What is SharePoint and How Does SharePoint Work?

If someone asked me “what is SharePoint?” a few years ago, I’d have struggled to give a simple answer. The truth is, SharePoint is one of those tools that does so many things that it’s actually hard to describe in one sentence.

But let me try: SharePoint is a Microsoft platform that lets teams store, organize, share, and collaborate on files and information — all from a browser.

That’s the short version. In this tutorial, I’ll walk you through what SharePoint really is, how it works under the hood, what you can do with it, and when you should (and shouldn’t) use it. Whether you’re a complete beginner or someone who’s been poking around SharePoint sites without really understanding them, this guide is for you.

What is SharePoint, Really?

Think of SharePoint as your company’s internal website — but one that’s also a file storage system, a collaboration tool, a workflow engine, and a knowledge base all rolled into one.

When you open SharePoint, you see sites. Each site is basically a web page (or a collection of pages) that belongs to a team, a department, or a project. Inside those sites, you’ll find document libraries (where files live), lists (like mini databases or to-do trackers), and pages (where teams share news, announcements, or resources).

Here’s a simple way to think about it:

• A SharePoint site = A home base for a team or department
• A document library = A folder system with superpowers (versioning, co-authoring, metadata)
• A list = A structured table for tracking things (tasks, requests, contacts, assets)
• A web part = A building block you drop onto a page (like a news feed, calendar, or file viewer)

SharePoint has been around since 2001, and over the years it’s grown into something much bigger than just a “file sharing tool.” Today, it powers intranet portals, approval workflows, custom apps, and even parts of Microsoft Teams in the background.

SharePoint Online vs. SharePoint Server

Before going further, I should explain the two main versions of SharePoint, because people often get confused between them.

SharePoint Online is the cloud version. It’s included with most Microsoft 365 subscriptions (like Microsoft 365 Business Standard or E3). Microsoft hosts it, maintains it, and pushes updates automatically. You don’t need any servers. You just sign in at sharepoint.com and you’re in.

SharePoint Server (also called SharePoint On-Premises) is the version your IT team installs and manages on your company’s own servers. You get more control, but you also take on all the responsibility — updates, backups, security patches, everything.

For most businesses today, SharePoint Online is the recommended path. It’s cheaper to run, always up to date, and integrates seamlessly with the rest of Microsoft 365.

	SharePoint Online	SharePoint Server
Hosting	Microsoft’s cloud	Your own servers
Updates	Automatic	Manual by IT
Cost	Part of Microsoft 365	Separate licensing + server costs
Best for	Most businesses	Regulated industries needing on-prem control

Check out SharePoint Online vs. SharePoint On-Premise: Which Is Right for Your Organization?

How Does SharePoint Work?

Let me break this down step by step, because “how SharePoint works” is one of the most searched questions around this topic — and most explanations make it sound more complicated than it is.

1. You Start With a Site

Everything in SharePoint starts with a site. There are two main types:

• Team Site — Built for collaboration. It’s connected to a Microsoft 365 group (and often a Teams channel). Your team can co-author documents, manage tasks, and share resources here.
• Communication Site — Built for broadcasting. Think of it as a polished internal webpage where HR posts company news, IT shares update announcements, or leadership communicates strategy.

When you create a Team Site, SharePoint automatically creates a document library called “Documents” where all your files live.

2. Files Go Into Document Libraries

A document library isn’t just a folder. It’s a smart storage system where every file can have extra information attached to it — called metadata. For example, you can tag a contract with a client name, a project code, and a status (Draft, Review, Approved).

Now instead of hunting through folder hierarchies, you can just filter by “Status = Approved” and find what you need instantly.

Document libraries also give you:

• Version history — Every time someone saves a file, SharePoint keeps the old version. You can roll back to any previous version with a click.
• Co-authoring — Multiple people can edit the same Word, Excel, or PowerPoint file at the same time, with changes syncing in real time.
• Check-in / Check-out — If you don’t want others editing a file while you’re working on it, you can “check it out,” make your changes, then check it back in.

3. Lists Track Structured Data

If document libraries are for files, Lists are for data. A SharePoint list works a lot like an Excel table — rows and columns — but it lives in the browser, supports multiple views, and can trigger automated workflows.

Here are some real examples of how teams use lists:

• IT help desk — Log tickets, assign to staff, track status
• HR onboarding — Track new hire tasks with checkboxes and due dates
• Asset register — Catalogue company equipment with location and condition
• Project tracker — Manage tasks, owners, and deadlines across a team

Every list item can have permissions too, so you can control exactly who sees what.

4. Permissions Control Who Sees What

This is one of SharePoint’s most powerful features, and also one of the most misunderstood. SharePoint uses a permissions model built around three levels:

• Site-level permissions — Who can access the entire site
• Library/list-level permissions — Who can access a specific library or list
• Item-level permissions — Who can access an individual file or list row

By default, permissions are inherited from the parent (so a file inherits permissions from its library, which inherits from the site). But you can break that inheritance and set unique permissions anywhere you want. For example, you can have an HR folder inside a Team Site that only HR staff can open, even though the rest of the site is open to the whole company.

