Difference Between SharePoint Online and On-Premise: Which is Better (2023)

It's the clash of two SharePoint titans to determine which variant truly fulfills the collaboration needs of your organization.

By Henry Quill / May 24, 2023

Microsoft SharePoint has been around for nearly two decades, used as a trusted tool by countless organizations to easily store, organize, and share information. In recent years, Microsoft extended it as an online service, making it even easier for organizations to access, manage, and use it. Although both SharePoint Online and SharePoint On-Premise are similar in multiple ways, key differences set them apart. In this article, we will discuss the purpose of SharePoint Online and explore how it is different from the On-Premise version.

How is SharePoint Online Different from SharePoint?

Difference Between SharePoint Online and On-Premise: Purpose, Features & Benefits Explained

On one side, we have SharePoint Online, the cloud-based powerhouse that promises seamless accessibility and effortless collaboration. On the other side, we have SharePoint On-Premise, the traditional on-site solution that offers maximum control and customization. So, which path should you choose? As the cloud meets the server room, let’s witness the battle between SharePoint Online and On-Premise.

SharePoint Online	SharePoint On-Premise
Cloud-hosted	Self-hosted
Lower upfront cost	Higher upfront cost
Easier to setup	More complex setup
Low maintenance	High maintenance
High maintenance	Greater control
Easy scalability	Difficult scalability
Improved security	Security risk
Access from anywhere	Access from specific locations
Automated updates	Manual updates
Accessible from any device	Accessible from specific devices
Reduced infrastructure costs	Increased infrastructure costs
Usage of web parts is limited	Usage of web parts is unlimited
Easy integration with Office 365	Difficult integration with Office 365
Limited customization options	Greater customization options
Difficult backup and restore	Easy backup and restore
No need for server hardware	Need for server hardware
Low cost of ownership	High cost of ownership
Maximum 250,000 items per library	No restriction on items per library
No need for hardware upgrades	Need for hardware upgrades
No need for patching	Need for patching
Supports mobile devices	Doesn’t support mobile devices
Automated backups and automated failover	Manual backups and manual failover
Automated failover	Manual failover
Third-party applications are supported	Third-party applications are not supported
Low latency	High latency
Improved user experience	Poor user experience
Supports hybrid deployment	Doesn’t support hybrid deployment
No need for IT staff	Need for IT staff
Support for Data Loss Prevention (DLP)	No support for Data Loss Prevention (DLP)
Support for multi-factor authentication (MFA)	No support for multi-factor authentication (MFA)

Also Read: 21 Best Team Management Software

When to Use SharePoint Online

You should opt for SharePoint Online if:

You are looking for a more user-friendly and value-for-money option.
You want a reliable and secure system with regular updates.
You want low infrastructure and IT maintenance costs
You aim for fluent collaboration with external stakeholders such as clients, and partners.

When to Choose SharePoint On-Premise

You may choose SharePoint On-Premise if:

Your organization already has a significant investment in infrastructure, including servers, storage, and networking equipment.
You need more flexibility for customization and integration with existing on-premises systems.
Your organization demands high security and compliance requirements that mandate keeping sensitive data on-premises.
In cases where the network connectivity or bandwidth is limited.
You need a more cost-effective solution in the long term.

Based on the factors, you can decide between SharePoint Online and On-Premise.

Also Read: What are Disadvantages of SharePoint?

What is the Purpose of Sharepoint Online?

It provides a comprehensive and collaborative platform for organizations of all sizes to store, manage, and share information, applications, and documents. It is a cloud-based solution that enables teams to work together seamlessly, collaborate on projects, organize and manage workflows, and access data from anywhere, anytime, using a web browser or mobile device. This facilitates efficient communication, content management, and collaboration across departments and geographical locations. Additionally, document libraries, lists, team sites, and integration with other Microsoft 365 tools help businesses improve productivity and teamwork in a secure environment.

What are the Features of SharePoint Online?

