SharePoint Online vs On Premise – Which is Better in 2024?

Are you struggling to decide between SharePoint Online vs On Premise for your organization’s digital needs? You’re not alone. According to Microsoft, more than 200,000 organizations and 190 million people rely on SharePoint, but the choice between these two options can be overwhelming. The wrong decision can lead to security risks, wasted resources, and frustrated employees. It’s a critical choice that can make or break your organization’s productivity and collaboration.

In this blog, we’ll simplify the complex, exploring the key differences, benefits, and limitations of SharePoint Online vs SharePoint On Premise, so you can make an informed decision that drives business success in 2024 and beyond.

What is SharePoint?

SharePoint is a powerful web-based platform developed by Microsoft that helps people work together more effectively. It allows teams to create websites where they can share documents, manage projects, and collaborate on tasks. Think of SharePoint as a digital workspace where you can store, organize, and access important information from any device, whether you’re at the office or on the go.

What is SharePoint Online?

SharePoint Online is the cloud-based version of SharePoint, offered by Microsoft as part of the Office 365 suite. It provides all the powerful features of SharePoint without the need for managing your own servers. With automatic updates and robust security measures, SharePoint Online ensures that organizations can focus on their work without worrying about maintaining servers or dealing with software updates.

What is SharePoint On Premise?

SharePoint On-Premise is also a part of Microsoft’s SharePoint platform that is hosted on an organization’s own servers and infrastructure, rather than in the cloud. This setup gives companies complete control over their SharePoint environment, including customization, security, and compliance.

With SharePoint On-Premise, organizations can integrate the platform with other in-house systems and tailor it to their specific needs and requirements. While it offers the same core functionalities as SharePoint Online—such as document management, collaboration, and project coordination—it requires a dedicated IT team to manage, maintain, and update the servers and software.

This option is often chosen by organizations that need to comply with strict regulatory standards or that have specific data governance policies that require keeping data on their own premises.

SharePoint Online vs On Premise Comparison – Which is Better in 2024?

