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SharePoint vs. SharePoint Online: A Full Comparison

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SharePoint is a document sharing and collaboration platform developed by Microsoft. The first version of SharePoint was released back in 2001 as an on-premises version. Then, in 2011, Microsoft released SharePoint Online and Microsoft Office 365. Following the release, SharePoint Online was not particularly popular, but after a spirited promotion campaign by Microsoft, it gained traction among users, and nowadays it is widely used.

So, what is the current version of SharePoint and what is the difference between SharePoint Online and SharePoint 2016? Which version is better for your organization – SharePoint on-premises or SharePoint Online? This blog post explains both SharePoint versions to answer your questions and help you make the right choice.

SharePoint Versions

SharePoint on-premises is also called in-house SharePoint. SharePoint Server is installed on physical servers in your office or data center.

The following is the list of current and legacy versions of SharePoint Server:

  • SharePoint 2001 (support ended)
  • SharePoint 2003 (support ended)
  • SharePoint 2007 (support ended in October 2017)
  • SharePoint 2010 (support ended in October 2020)
  • SharePoint 2013 (support will be terminated in 2023)
  • SharePoint 2016 (support will be terminated in July 2026)
  • SharePoint 2019

As you can see, each on-premises version of SharePoint is supported for about 10 years. During the official support period, security updates and patches are provided. You can continue to use SharePoint Server after the support period is over, but you will no longer receive new patches.

Starting from SharePoint 2016, a hybrid deployment model is supported. You can use both SharePoint on-premises and SharePoint Online concurrently and synchronize them. It is also possible to deploy SharePoint in Azure, Microsoft’s cloud computing platform.

SharePoint Online is a cloud version of SharePoint Server that supports multi-tenancy. The former is part of Office 365, which was recently renamed to Microsoft 365. However, the versions and build numbers are not mentioned in the product name, unlike SharePoint Server and Microsoft Office on-premises. SharePoint Online is part of the Office 365 suite of apps and services.

Examples of Office 365 versions:

  • January 8, 2020, Version 1912 (Build 12325.20288)
  • January 30, 2020, Version 2001 (Build 12430.20184)
  • March 10, 2020, Version 2002 (Build 12527.20278)
  • September 09, 2020, Version 2008 (Build 13127.20408)
  • October 08, 2020, Version 2009 (Build 13231.20368)

So, how does SharePoint work? To learn more, read our introductory post where we compare SharePoint Online with SharePoint Server 2019.

Infrastructure and Hosting

You need physical servers to deploy SharePoint Server 2019. A farm topology is used to run SharePoint Server. A farm-based architecture requires a farm, which is a collection of servers hosting SharePoint Server. The farm’s size depends on the number of active users, the amount of stored data, average load and request frequency. Your company’s corporate network is used to run an on-premises version of SharePoint, such as SharePoint Server 2019. Your company’s IT support team and system administrators will be in charge of maintaining these physical servers.

If you want to use SharePoint Online, you will not need to install anything. When using SharePoint Online, the software runs in the cloud in Microsoft’s data centers. The only thing you need to use SharePoint Online is a paid subscription plan and an internet connection.

Installation

As mentioned above, you don’t need to install SharePoint if your company uses SharePoint Online in Microsoft Office 365. If you want to install SharePoint 2019, you will have to install and configure Microsoft SQL Server.

The list of requirements to deploy SharePoint 2019 is quite long. Let’s take a brief look at the main requirements:

  • 8-core 64-bit CPU, 16 GB of RAM, 80 GB for the system drive and additional storage for data (for MS SQL Server)
  • 4-core 64-bit CPU, 24 GB of RAM, 80 GB for the system drive and 100 GB on the second drive (SharePoint Server)
  • Windows Server 2016 or Windows Server 2019 Standard or Datacenter with Desktop Experience
  • MS SQL Server software requirements: MS SQL Server 2016 RTM, MS SQL Server 2017 RTM, MS SQL Server 2019 or newer version that supports database compatibility level 130
  • Microsoft .NET Framework version 4.7.2
  • IIS web server
  • Active Directory Server in your network

You can deploy SharePoint on one server (a single-server farm) and later add more servers to the farm.

Updates and New SharePoint Features

When using SharePoint 2019, the system administrator should perform maintenance and install security patches and updates. The system administrator has full control over SharePoint, related apps and the infrastructure.

On the other hand, with SharePoint Online, all software updates and security patches are installed automatically shortly after they are released by Microsoft. The speed of applying software updates to your Microsoft Office 365 account depends on the update channels chosen for your Office 365 subscription plan. The advantage of automatic updates in SharePoint Online is that security issues are fixed as soon as possible. The disadvantage of automatic updates is that if an update has bugs, it can cause issues and unstable work of SharePoint and related apps. Periodically, Microsoft improves its online services and apps and releases new SharePoint Online features.

