SharePoint Online vs. SharePoint On Premise [2024]

The first question that comes to mind if you want to implement SharePoint in your company is, “Is it on-premises or online?” So, we need to understand the difference between sharepoint online and on-premise clearly.

Microsoft offers several advantages in SharePoint Online Microsoft 365 over on-premises versions, yet many organizations still hesitate to switch to SharePoint Online.

Due to internal security constraints, several businesses may not want to move their SharePoint on-premises data to the cloud. Additionally, some businesses prefer to stick with their current, successful solutions over moving to the cloud.

This article will show the difference between SharePoint Online and On-Premise, its licensing, and when we should use either for our organization.

First, let’s review the fundamentals of Microsoft SharePoint.

What is Microsoft SharePoint?

  • Microsoft SharePoint is like a big digital bulletin board for businesses. It’s a place where teams can put files, information, and other stuff they need to share.
  • Instead of everyone keeping their notes or documents on their computers, they can put them on SharePoint so everyone on the team can see and use them.
  • SharePoint is available in two different configurations: SharePoint Online and SharePoint On-Premise. They both provide distinctive features for any organization trying to increase creativity and productivity.

Now let’s explore more differences between SharePoint Online and SharePoint On-premise.

SharePoint Online vs SharePoint OnPremise

What is SharePoint Online?

The Microsoft 365 suite includes SharePoint Online, an important web-based tool that enables smooth information sharing and collaboration throughout an organization.

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It is the SharePoint platform’s cloud version licensed per user.

SharePoint Online can be purchased separately or as a bundle with the Microsoft 365 plans.

SharePoint Online (Plan 1)SharePoint Online (Plan 2)Office 365 E3
USD$5.00
user/month
USD$10.00 user/monthUSD$23.00
user/month
For small-to-mid-sized businessesIncludes features of SharePoint Online (Plan 1) planIncludes features of SharePoint Online (Plan 2) plan
1 TB of OneDrive storage per userUnlimited personal cloud storageUse Microsoft 365 desktop apps (PowerPoint, Word, Excel, OneNote, Publisher PC only, and Access PC Only).
Share files securely inside or outside your companyAdvanced DLP capabilities to identify, monitor, and protect sensitive informationBusiness class email hosting with unlimited mailbox [Custom email domain addresses like xyz@companyname.com]
Sync local copies of files or folders for offline viewing and editing on Mac or PCCustomize enterprise search and results with enhanced features to surface resources across Microsoft 365Web versions of Outlook, Word, Excel, and PowerPoint
Use team sites to connect people with intranets and portalsCovers 5 PCs or Macs, 5 Phones, and 5 Tablets per user
Manage content in document libraries with versioning and access controlProvides Automate business processes with Microsoft Power Apps and Microsoft Flow develop into a SharePoint List or library
Move and manage files between OneDrive and SharePointAccess to OneNote features
Share, organize, and track information with Microsoft ListsOnline Video conferencing meetings for up to 250 people
Licensed for commercial useOnline Video conferencing meetings for up to 10,000 people with Skype meeting broadcast
Accessible for Android, iOS, and Windows or OneDrive mobile apps for Android, iOS and Windows
24/7 phone and web support

To know more details about SharePoint Online Licensing and Pricing, refer to this complete article: SharePoint Online Plans

sharepoint on premise vs online

Get SharePoint Online Plans from Microsoft 365 Plans

Also, you can get the SharePoint plans from the Microsoft 365 Business Premium Subscription.

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Microsoft 365 Business Premium
USD$22.00 user/month
latest versions of Word, Excel, PowerPoint, and more
Manage files with 1 TB of cloud storage on OneDrive per user
Compatible with Windows 11, Windows 10, Windows 8.1, and the three most recent versions of macOS
Control access to sensitive information using encryption to help keep data from being accidentally shared

Check out this article to know more details: Microsoft 365 Business Premium

sharepoint on prem vs online

What is SharePoint On-Premise?

An internal version of SharePoint installed on your local servers is called SharePoint On-Premise. Your IT department manages the software, regularly updates it, and has the ability to add features or customize it.

Intranet sites for SharePoint On-Premises are licensed utilizing the Server/CAL (Client Access Licence) model.