Feature/Aspect SharePoint Online SharePoint On-Premise
Deployment SharePoint Online is a cloud-based solution hosted by Microsoft. It eliminates the need for physical servers and infrastructure on the client side, providing a streamlined setup and quick deployment. SharePoint On-Premise requires the organization to host the platform on its own servers. This means handling physical hardware, networking, and server maintenance. Deployment can be more complex and time-consuming.
Infrastructure Management Microsoft handles all infrastructure management, including server maintenance, updates, and scaling. This reduces the IT overhead for the client and ensures that the latest infrastructure standards are met. The organization’s IT team is responsible for managing all aspects of the infrastructure, including server maintenance, upgrades, and scalability. This requires significant IT resources and expertise.
Cost Structure SharePoint Online operates on a subscription-based model, with costs spread over time. Pricing typically includes maintenance, updates, and support, making budgeting predictable. SharePoint On-Premise involves a one-time licensing fee for the software, along with ongoing costs for server maintenance, hardware upgrades, and IT staff. The upfront costs can be significant, but there are no recurring subscription fees.
Access Users can access SharePoint Online from anywhere with an internet connection, enabling remote work and collaboration across different locations. Access to SharePoint On-Premise is generally limited to the organization’s network, unless additional configurations are made for remote access, such as VPNs or external access gateways.
Updates and Upgrades Updates and upgrades are automatically handled by Microsoft. Users always have access to the latest features and security enhancements without needing to manage the update process. Updates and upgrades must be manually managed by the organization’s IT team. This can lead to delays in implementing new features and increased risk if security patches are not promptly applied.
Scalability SharePoint Online offers easy scalability. Organizations can quickly adjust their subscription to add more users or increase storage as needed, without worrying about physical server capacity. Scalability depends on the organization’s hardware capabilities. Adding more users or storage often requires purchasing and configuring additional servers, which can be time-consuming and costly.
Customization Customization options are more limited in SharePoint Online, as certain configurations and custom solutions are restricted by the cloud environment. However, it supports modern development frameworks and integrations. SharePoint On-Premise allows for extensive customization, including deep integration with other on-premise systems and bespoke development. Organizations have full control over the environment and can tailor it to specific needs.
Integration SharePoint Online integrates seamlessly with other Microsoft 365 services like Teams, OneDrive, and Office Online, providing a unified ecosystem for collaboration and productivity. While SharePoint On-Premise can integrate with other systems, it requires more configuration and maintenance effort. Integration with cloud services may also necessitate hybrid setups.
Data Storage Data is stored in Microsoft’s global data centers, with redundancy and failover mechanisms to ensure high availability and data protection. Data is stored on the organization’s own servers, giving them full control over data location and management. This can be crucial for compliance with certain regulatory requirements.
Security Microsoft provides enterprise-grade security, including encryption, threat detection, and regular audits. Security is managed by Microsoft’s dedicated teams, ensuring robust protection. The organization is responsible for implementing and managing security measures. This includes setting up firewalls, intrusion detection systems, and regular security audits, requiring significant expertise and resources.
Compliance Microsoft ensures that SharePoint Online meets various industry standards and regulatory requirements, such as GDPR, HIPAA, and ISO certifications. Compliance features are built-in and updated regularly. Compliance management is the responsibility of the organization. They must ensure that their SharePoint environment meets the necessary regulatory standards, which can be complex and require specialized knowledge.
Backup and Recovery Backup and disaster recovery are managed by Microsoft, with built-in redundancy and automated backup processes. This provides peace of mind and reduces the burden on IT staff. The organization’s IT team must implement and manage backup and disaster recovery plans. This includes regular backups, off-site storage, and recovery testing to ensure data can be restored in case of failure.
Performance Performance depends on the user’s internet connection and Microsoft’s cloud infrastructure. Generally, SharePoint Online offers high performance with global content delivery networks and optimized data centers. Performance is dependent on the organization’s network infrastructure and server capacity. Ensuring high performance may require significant investment in hardware and network optimization.
Support Support is included in the subscription, provided by Microsoft. This includes technical support, troubleshooting, and assistance with platform features. Support is provided by the organization’s IT team or third-party service providers. This requires maintaining a skilled support staff or contracting with external experts, which can increase costs and complexity.
Feature Set SharePoint Online users have access to the latest features and innovations as soon as they are released by Microsoft. This ensures that the platform stays current with new technologies and capabilities. The feature set depends on the version of SharePoint installed. Organizations may miss out on newer features unless they perform regular upgrades, which can be resource-intensive.
Mobile Access Supported via mobile apps and web browsers, allowing users to access and interact with SharePoint content on the go. The mobile experience is optimized and regularly updated by Microsoft. Mobile access is supported, but the quality and functionality depend on the organization’s configuration and maintenance of mobile access solutions. Custom mobile apps may be required for specific needs.
Compliance with Internal Policies Organizations must work within Microsoft’s compliance framework, which may limit certain custom policies. However, it still offers robust compliance options for many standards. SharePoint On-Premise can be fully customized to meet specific internal compliance and governance policies, providing greater flexibility to align with unique organizational requirements.
Disaster Recovery Microsoft manages disaster recovery with automatic failover and data redundancy. Organizations benefit from high availability and resilience without additional setup. Disaster recovery planning and implementation are the responsibility of the organization’s IT team. This includes setting up backup sites, replication, and regular testing to ensure readiness for potential disasters.

Benefits of SharePoint Online vs On Premise

Let’s see what are the benefits of SharePoint online vs on premise. Both versions of SharePoint offer robust features for collaboration, document management, and project coordination, but they satisfy to different organizational needs. Understanding the benefits of each can help you decide which version best aligns with your organization’s goals and resources.

