SharePoint is a powerful platform for collaboration, document management, and business automation. Organizations can choose between SharePoint Online (cloud-based) and SharePoint Server (on-premises) based on their needs. Below is a detailed comparison of SharePoint Online vs. SharePoint Server to help businesses make the right decision.
1. Deployment Model
One of the most significant differences between SharePoint Online and SharePoint Server is how they are deployed.
● SharePoint Online (Cloud-Based)
- Hosted by Microsoft as part of Microsoft 365.
- No need for on-premises servers or IT infrastructure.
- Automatic updates and feature rollouts.
- Requires an active Microsoft 365 subscription.
● SharePoint Server (On-Premises)
- Installed on an organization’s internal servers.
- Full control over deployment, security, and configurations.
- Requires manual upgrades and maintenance.
- One-time perpetual licensing model with optional Software Assurance.
2. Cost and Licensing
The pricing structure varies significantly between SharePoint Online and SharePoint Server.
● SharePoint Online
- Subscription-based pricing (monthly or yearly).
- Included in Microsoft 365 plans (e.g., E3, E5).
- No extra costs for hardware, maintenance, or security updates.
● SharePoint Server
- One-time licensing fee per server.
- Requires additional costs for hardware, IT staff, and maintenance.
- Licensing models:
- SharePoint Server Standard
- SharePoint Server Enterprise
- SharePoint Server with Software Assurance
3. Security and Compliance
Security considerations are critical when selecting between SharePoint Online and SharePoint Server.
● SharePoint Online Security
- Microsoft manages security (automatic patches, updates).
- Built-in compliance for GDPR, HIPAA, ISO 27001, and other regulations.
- Data encryption at rest and in transit.
- Multi-Factor Authentication (MFA) and Azure Active Directory integration.
● SharePoint Server Security
- Full control over security configurations.
- Custom security policies based on organization needs.
- Requires manual patching and updates.
- Data remains within internal infrastructure, reducing third-party risks.
4. Customization and Development
Both versions support customization, but SharePoint Server offers greater flexibility.
● SharePoint Online Customization
- Limited customization due to Microsoft’s cloud policies.
- Supports Power Automate, Power Apps, and SharePoint Framework (SPFx).
- Can integrate with third-party apps via Microsoft Graph API.
● SharePoint Server Customization
- Full server-side code customization available.
- Supports custom workflows, solutions, and third-party integrations.
- Can develop custom web parts, themes, and branding.
5. Feature Availability and Updates
Microsoft prioritizes SharePoint Online when releasing new features.
● SharePoint Online Features
- Regular feature updates without downtime.
- AI-powered search, Microsoft Syntex (content AI), and advanced integrations.
- OneDrive integration for easy file sharing and storage.
● SharePoint Server Features
- Feature updates require manual installation.
- Organizations often run older SharePoint versions (e.g., SharePoint Server 2016, 2019).
- No cloud-based AI features like Microsoft Syntex.
6. Performance and Scalability
Performance and scalability depend on the organization’s infrastructure needs.
● SharePoint Online Performance
- Optimized for Microsoft’s cloud infrastructure.
- Automatically scales based on demand.
- No need to manage server performance or capacity planning.
● SharePoint Server Performance
- Requires dedicated IT resources to optimize performance.
- Organizations need to manage storage, backups, and uptime.
- Can be configured for high performance with load balancing.
7. Hybrid Deployment Option
Some organizations choose a hybrid approach, combining both SharePoint Online and SharePoint Server.
● SharePoint Hybrid
- Connects on-premises SharePoint with SharePoint Online.
- Enables hybrid search, so users can find content across both environments.
- Useful for organizations that want cloud benefits while keeping some data on-premises.
8. Backup and Disaster Recovery
Backup strategies differ significantly between the two versions.
● SharePoint Online Backup
- Microsoft manages backups automatically.
- Data retention policies can be configured in Microsoft 365.
- Limited recovery options beyond Microsoft’s retention period.
● SharePoint Server Backup
- Requires manual backup strategies (SQL Server backups, third-party tools).
- Organizations must manage disaster recovery planning.
9. User Management and Authentication
Authentication differs based on the deployment model.
● SharePoint Online Authentication
- Integrated with Azure Active Directory (AAD).
- Supports Multi-Factor Authentication (MFA).
- Allows external sharing with guest users.
● SharePoint Server Authentication
- Uses Windows Active Directory (AD) for authentication.
- Requires manual configuration for external users.
10. Best Use Cases
The choice between SharePoint Online and SharePoint Server depends on business needs and IT capabilities.
● When to Choose SharePoint Online
✔️ No dedicated IT team for SharePoint management.
✔️ Need automatic updates and cloud security.
✔️ Looking for cost-effective collaboration tools.
✔️ Require integration with Microsoft 365 apps.
● When to Choose SharePoint Server
✔️ Need full control over security and compliance.
✔️ Have custom business applications requiring server-side development.
✔️ Must store data on-premises due to regulations.
✔️ Already invested in on-premises IT infrastructure.
Final Verdict: Which One is Better?
- For most businesses, SharePoint Online is the best choice because of its scalability, automatic updates, and cloud security.
- Large enterprises or organizations with strict compliance requirements may prefer SharePoint Server for data control and customization.
- A hybrid approach is ideal for organizations needing a balance between cloud and on-premises solutions.