust arrangement or solution. Also, features in the SharePoint farm have the scope for webpage collection, web applications, and a whole farm public confronting site is possible with a little customization. In SharePoint Online, you cannot convey a full trust arrangement. Only Sandbox solutions are conceivable with the scope up to the webpage collection level.
  • Collaboration Tools
    With SharePoint Online, you will not only get the SharePoint environment but also get other ready-to-access collaboration tools like Microsoft PowerApps, Microsoft Flow, Azure functions, etc. that are provided by Microsoft. With SharePoint on-premises, you don’t get any integrated tools and applications; you will have to make separate arrangements for more tools and applications.

These factors might help you decide which platform you should choose. However, if you are still confused about it, then have a look at the below points:

When to Use SharePoint Online?

SharePoint Online is a better choice if you want to:

  • Get SharePoint quickly and as soon as possible
  • Reduce the costs of your dedicated infrastructure
  • Collaborate with external employees, consumers, and customers
  • Give your employees access to integrated tools for mobile deployments

When to Use SharePoint On-premises?

SharePoint on-premises is a better choice if you have:

  • Dedicated infrastructure for SharePoint
  • Need for data on-premises because of compliance requirements
  • Don’t have sufficient bandwidth for your internet connection

Considering these points will help you decide which environment is ideal for your organization. However, whatever environment you choose, the most complicated task will be migrating data from file servers to SharePoint Online or SharePoint on-premises. Migrating data manually is not that simple. So, it is recommended to use third-party SharePoint Migration software like Kernel Migrator for SharePoint, which can make your migration quick and easy.


SharePoint is a new-age content management and collaboration platform for enterprises. It allows businesses to manage their content effectively. But, most companies often get confused about choosing between SharePoint Online and on-premises. Here, we differentiate both the environments based on multiple factors to help you make a better decision.