Integration

SharePoint Server 2019 provides integration with Microsoft Project Server 2019, Power Apps, Power Automate and Power BI. Power Apps and Power Automate need to be configured via a data gateway to connect data in the cloud with on-premises data. Integration with IIS 7 (Internet Information Services) and modern IIS APIs is provided. The integration with Office 365 was improved in SharePoint 2019 over previous SharePoint Server versions.

SharePoint Online, on the other hand, is completely integrated with Microsoft Office 365 applications such as Outlook Online, Word Online, Excel Online, OneNote and others. The integration with Office 365 applications, Office 365 Groups, OneDrive and Microsoft Teams is excellent. The Power BI integration is supported as well. In addition, you can use the Office 365 APIs to develop custom applications.

SharePoint Online Limitations

You should be aware of SharePoint Online limitations. Some of them are listed below:

  • Storage space for some subscription plans is limited
  • Limit of 5000 items in a SharePoint library
  • 400-character URL limit
  • Limit of 300,000 items when synchronizing data with OneDrive sync client
  • 93-day retention limit for preserving deleted data in the SharePoint Online Recycle Bin
  • The maximum file size in a document library is 100 GB and 250 MB for files attached to list items
  • Limit of 2 million users per site

If a company decides to cancel a paid SharePoint subscription plan, it has 90 days to transfer its data stored in SharePoint Online to another location.

Security of SharePoint Versions

SharePoint Online offers a high level of security; Microsoft installs updates and patches as soon as they become available. In addition, Microsoft Office 365 users can use multi-factor authentication to protect their accounts. Nevertheless, some organizations don’t trust cloud services and prefer to store their data on their on-prem physical servers.

When using SharePoint Server, all security measures are enforced by the company’s IT team and system administrators. They should install security patches on SharePoint Server, MS SQL Server, and Windows Server manually or oversee automatic updates. In addition, they should configure firewalls on the network’s routers, install antivirus software on individual computers and implement other configuration settings according to the company’s security policy. Some companies prefer to have full control over servers storing their data and prefer to deploy SharePoint on-premises.

Licensing and Costs

Microsoft requires you to buy licenses for SharePoint. Let’s take a look at the licensing differences between SharePoint versions.

SharePoint Server. A license is required for each SharePoint Server running on-premises. In addition, a Client Access License (a server/CAL model) may be required. Each user or device must have a CAL to legally access services running in SharePoint Server. CALs are version-specific – you may use CALs for SharePoint 2016 to access SharePoint 2016 or SharePoint 2013, but not SharePoint 2019. Besides that, CALs are divided into device CALs and user CALs.

The following is the list of licenses you can buy to access SharePoint Server 2019:

  • SharePoint Server license ($5,000 per server or virtual machine)
  • SharePoint Standard CAL ($180 per license) for core SharePoint features
  • SharePoint Enterprise CAL ($90 per license) for a fully functional SharePoint Server with all the business solutions and capabilities

CALs are not required for external users accessing public content. In this case, external users are licensed by the SharePoint Server 2019 license. License mobility allows you to re-assign a SharePoint Server license from one machine to another and run SharePoint on virtual machines. You can buy licenses for SharePoint Server once and use SharePoint as long as you want, even after the end of support.

SharePoint Online is licensed on a per-user basis. You have to buy a Microsoft Office 365 subscription plan that supports SharePoint Online with the needed number of user licenses. The SharePoint Online subscription presumes monthly payments. It is possible to pre-pay a one-year subscription for SharePoint Online and Microsoft Office 365.

Microsoft provides different subscription plans for SharePoint Online:

  • SharePoint Online Plan 1 ($5 user/month); includes SharePoint, OneDrive (1 TB), Lists
  • SharePoint Online Plan 2 ($10 user/month); includes SharePoint, OneDrive (unlimited storage), Lists
  • Microsoft Office 365 E3 ($20 user/month); includes SharePoint, OneDrive, Lists and the full set of Office 365 apps/features.

SharePoint Online Plan 1 comes in Microsoft Office 365 Enterprise E1, Business Premium and Business Essentials. SharePoint Online Plan 2 is included with Office 365 Enterprise E3 and E5. After buying licenses for the selected subscription plan, you can create users, assign licenses to users, and re-assign a license from one user to another.

The price for SharePoint Online may be less in the short-term, especially for small companies. Support of SharePoint Server 2019 requires buying hardware, SharePoint licenses, Windows Server licenses and MS SQL Server licenses. However, in the long-term, especially for large companies, using SharePoint on-premises may be a more cost-effective solution and provide more benefits.

