SharePoint Online vs. SharePoint Server: Which One Fits Your Team?

Thinking about using SharePoint to handle all your business files, projects, or collaboration? You’re definitely not alone! But before you dive in, it’s smart to choose the right version for your team—and that means understanding the difference between SharePoint Online and SharePoint Server.

The Big Picture: What’s the Difference?

SharePoint Server
Imagine having SharePoint living right inside your own office building. You own the hardware, you’re in charge of updates, storage, security—you name it, you handle it. You and your IT team set the rules, control where everything lives, and tweak things however you want.

SharePoint Online
This one’s like renting a top-floor apartment in the Microsoft cloud. Microsoft handles the mechanics—servers, security, even user logins. You decide what you want built (how many sites, what they’re called, who gets access), but you don’t have to stress about the plumbing or electric work underneath. You pay a per-user fee and get all the latest perks automatically.

Key Differences to Think About

Hosting & Ownership

With SharePoint Online, you don’t need to worry about hardware or maintenance—Microsoft’s cloud does the heavy lifting. You get up-to-date security and easy sign-on, plus seamless ties to the rest of the Office family (Excel, Exchange, Word, Teams, and more). It’s painless, scalable, and you only pay for the users you need.

But… you do give up a little control. Data is stored “out there” on Microsoft’s servers. If you depend on old in-house databases or have big custom integrations, some things might not transfer smoothly.

Getting New Features

SharePoint Online is always up to date. As soon as Microsoft invents something new—shiny dashboards, integrations, or tools—you’ll get it, often before anyone running SharePoint Server. The flip side? Sometimes those updates can cause headaches for custom setups or workflows you’ve built in-house.

SharePoint Server lets you roll out updates on your schedule, but it usually means you have to wait longer for the coolest new tools.

Which One Is “Better”?

Honestly, there’s no one-size-fits-all answer.

• SharePoint Online is ideal for smaller teams or businesses who want a reliable, modern workspace without the burden of managing servers.
• SharePoint Server makes sense if you already have lots invested in IT staff and custom setups—or if you simply need to have everything under your own roof for compliance reasons.

If you’re somewhere in the middle or just not sure, that’s okay! A consulting group like eSoftware (that’s us!) can help you sort out what makes sense for your situation and even plan out a move if you need it.

Sharepoint Online vs Sharepoint Server Frequently Asked Questions

What is the main difference between SharePoint Online and SharePoint Server?

SharePoint Server is a locally-hosted, on-premises platform managed by your own IT team, including all aspects of server architecture, storage, and software updates. SharePoint Online, in contrast, is a cloud-based offering managed by Microsoft, where infrastructure, updates, and most maintenance are handled for you. The choice impacts cost, control, scalability, and integration.

What are the hosting differences between SharePoint Online and SharePoint Server?

With SharePoint Online, businesses avoid managing hardware, resources, and backups, benefiting from Microsoft’s global data centers, security, and single sign-on capabilities. SharePoint Server requires investment in physical or virtual server infrastructure, and IT teams must oversee maintenance, availability, backups, and disaster recovery.

How do updates and new features differ between SharePoint Online and SharePoint Server?

SharePoint Online receives the latest features and updates automatically from Microsoft, sometimes offering capabilities even before new on-premises versions are released. In contrast, SharePoint Server updates must be manually applied by your IT staff, and upgrades to major new releases require project planning and potential migrations.

Which is better for my business: SharePoint Online or SharePoint Server?

The answer depends on your organization’s size, needs, and IT strategy. Small and medium businesses needing strong document management and easy integration often find SharePoint Online ideal. Large enterprises with heavy customization, strict data residency, or infrastructure needs may find SharePoint Server more appropriate.

What is the cost structure for SharePoint Online versus SharePoint Server?

SharePoint Online is typically licensed per user per month, allowing you to scale costs according to actual users. SharePoint Server involves up-front software, hardware, and maintenance costs but may offer lower long-term costs for extremely large user bases or specialized use cases.

What are the advantages of SharePoint Online?

Advantages include reduced IT burden, automatic updates, access to leading cloud security and compliance standards, seamless integration with the Office 365 suite, flexible per-user pricing, and the ability to quickly deploy or scale environments.

What are the disadvantages of SharePoint Online?

Some organizations are concerned about data autonomy and residency, integration challenges with legacy systems, and the possibility that frequent updates might disrupt customizations or integrations.

What are the advantages of SharePoint Server (on-premises)?

SharePoint Server allows maximum control over architecture, configuration, and security. It’s ideal for organizations with complex custom solutions, specific compliance/regulatory needs, or integration requirements not currently supported by SharePoint Online.

Will I lose customizations if I move from SharePoint Server to SharePoint Online?

Certain custom solutions built for SharePoint Server may not migrate seamlessly to SharePoint Online due to architectural and feature differences. It’s important to audit your customizations during a migration planning process.

How can I decide which SharePoint platform is right for me?

Consulting with experts like eSoftware Associates can help assess your business requirements, IT resources, budget, and growth plans. They offer free consultations and deep expertise in both SharePoint Online and SharePoint Server migrations and management.

Need a Little Help Deciding?

Don’t lose sleep over it—reach out for a free consultation. We’ll help you map out exactly what you need, whether you’re leaning cloud, sticking in-house, or just need some straight answers.

Call us at 1-800-682-0882 or contact us.