Businesses are always looking to enhance their communication strategies and integrate smarter workflow and data-sharing processes. Microsoft, through its cloud-based application SharePoint Online and localized SharePoint On-Premise, provides organizations with modern and competitive digital communication and collaboration solutions.

But, often, businesses don’t know which of these two applications would suit them best and what implications it may have on their operations. This has led to delays in moving workloads to the cloud.

In this post, we’ll look at the  differences between SharePoint Online and On-Premise and when you should choose either for your business.

But first, let’s learn the basics of Microsoft SharePoint.

What Is Microsoft SharePoint?

SharePoint is a highly flexible platform that provides an information focal point for collaborations and document management.

There are two variations of SharePoint: SharePoint Online and SharePoint On-Premise. They both provide unique functionalities for any organization looking to enhance productivity and innovation.

Now let’s take a closer look at SharePoint Online vs. On-Premise to understand what they offer your business.

SharePoint Online

SharePoint Online is a powerful web-based application, which comes as part of the Microsoft 365 Office suite, that makes it possible for seamless collaboration and information exchange across an organization.

Put simply, it’s the cloud version of the SharePoint platform and is licensed on a per-user basis.

SharePoint Online is available for purchase as a standalone product or as part of the Microsoft 365 plans.

The options are:

  • SharePoint Online (Plan 1)

It’s ideal for small and medium-sized businesses and comes with 1TB of OneDrive storage, safe file sharing both on-site and off-site, access to Microsoft Lists, and a host of organization, content creation, and sharing tools.

  • SharePoint Online (Plan 2)

This plan comes with fully featured enterprise-level capabilities, including unlimited personal cloud storage and DLP to monitor and protect sensitive information.

  • Office 365 E3

This plan encompasses all the Office applications, plan 2 features, and more.

SharePoint On-Premise

SharePoint On-Premise is an in-house version of SharePoint installed on your local servers. Your IT department runs the application, makes the updates, and can add features or customization to the application.

The intranet sites are licensed using a Server/CAL (Client Access License) model. For every running of the software, SharePoint Server 2019 is required, and any person or device should provide a CAL to gain access to a SharePoint server.

The packages are:

  • SharePoint Standard CAL

The Standard CAL provides the core competencies of SharePoint, including a single infrastructure for all your organization’s sites, an integrated collaboration forum, and a mass enterprise content management system (CMS).

  • SharePoint Enterprise CAL

The Enterprise CAL provides all the SharePoint capabilities mentioned above and more, including Access and InfoPath services and business intelligence perks such as Excel Service, Power View, PerformancePoint Services, and Visio Services.

Differences Between SharePoint Online and SharePoint On-Premise

What considerations do you need to make to choose the right version of SharePoint?

Here are the key differences you need to consider when comparing SharePoint Online vs. SharePoint On-Premise:


SharePoint Online comes as a component of the Microsoft 365 package and is charged per user, making it a cheaper option to install. Cost considerations to run SharePoint On-Premise include purchase, maintenance, licenses, and other expenses.

Dedicated Infrastructure

SharePoint Online does not require special hardware and software infrastructure. It’s available within the Microsoft 365 plans. SharePoint On-Premise requires the purchase of specialized hardware and software infrastructure in your organization.


Microsoft provides the latest updates for SharePoint Online. For SharePoint On-Premise, your IT department is responsible for all patches and updates.

Data Backup

Microsoft provides data backups for SharePoint Online users with certain restrictions. For SharePoint On-Premise, the organization’s IT administrators are required to develop, test, and maintain backup systems to secure data.

Data Storage

For SharePoint Online, there is cloud-based data storage. On SharePoint On-Premise, you store your data on your local network.

Data Security

Microsoft deploys robust protocols for SharePoint Online to keep the data up-to-date according to industry standards. For SharePoint On-Premise, your IT team is responsible for data security.


SharePoint Online offers few customizations, and to commence any customization process, the user is first required to contact the Microsoft support team. For SharePoint On-Premise, you have the freedom to make any customizations and add features you need.

When to Use SharePoint Online

SharePoint Online is the best choice if you would like to:

  • Reduce costs of setting up dedicated infrastructure and IT maintenance
  • Get SharePoint in the shortest time possible
  • Set up a scalable intranet for your business
  • Receive stable data security systems and updates
  • Connect with external users to open up team collaborations and innovation
  • Have a user-friendly application that integrates into existing applications

When to Choose SharePoint On-Premise

SharePoint On-Premise is an ideal choice if you:

  • Have an established on-premise infrastructure
  • High compliance requirement constraints
  • High customization demands
  • Prefer greater control over your SharePoint farms
  • Have larger storage space than what Microsoft provides
  • Prefer an intranet that’s accessible only to your business network

Final Thoughts

Choosing between SharePoint Online and SharePoint On-Premise can be daunting for many businesses, especially if they don’t know what both applications bring on board. The ultimate choice depends on your needs, requirements, and business goals. Both applications provide unique multipurpose features, and comparing them in detail, as we have done above, will assist you in choosing the right solution for your organization.

Upon selecting your preferred SharePoint platform, consider engaging reputable Sharepoint consultants to guarantee a seamless migration. We offer the most professional Microsoft services, including deploying and implementing Microsoft SharePoint applications, Azure, and Microsoft Teams. We work with you to ensure you get the best technology solutions to help you achieve your goals and secure your place in the marketplace.

We not only assist you with the migration process but also offer additional support via our managed IT services to make sure you get the most value out of the application in all areas, including communication, strategy, and overall organizational scalability. Contact Softlanding today to get the best Microsoft SharePoint solutions services.

Written By:


Softlanding is a long-established IT services provider of transformation, professional services and managed IT services that helps organizations boost innovation and drive business value. We are a multi-award-winning Microsoft Gold Partner with 13 Gold Competencies and we use our experience and expertise to be a trusted advisor to our clients. Headquartered in Vancouver, BC, we have staff and offices in Toronto, Montreal and Calgary to serve clients across Canada.

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