SharePoint Online vs On-Premise - sounds like something only an IT manager would care about, right?
But if you’re running an SME, this decision can shape how your team collaborates, shares files, and keeps data safe.
It’s not just about where your files live.
It’s about control vs convenience.
Cost now vs cost later.
Whether you want to be the one fixing things when they go wrong - or prefer Microsoft to handle that while you enjoy a cuppa ☕
According to Microsoft, more than 200,000 organisations and 190 million people use SharePoint for intranets, team sites, and content management.
This article breaks down the pros and cons in plain English, so you can make the right call without needing a computer science degree.
SharePoint Online vs On-Premise - Why does this comparison matter?
Let’s be honest - most SMEs don’t have the luxury of a full-blown IT department.
So the platform you choose needs to fit your team, your budget, and your ambitions.
Pick wrong, and you might end up firefighting permissions issues, dealing with sluggish performance, or spending more on upgrades than you saved upfront.
But get it right?
You’ll have a system that actually makes work easier - not harder 💡
This isn’t just a tech decision.
It’s a business one.
Quick comparison
| Feature | SharePoint On-Premise | SharePoint Online |
| Cost | Large upfront cost, plus hardware | Monthly/annual subscription (Opex) |
| Maintenance | Managed in-house | Handled by Microsoft |
| Scalability | Limited by physical infrastructure | Easily scales with business needs |
| Storage | Depends on local hardware | Cloud-based, with scalable limits |
| Security | Full control (but full responsibility) | Microsoft-managed security updates |
| Customisation | Greater flexibility for tailored features | Some limitations, especially for deep custom dev |
| Updates | Manual updates required | Automatic updates included |
| Access & Mobility | Office-bound unless configured for remote | Accessible anywhere via web |
| Compliance | Full control for strict regulations | Certifications built-in (but some limits on control) |
Detailed breakdown
🏗️ Infrastructure & Maintenance
On-Prem
You're responsible for everything - from servers to software updates.
That’s great if you want full control, but it also means you’ll need the skills (or a trusted IT partner) to keep the lights on.
Online
Microsoft takes care of the plumbing.
Updates, patches, and uptime are all part of the package.
You just log in and get to work.
💷 Cost & Licensing
On-Prem
Big initial spend, plus ongoing hardware, energy, and support costs.
It's Capex-heavy.
Online
A rolling monthly fee.
It's Opex, and easier to predict, scale, and budget.
Just be mindful of storage add-ons or advanced license tiers that can sneak up on you.
📦 Scalability & Storage
On-Prem
Storage is tied to your hardware.
Need more?
Time to order another server (and wait).
Online
Storage scales much more easily - just add what you need via your Microsoft plan.
🔐 Security & Compliance
On-Prem
If you’ve got tight data governance needs, this might be the winner - you control exactly where your data lives.
But that control comes with responsibility.
Online
Offers top-tier, regularly updated security from Microsoft, plus built-in compliance certifications like ISO and GDPR-ready options.
🧩 Customisation & Integration
On-Prem
Wins for deep customisation.
If your developers need to plug in legacy systems or build niche features, it’s more flexible.
Online
Still supports custom dev, but with guardrails.
It plays much nicer out of the box with tools like Teams and Power Automate.
👩💻 Support & Usability
On-Prem
Support is on you (or your IT provider). It’s more complex and often slower to fix.
Online
Comes with Microsoft support, a cleaner interface, and the comfort of knowing you’re always on the latest version.
Less faff, more focus.
SharePoint Online vs On-Premise - Which one’s right for you?
If you’re a business with in-house IT expertise, strict compliance requirements, or legacy systems you can’t easily move - On-Prem might be your best bet.
You get full control, at the cost of complexity and ongoing maintenance.
On the other hand, if you want something more nimble, scalable, and low-fuss - SharePoint Online is hard to beat.
It’s perfect for remote or hybrid teams, rapid scaling, and tighter budgets that prefer predictable monthly costs over big upfront investments.
Still unsure? 🤔
Think about how hands-on you want to be with your IT - and whether your infrastructure needs to evolve quickly with your business.
Common Pitfalls to Avoid with SharePoint Online vs On-Premise
Let’s not sugar-coat it - both options have their traps.
Online
- Storage surprises - The base plans are generous, but if your team loves uploading videos or chunky design files, storage upgrades can bite.
- Customisation limits - Not everything from On-Prem transfers neatly. Some advanced dev options just aren’t available.
- Connectivity dependency - No internet? No access. For rural offices or spotty networks, this could be a deal-breaker. Although, documents can be made offline, with changes updated once an internet connection is made.
On-Prem
- Hidden hardware costs - That "one-off" server bill can snowball with cooling, backups, and failover systems.
- Upgrade lag - You might find yourself stuck with outdated features or security risks if updates aren’t managed properly.
- Remote access headaches - Setting up secure remote access isn’t always straightforward (or cheap).
SharePoint On-Premise or Online? Here’s what we usually recommend
We’ve worked with businesses on both sides of the SharePoint fence - and here’s what we’ve seen.
SMEs that go with SharePoint On-Prem usually already have a dedicated IT team, strict data control needs (think finance or legal), or long-standing custom workflows they can’t ditch overnight.
They know they’ll need to roll up their sleeves (or pay someone who will).
SharePoint Online, on the other hand, tends to win over newer, fast-moving businesses.
They want low maintenance, fast setup, and features that just work - without needing an IT translator.
It’s also ideal for hybrid teams who don’t fancy dialling into a VPN just to check a spreadsheet.
Our honest take?
If you're not in love with managing servers, SharePoint Online is probably the path of least resistance - and the most futureproof.
Final Thoughts
Still undecided on SharePoint Online vs On-Premise?
You’re not alone - and that’s exactly why this decision needs a bit of thinking.
On-Prem gives you ultimate control, but it comes with more responsibility (and usually, more bills).
Online offers simplicity, scalability, and flexibility - but might not suit businesses with niche compliance or infrastructure needs.
The good news? 🎉
You don’t have to figure it all out yourself.
Whether you’re upgrading, migrating, or starting fresh, we’ll help you make sense of it all - based on how your business actually works, not just what the tech specs say.
FAQs
Is SharePoint Online secure enough for sensitive business data?
Yes.
Microsoft SharePoint Online includes enterprise-grade security, data encryption, compliance certifications (like ISO 27001 and GDPR), and advanced identity management.
You get automatic updates and built-in threat protection as part of Microsoft 365.
Can I migrate from SharePoint On-Premise to SharePoint Online?
Absolutely.
Many businesses move to Online to reduce overhead and simplify collaboration.
Migration tools (including Microsoft’s own) and partners like us can help make it a smooth transition.
Is SharePoint Online better for small businesses?
In most cases, yes.
It’s lower maintenance, cost-predictable, and scales with your team.
Unless you have specific compliance or customisation needs, Online is typically the simpler, smarter choice.
What happens if Microsoft 365 goes down; do we lose access to SharePoint Online?
During a rare Microsoft outage, you might temporarily lose access.
However, offline sync via OneDrive can provide local access to recent files.
Microsoft also guarantees 99.9% uptime in its SLA.
This equates to a maximum of 8 hours, 45 minutes, and 57 seconds of downtime in a year.
What Microsoft 365 plan includes SharePoint Online?
SharePoint Online comes with most Microsoft 365 business plans, including Business Basic, Business Standard, and Enterprise E3/E5.
You can also buy it as a standalone plan if needed.