Benefits of SharePoint Online

  1. Accessibility Anywhere: SharePoint Online allows users to access their documents and collaborate from anywhere with an internet connection. This flexibility supports remote work and enhances productivity by enabling team members to work from any location, whether they’re in the office, at home, or on the go.
  2. Automatic Updates and Maintenance: Microsoft manages all updates and maintenance for SharePoint Online, ensuring that users always have access to the latest features and security enhancements. This eliminates the need for organizations to handle complex upgrade processes and reduces the risk of running outdated software.
  3. Cost-Effective: With a subscription-based pricing model, SharePoint Online offers a predictable cost structure that includes maintenance, support, and updates. This can be more cost-effective for many organizations compared to the significant upfront investment and ongoing maintenance costs associated with an on-premise solution.
  4. Seamless Integration with Microsoft 365: SharePoint Online integrates seamlessly with other Microsoft 365 services such as Teams, OneDrive, and Office Online. This integration creates a unified and efficient ecosystem for collaboration and productivity, allowing users to easily share documents, communicate, and manage tasks within a familiar interface.
  5. Enhanced Security and Compliance: Microsoft provides enterprise-grade security for SharePoint Online, including data encryption, threat detection, and compliance with various industry standards like GDPR and HIPAA. This robust security framework helps protect sensitive information and ensures that organizations meet regulatory requirements without needing extensive in-house expertise.

Benefits of SharePoint On Premise

  1. Customization: SharePoint On-Premise offers organizations full control over their environment, allowing for extensive customization to meet specific business needs. From custom workflows to tailored branding, organizations can create a SharePoint environment that aligns perfectly with their unique requirements and internal processes.
  2. Data Governance and Compliance: Hosting SharePoint On-Premise enables organizations to maintain strict control over their data, ensuring compliance with industry regulations and internal policies. This level of control is crucial for industries with stringent compliance requirements, such as healthcare and finance.
  3. Performance Optimization: SharePoint On-Premise enables organizations to optimize performance according to their specific hardware and network capabilities. With dedicated servers and resources, IT teams can fine-tune performance settings and allocate resources as needed to ensure optimal performance for users.
  4. Offline Access: Unlike SharePoint Online, which relies on an internet connection, SharePoint On-Premise provides the option for offline access to documents and resources. This is especially beneficial for users in remote locations or with limited internet connectivity, ensuring continuous access to critical information.
  5. Long-Term Cost Efficiency: While SharePoint On-Premise typically involves higher upfront costs for hardware, licensing, and implementation, it can offer long-term cost efficiency for organizations with stable infrastructure and predictable usage patterns. Once the initial investment is made, ongoing costs may be lower compared to recurring subscription fees for cloud-based solutions.

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Limitations of SharePoint Online vs On Premise

Now let us see what the limitations of SharePoint Online vs SharePoint on premise are. While SharePoint Online offers the convenience of cloud-based collaboration and storage, it also comes with certain limitations that may not be ideal for all organizations. On the other hand, SharePoint on premise provides more control and customization options but requires significant infrastructure investments and maintenance efforts. Understanding these limitations is crucial in making an informed decision about which SharePoint deployment model best suits your organization’s needs.

Limitations of SharePoint Online

  1. Customization Restrictions: SharePoint Online has limitations on customization compared to its SharePoint on-premise. Certain advanced customization options, such as server-side code and full trust solutions, are restricted in the cloud environment. This can limit the ability to modify SharePoint to specific organizational requirements.
  2. Dependency on Internet Connection: SharePoint Online relies on an internet connection for access and functionality. If users experience poor internet connectivity or downtime, it can delay productivity and access to critical documents and resources.
  3. Storage Quotas and Costs: SharePoint Online imposes storage quotas based on subscription plans, and exceeding these quotas may result in additional costs. Organizations with large amounts of data or frequent file uploads may need to carefully manage their storage usage to avoid unexpected expenses.
  4. Limited Control Over Updates: While automatic updates in SharePoint Online ensure access to the latest features and security enhancements, organizations have limited control over the update process. Updates are applied by Microsoft, and there may be instances where new features or changes disrupt existing workflows or customizations.
  5. Data Location and Compliance Concerns: SharePoint Online stores data in Microsoft’s global data centers, which may raise concerns about data sovereignty, compliance, and regulatory requirements. Organizations operating in highly regulated industries or regions with strict data residency laws may face challenges ensuring compliance with data protection regulations.