Let’s take a look at key features of the online variant of SharePoint:

Site Collections: It supports multiple site collections, allowing you to organize and structure your data more efficiently.
Web Parts: It provides a variety of web parts to help you customize the look and feel of your site.
Lists and Libraries: This version allows you to create lists and libraries to store data and documents.
Wikis: It supports the creation of wikis, allowing users to collaborate in a single location.
Social Features: Moreover, it provides various social features, such as activity feeds, tagging, and micro-blogging.
Workflows: The online version of Share Point supports the creation of workflows to automate processes and help manage tasks.
Content Types: It allows you to create and manage content types, which can be used to categorize and organize data.
Document Management: It provides document management features, allowing users to store, manage, and access documents in a secure manner.
Search: It includes an advanced search engine to allow users to quickly find content.
User Permissions: It provides granular user permissions, allowing you to specify who has access to which data.
Auditing: It includes auditing capabilities, allowing administrators to track user activity.
Compliance: SharePoint Online supports compliance standards such as HIPAA, FERPA, and ISO 27001.
Security: It includes built-in security features, such as encryption, two-factor authentication, and extensive access control.
Office 365 Integration: It is tightly integrated with Office 365, allowing users to work with documents and collaborate in real time.
Mobile Access: SharePoint Online includes a mobile app for iOS and Android, allowing users to access their data from anywhere.
Video Streaming: It even supports video streaming, allowing users to share and view videos directly from their SharePoint site.
Collaboration Spaces: It allows for the creation of collaboration spaces, allowing users to work together on projects in a secure environment.
Blogging: Interestingly, it provides a blogging platform too thus allowing users to share their thoughts and ideas with others.
Synchronization: SharePoint Online supports synchronization, allowing users to access their documents and data from multiple locations.
Customization: It allows users to customize their sites with custom themes, navigation, and other features.
Forms & Templates: SharePoint Online includes a forms feature, allowing users to create and manage forms for data collection. It also provides templates, allowing users to quickly create sites and webpages with pre-built content.
InfoPath: It supports InfoPath, allowing users to create custom forms and workflows.
Business Intelligence: It provides business intelligence tools, allowing users to access and analyze data.
Reporting: This app allows users to generate reports and view data in various formats.

Also Read: 22 Best Client Management System Software

SharePoint List vs Excel Features Comparison

Here is a brief comparison of SharePoint list vs Excel features that helps you identify which tool is more suitable for your requirements.

SharePoint List	Excel
It supports document collaboration, data access and storage, and customization through metadata.	It supports calculations, graphing tools, pivot tables, and a macro programming language.
It allows users to collaborate on a single document or list item simultaneously.	It allows users to work on a single document or spreadsheet independently.
It provides a workflow feature to facilitate the process of managing documents.	It does not have a workflow feature.
It has a built-in search feature, allowing users to quickly find items in a list.	It does not have a built-in search feature.
It supports version control, which allows users to view, compare, and revert to earlier versions of an item.	It does not support version control.
It provides an audit log allowing users to view a list-related activity.	It does not have an audit log feature.
It offers flexible list views to display data in a variety of ways.	It offers a limited set of views.
It allows users to share list items with external users and manage their access permissions.	It does not allow users to share items with external users.
It allows users to create custom forms to capture data and easily view it as a list.	It does not allow users to create custom forms.
It provides integration with other Microsoft Office applications, such as Word and PowerPoint.	It is not integrated with other Microsoft Office applications.
It allows users to set up alerts to be notified when changes are made to list items.	It does not allow users to set up alerts.
It supports integration with third-party applications.	It does not support integration with third-party applications.
It has a built-in reporting feature, allowing users to generate reports on list data quickly.	It has a limited reporting feature.
It allows users to share list items with external users and manage their access permissions.	It does not allow users to share items with external users.
It offers a calendar view to quickly view list items in a calendar format.	It does not offer a calendar view.
It has a built-in task management feature for tracking and managing tasks.	It does not have a built-in task management feature.
It allows users to customize list items with metadata.	It does not allow users to customize list items.
It allows users to access and update list items from multiple devices.	It does not allow users to access and update list items from multiple devices.
It allows users to create custom views to display list items in a variety of ways.	It does not allow users to create custom views.
It lets users quickly export list items to other formats, such as Excel, PDF, or Word.	It does not allow users to quickly export list items to other formats.
It has a built-in timer feature for tracking time spent on a list item.	It does not have a built-in timer feature.
It allows users to assign tasks to other users.	It does not allow users to assign tasks to other users.
It allows users to track changes to list items over time.	It does not allow users to track changes to list items over time.
It allows users to create custom notifications to be sent when changes are made to list items.	It does not allow users to create custom notifications.
It has a built-in analytics feature, allowing users to generate reports and visualize data quickly.	It does not have a built-in analytics feature.

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In conclusion, SharePoint Online and On-Premise have unique strengths and limitations, making it important for organizations to evaluate their specific needs before deciding which platform to use. Before you decide, carefully consider all of these factors and choose the platform that aligns best with your organization’s goals and objectives.