User Interface

Both SharePoint Online and SharePoint Server 2019 provide a unified web interface for users. SharePoint versions prior to SharePoint 2019 have a classic web interface that is convenient for the majority of users. In 2019, Microsoft introduced a modern web interface for Office 365 and SharePoint Online, which is also used for mobile devices. SharePoint 2019 (the on-premises version) also has the modern UI. Overall, there is no significant difference between the web interface of SharePoint Online and SharePoint on-premises. Luckily, the Return to classic SharePoint option is available in SharePoint 2019. For now, this option is also available in SharePoint Online, but may be removed in future updates.

Admin Tools

SharePoint Central Administration for SharePoint 2019 is where system administrators can manage sites, users, content and all other options. The SharePoint Central Administration site runs in SharePoint Server. SharePoint 2019 Central Administration is installed on the first server in a farm. It is not provisioned on all SharePoint servers in the farm by default.

With SharePoint Online, the SharePoint admin center is used to manage and configure it via a web interface. The SharePoint admin center is integrated with the Office 365 admin center. Global administrators in Office 365 have SharePoint admin permissions and can assign the SharePoint administrator role to Office 365 users. You can read more about the Office 365 admin center and SharePoint Central Administration in our blog posts.

PowerShell is used to manage SharePoint 2019 via the command line interface. It can be useful for running repetitive tasks or tasks that can be automated. There are PowerShell cmdlets to manage SharePoint Online as well. However, SharePoint Server offers better support for PowerShell.

Migration

You can migrate from SharePoint 2016 to SharePoint 2019, or migrate from SharePoint 2016 and SharePoint 2019 to SharePoint Online. Source files are not deleted when you migrate data from SharePoint on-premises to SharePoint Online. Migration can be performed only to newer SharePoint versions. Microsoft provides special SharePoint migration tools for this purpose.

You can find migration tools to perform migrations from SharePoint Server to SharePoint Online in the SharePoint admin center on the Migration page. Migration Manager, SharePoint Migration Tool (GUI and PowerShell versions), Microsoft FastTrack, Azure DataBox and SharePoint Assessment Tool are Microsoft tools that you can use for different SharePoint migration scenarios.

SharePoint Data Backup

SharePoint Online and SharePoint Server provide versioning features that allow users to recover previous document versions if unwanted changes were made. Recycle Bin is where deleted documents and other files are stored after they are deleted from SharePoint libraries and sites. It is possible to recover deleted items from Recycle Bin within 93 days. You can also restore a deleted SharePoint site by using a built-in functionality during the retention period.

When using SharePoint on-premises, you should:

  • Use RAID 1 or RAID 10 for data redundancy to protect data in case of disk failure
  • Perform MS SQL Server backups
  • Perform web application backups

When you perform a farm backup, you should back up all content and configuration data. There is no built-in scheduler to run SharePoint 2019 backups. You need to create and configure backup scripts, for example, in PowerShell and use Windows Scheduler. You can back up a site collection in SharePoint Server by using SharePoint Central Administration with a graphical user interface (GUI). There are quite a few requirements for proper SharePoint Server backup.

If you use SharePoint Online, Microsoft takes care of data redundancy by using its servers and data centers. The Microsoft cloud uses a distributed model and its servers are linked to each other in data centers located in different countries. This approach allows Microsoft to provide high availability and reliability for Microsoft services (99.9%).

SharePoint has good native recovery options, but sometimes this functionality may not be sufficient for data recovery. That is why you should use third-party software to back up SharePoint data for both SharePoint Online and SharePoint Server.

You can use NAKIVO Backup & Replication to back up SharePoint Online and other Microsoft Office 365 data, like Exchange Online and OneDrive for Business data, and SharePoint Server running on virtual machines and physical servers, machines running MS SQL Server and Active Directory domain controllers. This way, you can recover what you need whatever the failure and even if it was deleted more than 93 days ago.

Conclusion

Choosing the right SharePoint deployment model can be a challenge for many organizations. SharePoint Online is ready for use after the subscription license is purchased without the need to deploy and administer physical servers. SharePoint Server deployed on-premises, on the other hand, allows you to have full control over your servers and data but requires more skill for installation and configuration. You can buy licenses only once and use SharePoint Server as long as you wish. Both SharePoint versions provide a modern web interface. Although Microsoft Office 365, including SharePoint Online, are growing in popularity year on year, many companies still opt for SharePoint Server. The final choice depends on your business needs and requirements.

SharePoint vs. SharePoint Online: A Full Comparison
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