Limitations of SharePoint On Premise

  1. Infrastructure Management: SharePoint On-Premise requires organizations to manage their own infrastructure, including hardware, networking, and server maintenance. This can be resource-intensive and costly, especially for smaller organizations or those lacking dedicated IT resources.
  2. Scalability: Scaling SharePoint On-Premise to accommodate growth can be challenging. Adding more users or increasing storage capacity often requires purchasing and configuring additional servers, which can be time-consuming and costly.
  3. Customization Complexity: While SharePoint On-Premise offers extensive customization options, implementing custom solutions can be complex and require specialized technical expertise. Customizations may also complicate the upgrade process, leading to compatibility issues and potential downtime.
  4. Limited Accessibility: Access to SharePoint On-Premise is typically limited to the organization’s network, making it less accessible for remote or mobile users. Providing secure remote access often requires additional configurations such as VPNs or external access gateways.
  5. Dependency on Manual Updates: Unlike SharePoint Online, which receives automatic updates from Microsoft, SharePoint On-Premise requires manual updates and patches to be applied by the organization’s IT team. This can lead to delays in implementing new features or security fixes and increases the risk of vulnerabilities.

When Should I Choose SharePoint Online?

You should choose SharePoint Online when you prioritize scalability and cost savings, desire automatic updates and maintenance, need to meet industry-specific security standards, require easy expansion for external users, or want to continuously access new tools and functions. This option is ideal for organizations that want to minimize IT maintenance, ensure security compliance, and stay up-to-date with the latest collaboration features without significant upfront investments.

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When Should I Choose SharePoint On Premise?

You should choose SharePoint On-Premise when you need more control over your environment, require customization to meet specific organizational needs, or have strict compliance or security requirements. This option is ideal for larger organizations with established IT infrastructure, as it allows for full control over the underlying server systems and can support an unlimited amount of SharePoint data with the right hardware infrastructure. Additionally, SharePoint On-Premise is a good choice if you do not have adequate bandwidth for your internet connection or prefer to keep data on your premises for compliance requirements.

How Can NGenious Solutions Help?

Still struggling to decide between SharePoint Online and SharePoint On-Premise for your organization? Do you need expert guidance to maximize the benefits of your chosen platform? Look no further than NGenious Solutions, a leading provider of SharePoint consulting services.

Our team of SharePoint experts can help you:

  • Assessing your needs and recommending the best deployment model
  • Implementing and configuring your SharePoint environment
  • Customizing and integrating with other tools
  • Training and supporting your team

We offer premium SharePoint managed support services, including migration and integration consulting, to ensure a seamless transition and optimal performance. Don’t let the complexity of SharePoint hold you back. Partner with NGenious Solutions today and unlock the full potential of SharePoint for your organization.

Reach Out to NGenious Solutions for SharePoint Expertise!



In conclusion, SharePoint Online and SharePoint On-Premise are two powerful collaboration platforms that cater to different organizational needs. SharePoint Online offers a cloud-based, subscription-based service with automatic updates, scalability, and cost-effectiveness, making it ideal for businesses that require flexibility and ease of use.

On the other hand, SharePoint On-Premise provides more control over security, compliance, and customization, making it suitable for organizations with specific needs or those that want complete control over their data. Ultimately, the choice between SharePoint Online and SharePoint On-Premise depends on your organization’s unique situations, including business continuity, compliance standards, information security, and digital transformation.

FAQs on SharePoint Online vs On Premise

1. What is the difference between SharePoint on-premises and SharePoint online?

SharePoint on-premises is installed and managed on your organization’s own servers, offering full control and customization. SharePoint Online is a cloud-based service, hosted and managed by Microsoft, providing scalability, automatic updates, and lower maintenance costs.

2. What is the cost of SharePoint Online vs On Premise?

SharePoint Online is a subscription-based service with a flat-rate license, automatic updates, and no upfront infrastructure costs. SharePoint On-Premise requires an upfront license fee, infrastructure costs, and IT team maintenance.

3. How does the security of SharePoint Online vs On Premise?

SharePoint Online offers enterprise-grade security, including data encryption, two-factor authentication, and regular security updates, all managed by Microsoft. SharePoint On-Premise security is managed internally, requiring your organization to implement and maintain its own security measures.

4. How does the performance of SharePoint Online vs On Premise?

SharePoint Online provides scalable, high-performance infrastructure, ensuring fast access and reliability, managed by Microsoft. SharePoint On-Premise performance depends on your organization’s internal infrastructure, which can be optimized for better performance.