Sharepoint On Premise vs Online: A Brief Comparison

Sharepoint On Premise vs Online Key Differences

Microsoft claims that there are over 200,000 organizations and up to 190 million people using Sharepoint. There are various Sharepoint environments available that can impact the capabilities of this tool and how you use it for team collaboration. There are two particular options available: Sharepoint on-premise vs online. 

This guide will show you the key differences between these two types of Sharepoint solutions. Take note of the information to determine how it aligns with your business objectives. 

Sharepoint On-Premise vs Online: Key Differences

Microsoft Sharepoint is a team collaboration tool designed for document and content management. Choosing the right Sharepoint configuration can help your team make the most of the features of this tool. It offers seamless integration with other products within the Microsoft suite, giving you more functionality and enhancing productivity. 

Let’s take a look at the different features to determine which to use for your organization: Sharepoint On Premise vs Online.

Operating System Requirements

The operating system requirements are one of the primary considerations when choosing between On-Premise and Online deployment of Sharepoint. 

If using Sharepoint On-Premise, these are the basic operating system requirements:

  • Windows Server 2012 R2
  • .NET Framework 4.5.2 or higher
  • SQL Server 2014

On the other hand, you have zero infrastructure requirements with Sharepoint Online. However, you must also consider the cloud migration process. Get your IT department involved in the migration process and how you plan on restructuring your IT infrastructure once you’ve successfully moved to the cloud. Even though running Sharepoint Online might seem like a breeze, there is plenty of planning involved. 

You may also consider the hybrid option, where you have both on-premise and online infrastructure for Sharepoint. This hybrid approach enables you to leverage the collaborative capabilities of the Microsoft 365 suite.


Cost is an important consideration when choosing between Sharepoint On-Premise vs Online. Consider the ancillary costs and the direct licenses involved.

Sharepoint On Premise requires multiple servers and each of these servers will need separate licenses. You must also consider the cost of buying an SQL server, Windows server, and the necessary hardware to run the tool on-premise. An additional license is required for the intranet users.

The cost of Sharepoint Online will be based on the number of licensed users. Even though the flat fee is charged per user, you can save money when it comes to hardware and server maintenance since the application is accessed through the cloud. The main advantage is that the license cost gives you access to other collaboration tools within the Office 365 suite. 

Both types of Sharepoint environments provide your team access to Microsoft Office web applications. The only difference is that some of these web applications require an exclusive license if you have Sharepoint On Premise whereas you won’t need additional licenses with Sharepoint Online. 

Updates and Maintenance

You need a dedicated IT team to maintain Sharepoint On-Premise. It is important to regularly update the capabilities of the collaborative tool with patches. The upside to choosing On-Premise is that the process of updating the system requires less downtime. 

Sharepoint Online does not require an experienced IT team. Microsoft will automatically update the system on the cloud. 

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Collaboration Tools

Microsoft Sharepoint is designed for ease of collaboration within teams. Therefore, both On Premise and Online capabilities are guaranteed to offer users maximum collaboration and productivity.

However, Sharepoint Online has the advantage of providing users with ready-to-access collaborative tools within the 365 suite. The difference with the On-Premise version is that you don’t get access to integrated apps and tools. You must set up any additional tools you need to facilitate ease of collaboration.

when to use Sharepoint online and on premise

Data Size

The data size is a crucial consideration because you want to ensure you have adequate storage capabilities. Make your decision between On Premise and Online based on the amount of data you must store. 

The storage capacity of Sharepoint On-Premise is dependent on the size of the SQL Server. You can optimize your SQL Server database based on your organizational assets. Sharepoint Online is cloud-based, so there is no unlimited data storage capacity. Microsoft limits every licensed user’s data capacity to 1 TB + 10 GB. If a user requires additional storage, you can purchase add-on storage as part of your Office 365 subscription.

The overall data limit with Microsoft Sharepoint Online is 25 TB. 


Security is an important factor that will determine your choice between an On Premise or an Online environment for Microsoft Sharepoint. 

Unfortunately, storing confidential business data in the cloud is not an option due to compliance and legal reasons for certain types of businesses. An On-Premise environment is the best option for them. 

considerations when choosing between On Premise and Online deployment of Sharepoint


Whether you want to scale your usage up or down, you want a Sharepoint tool that will give you flexibility. Sharepoint Online offers a scalable solution for businesses of all sizes. You can easily add or eliminate users from the environment, so you don’t have to pay for more than you need.

With Sharepoint On-Premise, you don’t have this kind of scalability and flexibility. 

When to Use Sharepoint On-Premise

The on-premise infrastructure is your best option if the following applies to your organizational needs:

  • A dedicated IT infrastructure
  • On-site data storage for compliance
  • Limited bandwidth within your network
  • A dedicated internal IT team
  • Require constant data backup
  • Ease of customization

When to Use Sharepoint Online

The online infrastructure is your best option if the following applies to your organizational needs:

  • Easy access to Sharepoint tools and collaboration apps
  • Reduced cost
  • Lack of infrastructure maintenance
  • Easy deployment of integrated tools
  • Ease of collaboration
  • Robust security protocols for data protection

Final Thoughts: Sharepoint On-Premise vs Online

Every business is unique and they have unique needs, too. The decision on which to choose between Sharepoint On-Premise vs Online boils down to your business goals and strategy. Take the above-listed factors into consideration when you decide to assess your requirements and match them with the tools that can deliver the functionalities you need. Visit Intlock to learn more.