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Explore the Difference Between SharePoint Online and On-Premise

Published By Aldrich Calvin
Anuraag Singh
Approved By Anuraag Singh
Published On January 16th, 2024

Overview: Sometimes it becomes difficult for organizations to choose what and when from SharePoint Online vs on-premise. To overcome this confusion, we framed this article to clear the difference between SharePoint Online and on-premise.

Businesses are using SharePoint to enhance collaboration for a smoother workflow. Some of the organizations are still connected to the SharePoint on-premise. Because of several reasons such as huge data, not being ready for the shift, and others. However,  there is a huge difference between the SharePoint variants. So go with the article and analyze which one is best for you among the Online and on-premise versions of SharePoint.

Table Of Content

An Overview of SharePoint

Microsoft SharePoint provides seamless collaboration for the organizations using the sites. The documents and generic lists are maintained to store the information. Different types of SharePoint sites that can be created as per the requirement such as Team sites, communication sites, and many more. All the sites can be created, deleted, and modified easily. There is also an option of subsites that are created for a particular set of employees. This is the highly secured app of Microsoft with the latest security algorithms. Microsoft offers SharePoint variants such as SharePoint Online and on-premise. Let’s explore SharePoint Online vs on-premise in detail.

Introduction to Microsoft SharePoint Online

This variant of Microsoft SharePoint is very popular for providing collaboration and storing documents. This is a part of the Office 365 plan and has regular updates. It can also purchased as a standalone product. You can have its plan1, plan2, and Office 365 E3. There are different features available as per the plan. You can choose plan 1 for small and medium enterprises. Plan 2 is good for large organizations having more OneDrive storage and Office 365 E3 plan has some other apps also.


  1. It is a cloud-based platform used to create the sites and subsites for the organization.
  2. SharePoint Online provides a central storage to store documents and files.
  3. It improves the collaboration through blogs, forums, and others as well.
  4. Because it is easy to integrate with Microsoft Office then it is also used to edit documents.
  5. There are multiple options to customize the sites in SharePoint.


  1. SharePoint Online is expensive because it needs to buy from the Microsoft Official site.
  2. Sometimes for non-tech users, it becomes difficult to understand for the new users.

Microsoft SharePoint On-Premise Server

The SharePoint On-premise is the in-house version of the SharePoint used to manage files and make collaboration easier. It needs to be managed by the IT admin by setting up the complete infrastructure. It requires the package of SharePoint Standard CAL or SharePoint Enterprise CAL. You can use anyone as per the requirement.


  1. SharePoint on-premise is highly customizable as per the requirement.
  2. It is used for document management and other purposes as well.
  3. SharePoint on-premise is scalable and used by any size of organization. 


  1. It is complex to set up and use for large-sized organizations.
  2. It is only limited to the Microsoft Windows operating system.

Difference Between SharePoint Online and On-Premise Based on Certain Factors

Let’s discuss the factors that make the decision easier for you to choose between SharePoint Online and On-premise SharePoint.

1. Cost Effectiveness

In the SharePoint on-premise you need to manage hardware on your own. Due to the various versions of SharePoint, sometimes you need to manage multiple servers such as SharePoint 2019, 2016, and others as per the requirement. If you want to upgrade any of the servers then you also need to put an extra amount into it. But if you have SharePoint Online then you only have to pay the amount as per the Office 365 subscription plan. In terms of cost-effectiveness, choosing SharePoint Online is the best choice.

2. Storage

In SharePoint on-premise you can manage the infrastructure as per your requirement to provide storage to the Organization. SharePoint Online does not provide unlimited storage and charges as per the user and the subscription plan you bought.

3. Customization

The SharePoint on-premise can be customized as per the requirement such as webpage collection, and web application. But in SharePoint Online you cannot customize as per the requirement instead of sandbox. Customization is also a major factor in evaluating the difference between SharePoint online and on-premise.

4. Collaboration tools 

In SharePoint Online, there are multiple collaborative tools provided by Microsoft such as Microsoft PowerApps, Microsoft Flow, Azure functions, etc. But in the SharePoint on-premise, there are no integrated tools and apps. You have to make separate arrangements for other collaborative tools and apps.

5. Latest Offerings

SharePoint Online gets regular updates to improve the user experience and enhance security. You do not need to pay the extra amount for the updates. But in the case of SharePoint on-premise, you need to upgrade the version again and again to explore the latest features by buying from Microsoft.

6. Scalability 

SharePoint Online is scaled easily just by adding subscriptions. But on-premise, it is not much easier. Scalability is also the biggest factor in choosing between SharePoint Online vs on-premise.

These all are the factors that help to calculate the difference between SharePoint Online and on-premise. Through the differences, one can make the decision of choosing which one is better for collaboration. Let’s have a look at some key points for SharePoint Online vs on-premise.

When to Use SharePoint Online?

Some of the situations in which SharePoint Online is a great fit are.

  • If you want to access SharePoint quickly.
  • Reduced the cost of the infrastructure.
  • Want to collaborate with external employees and customers?
  • Need for collaborative tools.
When to Choose SharePoint on-premise?

These are situations in which you should go with the SharePoint on-premise.

  • If you want to set up dedicated Infrastructure.
  • Do not have the required bandwidth.
  • Requires or more customizations.
  • Need larger storage.
SharePoint Online vs on-Premise
SharePoint Online SharePoint On-Premise
Microsoft SharePoint Online does not require 

hardware to manage locally

In the SharePoint On-premise, there is a need to manage the special hardware.
Microsoft improves the data security of SharePoint regularly. The IT team should manage the security of the data regularly.
Microsoft performs the backup of the data. The backups should be executed manually.
Data is stored on the cloud server. Data is stored on the local servers.
fewer customizing options. It is highly customizable.
The charges as per the Microsoft plan Charges are depending on the server and license.
Data accessibility depends on the Internet bandwidth. Data accessibility depends on the infrastructure.

SharePoint Online vs on-premise is discussed in detail. Now, you can pick the right one for you as per the requirements. But, have you ever thought what if the organization is ready to merge with others? In that situation, you have to depart all SharePoint data to the other SharePoint site. However, the question arises of how to depart all these data to the other SharePoint site.

Depart From One SharePoint Site to Another

Do not worry, if you are stuck in the situation of migration of SharePoint to another. You can go with the SysTools SharePoint Migration tool. Through this tool, you can depart all of the SharePoint data to another site without hassle. You do not need to be good at SharePoint technicalities because of its simple user interface. This tool takes care of the data security as well throughout the process and able to copy document library from one site to another also.

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We have explained all the factors on the basis of which you can find the difference between SharePoint Online and on-premise. An expert-recommended tool is also elaborated to solve the most occurred query where the admins are stuck on moving the SharePoint site to another site. You can choose any variant of SharePoint as per your need.

Frequently Asked Questions

Q1. Which variant is suitable for small enterprises with fewer requirements and having a skilled IT team?

Ans – The SharePoint on-premise is suitable for small organizations having fewer requirements.

Q2. Can I take the SharePoint Online as a standalone application?

Ans – Yes you can take the SharePoint Online as a standalone application.

Q3. I want to customize SharePoint at a higher level which one is the right choice then?

Ans – The SharePoint on-premise is better for customizing.

Q4. Is it possible to shift the SharePoint data to another site?

Ans – Yes, using the above-mentioned tool you can do so.