5. Workflows Automate the Boring Stuff

This is where SharePoint gets really useful for businesses. Using Power Automate (formerly Microsoft Flow), you can create automated workflows triggered by events in SharePoint.

Some common examples:

• When a document is uploaded to a library → send an email to a manager for approval
• When a list item status changes to “Approved” → notify the requester via Teams message
• When a new employee form is submitted → create tasks in Planner and send a welcome email

These workflows run in the background without anyone pressing a button. Once set up, they just work.

SharePoint vs. OneDrive vs. Teams — What’s the Difference?

This is probably the most common source of confusion for anyone new to Microsoft 365. Here’s how I think about it:

• OneDrive = Your personal hard drive in the cloud. It’s just for you. You can share files from it, but it’s essentially your own storage space.
• SharePoint = The team’s shared filing cabinet. It belongs to the team, not one person. If you leave the company, the files stay.
• Teams = The chat and meeting room. But here’s the thing — when you share files inside a Teams channel, they’re actually stored in a SharePoint site behind the scenes. Teams is the front-end; SharePoint is the back-end.

A practical way to remember this: if a file belongs to you, put it in OneDrive. If it belongs to the team, it should live in SharePoint (or a Teams channel, which is the same thing).

What is SharePoint Actually Used For?

Here are the most common real-world use cases I’ve seen organizations implement:

• Intranet portal — A central hub where employees find HR policies, IT announcements, org charts, and company news
• Document management — Replacing messy shared drives with organized libraries that have metadata, versioning, and approval workflows
• Project collaboration — Team sites where project documents, task lists, and timelines all live in one place
• Knowledge base — A wiki-style site where teams document processes, FAQs, and how-to guides
• Forms and approvals — Using Power Apps and Power Automate to build custom request forms that route to the right approvers
• Department sites — Each department (Finance, HR, Marketing) gets their own SharePoint site with relevant content and tools

SharePoint and Microsoft Teams: How They Work Together

A lot of people use Teams daily without realizing how much SharePoint is powering it behind the scenes.

Every time you create a Team in Microsoft Teams, a SharePoint Team Site is automatically created for it. The “Files” tab inside every Teams channel? That’s a SharePoint document library. When you pin a SharePoint page to a Teams tab, you’re just bringing the two interfaces together.

This means everything you upload to a Teams channel is version-controlled, permission-managed, and searchable through SharePoint — even if you never open SharePoint directly. It’s a good reason to use Teams channels for team files rather than sending attachments over chat.

Getting Started With SharePoint

If you have a Microsoft 365 account, you already have access to SharePoint. Here’s the fastest way to get started:

1. Go to office.com and sign in with your Microsoft 365 account
2. Click on SharePoint from the app launcher (the waffle icon)
3. You’ll land on the SharePoint start page, which shows sites you follow and recently visited files
4. Click + Create site to make your first Team Site or Communication Site
5. Add a document library, upload some files, and invite your team members

Start simple. You don’t need to configure everything on day one. Create a site, upload your key documents, and get your team collaborating. The rest you can build out over time as you understand how your team works.

SharePoint in 2026 and Beyond: AI and Copilot

Microsoft has been rolling out AI capabilities into SharePoint through Microsoft 365 Copilot. In practical terms, this means you can now:

• Ask a SharePoint site a question in plain English (“Show me all project proposals from Q3”)
• Get AI-generated summaries of long documents
• Use SharePoint Agents — custom AI chatbots scoped to a specific site or library — to help users find information faster

These features are still rolling out as part of Copilot-enabled Microsoft 365 plans, but they’re worth knowing about if you’re planning your SharePoint strategy.

Check out How to Copy Agent Builder Agent to Copilot Studio?

SharePoint vs. Google Drive: Quick Comparison

If your team is coming from Google Workspace and evaluating SharePoint, here’s a straightforward comparison:

Feature	SharePoint	Google Drive
File storage	Yes (document libraries)	Yes (My Drive / Shared Drives)
Co-authoring	Yes (Office files)	Yes (Google Docs/Sheets)
Intranet/sites	Yes (powerful)	Limited (Google Sites, basic)
Workflow automation	Yes (Power Automate)	Limited (AppSheet, basic)
Microsoft 365 integration	Native	Limited
Customization	Extensive	Basic

SharePoint wins on customization and enterprise features. Google Drive wins on simplicity for smaller teams. The choice usually depends on whether your organization is already in the Microsoft 365 ecosystem.

Frequently Asked Questions

In this tutorial, I explained everything you need to know to understand what SharePoint is and how it works. Start with a simple team site, get comfortable with document libraries and lists, and then build from there. Once you see how it connects with Teams and Power Automate, you’ll start seeing opportunities to simplify a lot of the manual work your team does every day.

You may also like the following tutorials:

• SharePoint List View: Create, Change & Delete a View
• SharePoint Online Hero Web Part
• SharePoint Farm Architecture Overview