For each instance of the software that is now running, SharePoint Server 2019 is necessary, and CALs are needed for each user or device accessing a SharePoint Server.

SharePoint Standard CALSharePoint Enterprise CAL
Delivers the core capabilities of SharePointDelivers the full capabilities of SharePoint
Sites: An integrated platform for all of your business websitesSites: an integrated platform for all of your business websites
Communities: A platform for seamless cooperationCommunities: A platform for seamless cooperation
Content: Widespread adoption of enterprise content management (ECM)Content: Widespread adoption of enterprise content management (ECM)
Search: Visual top bets, visual previews, and people and expertise searchSearch: Along with the usual search functions, add entity extraction, video search, and item recommendations.
Business Intelligence for everyone (includes Power View, Excel Services, and Visio Services)

Here, you can check out the various SharePoint On-premise versions that Microsoft has released till now.

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Below are the on-premise versions released by Microsoft till now.

VersionFree VersionPaid VersionYear
1.0STS (SharePoint Team Services)SPS 2001(SharePoint Product Services)2001
2.0WSS 2.0SPS 20032003
3.0WSS 3.0Microsoft Office SharePoint Server (MOSS) 20072006
2010SharePoint Foundation ServerSharePoint Server 20102010
2013SharePoint Foundation ServerSharePoint Server 20132013
2016         SharePoint Server 20162016
2019         SharePoint Server 20192016
SharePoint Server Subscription Edition2021

Difference Between SharePoint Online and SharePoint On-Premise

The table below represents all the comparison differences between SharePoint Online and SharePoint On-Premise:

SharePoint OnlineSharePoint OnPremise
COSTSIt is less expensive to install SharePoint Online because it is included in the Microsoft 365 subscription and is paid for by each user.Buying and maintaining hardware, paying for licences, etc.
DATA SECURITYUses strong processes to keep the data updated by industry standards for SharePoint Online.Data security falls under your or your IT team’s purview.
EXTERNAL USERSBuying and maintaining hardware, paying for licenses, etc.Manual construction and adjustment are required for the infrastructure linking external users.
UPDATESMicrosoft provides patches and updates automatically.Patches and other updates are applied by your internal IT team, who also maintains the system.
DATA STORAGEData is stored in the cloud.On your local network, data is kept.
DATA BACKUPAn organization’s IT administrators must create, test, and maintain data backup systems.Easily expand using a range of Azure services, connecting other users.
DEDICATED INFRASTRUCTUREMicrosoft controls backups but with restrictions.Involves equipping your organization with specialized hardware and software infrastructure.
CUSTOMIZATIONSOffers a limited number of customizations, and before beginning any customizations, the user must first contact the Microsoft support staff.Does not require specialized infrastructure in terms of hardware and software. It’s included in the Microsoft 365 subscription plans.

When Should Use SharePoint Online?

The greatest option for creating a scalable intranet is SharePoint Online. It minimizes complexity and expenses.

Below are some of the major key features of SharePoint Online:

  • Build new SharePoint Online sites in less time
  • Data security and updates
  • Connect with external users for team collaboration
  • Reduce costs for dedicated infrastructure and IT maintenance
  • Customizable at any time
  • integration with already-existing applications

When Should Use SharePoint On-Premise?

SharePoint on-premise solution is ideal if you already have a dedicated infrastructure.

Below are some of the major key features of SharePoint On-Premise:

  • High customization requirements
  • Extremely high compliance requirements
  • Additional storage than what Microsoft provides
  • An intranet will only be accessible through the network of your organization.
  • Greater flexibility about the design of your SharePoint farms
sharepoint online vs on premise

Conclusion

Many businesses find it difficult to decide between SharePoint Online and SharePoint On-Premise, especially if they are unsure of each platform’s benefits. Your decision ultimately depends on your needs, demands, and business objectives.

Both applications provide distinctive multipurpose capabilities, and our detailed comparison will help you select the best option for your business.

In this tutorial, you learned about Microsoft SharePoint, what is SharePoint Online, and its plans. Also, we saw what is SharePoint On-premise, the difference between SharePoint on-premise and online, and when we should use SharePoint Online and On-premise. Do you have got an idea of sharepoint online vs on-premise?

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