SharePoint Online vs on premise [Complete Comparision]

Every time I start a new SharePoint project discussion with my client in the United States, I was first asked the difference between SharePoint Online and SharePoint on-premise version. So let us discuss in detail SharePoint Online vs on premise.

The main difference between SharePoint Online and the On-Premise version is that Microsoft provides SharePoint Online as a cloud service in Microsoft 365. On-premises, the organization must install, maintain, and use SharePoint on its premises, independent of Microsoft.

If you want to use SharePoint in your organization, then there are two ways we can access and use SharePoint.

  1. SharePoint Online: Microsoft provides this as a service as a part of Microsoft 365, and we can pay and use SharePoint.
  2. SharePoint Online: In this case, you need to install SharePoint on your premises and use it by taking a license key from Microsoft.

What is SharePoint Online?

SharePoint Online is a cloud-based service in Microsoft 365 that helps organizations to create, store, and share content (files, data, news, etc.). It helps to quickly create sites that can be used by your team members inside and outside of your organization.

Users can access SharePoint seamlessly using any device like PCs, tablets, or mobile devices.

It helps to empower teamwork and increase productivity in your organization.

Not only this, we can use SharePoint with Power Platform (Power Apps, Power BI, and Power Automate) to automate all the business processes running in your organization.

We required a browser to access and work with SharePoint.

According to Microsoft, More than 200,000 organizations and 190 million people have SharePoint for intranets, team sites and content management.

Many organizations have started using SharePoint for their day-to-day tasks and business processes.

To use SharePoint Online, as an organization, you can take licenses from Microsoft based on the number of users you have in your organization. There are various licenses available to use SharePoint Online from Microsoft.

  • SharePoint Online Plan 1
  • SharePoint Online Plan 2
  • Office 365 E3
  • Microsoft 365 small business plans
  • Microsoft 365 enterprise plans
  • Office 365 enterprise plans

Check out the official site.

When to use SharePoint Online?

  • If you use SharePoint without having any headaches with infrastructure, you should consider using SharePoint Online, as Microsoft takes care of it.
  • Always up to date, not much migration headache, unlike in SharePoint On-Premise version, where there will be frequent versions released from Microsoft team.
  • If you want to focus on your core business rather than maintaining infrastructure, use Microsoft SharePoint Online.
  • In SharePoint Online, you can use other cloud services for your business, like Microsoft Power Apps, Power BI, Power Automate, Power Pages, etc, easily.

What is SharePoint On-Premise?

In the case of SharePoint On-Premises, we need to install, configure, and use SharePoint within our organization’s data center. This means the organization will be fully responsible for everything from installation to updates, patches, etc. Microsoft will not be responsible for it. Your IT team will be responsible for it.

There are various licensing models available for SharePoint on-premises versions.

History of various versions of SharePoint On-Premises:

  • SharePoint Portal Server 2000
  • Windows SharePoint Services (WSS)
  • Office SharePoint Portal Server 2003
  • Microsoft Office SharePoint Server 2007
  • SharePoint Server 2010
  • SharePoint Server 2013
  • SharePoint Server 2016
  • SharePoint Server 2019
  • SharePoint Server Subscription Edition

When should you use SharePoint on-premise?

  • If an organization wants to keep data within its own data center, it is best to use the SharePoint on-premise version.
  • If users want to use the SharePoint server object model for customization, then the SharePoint server is the only option.
  • Want to have full control of the SharePoint server? Choose the SharePoint On-Premise version.
  • Additional space for your content without paying for a license like SharePoint Online.

SharePoint Online Vs SharePoint On-Premises

Here are a few differences between the SharePoint Online and on-premise versions.

SharePoint OnlineSharePoint On-Premises
SharePoint Online data resides in the Microsoft data center.It will reside in the organization’s own data centers.
Microsoft is clamming 99.99% uptime for SharePoint Online.It completely depends on the organization’s IT team.
Available as a cloud service with per user license.Available as an on-premise service for that organization only.
Microsoft team will be responsible for installing, updating, or patching if anything is required.An organization’s IT team will be responsible for installing, updating, and managing the entire SharePoint firm.
No additional cost for managing SharePoint as it is included in the license.The organization needs to set up its own SharePoint admin team to manage the SharePoint farm, which requires additional costs depending on how big is the SharePoint farm and the number of administrators required.
SharePoint Online is always up to date, as Microsoft keeps on adding new features.We can use server-side and client-side code for development in SharePoint on-premise version.
We cannot use server-side code for customization in SharePoint Online. SharePoint Online supports client-side code and SPFx for development.We can use server-side as well as client-side code for development in SharePoint on-premise version.
SharePoint Online environment is secured according to various industry-specific security standards.Your IT team will provide security for your data.

The above are a few differences between SharePoint Online and SharePoint on-premise versions.

SharePoint Online vs SharePoint On Premise
SharePoint Online vs SharePoint On-Premise


I hope you got an idea of when to use SharePoint Online and when to use SharePoint on-premise version. Let me know if there is any difference or anything you find related to SharePoint Online vs on-premise. If you want to implement SharePoint in your organization, then I hope this article will be helpful.

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