SharePoint On-Premises Vs. Online & How to Estimate Cost for SharePoint Online


Microsoft SharePoint On-Premise and SharePoint Online are the leading teamwork tools in the industry used for workplace collaboration, content management, storage, and document management. Nevertheless, despite all their popularity, both the terms are commonly used interchangeably, as people lack understanding of the difference between the two. So, let’s find out what SharePoint Online and SharePoint On-Premise are and how much they cost?

What is SharePoint On-Premise?

SharePoint On-premise is a server-based system that your company can host locally. In the case of SharePoint On-Premise, your own company is responsible for managing servers, resources, architecture, maintenance, and installation of security patches and updates.

What is SharePoint Online?

SharePoint Online is a very powerful, cloud-based application which is widely used for information exchange and collaboration across the organization. In simple words, SharePoint Online is the web-based version of SharePoint. SharePoint Online enables its users to share, store and manage content seamlessly. If you have an Office 365 subscription, then you can use SharePoint Online as SaaS (Software-as-a-Service) with that.

SharePoint Online Vs. SharePoint On-Premise

A lot of people confuse SharePoint On-Premise with SharePoint Online or vice versa. Although there are many common functionalities, they are two completely different environments that have completely different deployments and infrastructure requirements. Understanding the difference between the two platforms is very important because it can help you choose the right one for you.

As mentioned above, SharePoint Server is a locally hosted platform, that your company will host and manage itself. To deploy SharePoint On-Premise, you need to set up hardware, servers, resources, and architecture to meet the requirements. Also, your in-house IT team will be responsible to install all the updates and security patches. You also need to remember that all these requirements and responsibilities bring in an additional cost to your ownership.

Whereas, if you are using SharePoint Online, then all the maintenance, updates, and technical support services are managed by Microsoft. SharePoint’s Online version does not require any maintenance or purchase of hardware; which means that the cloud version does not bring any significant impact to your deployment costs.

Benefits of SharePoint Online

MS SharePoint Online is a cloud-based tool that business organizations can migrate to for seamless workplace collaboration and document management experience. SharePoint Online moves your documents, files, and libraries effortlessly from your local database to cloud-based SharePoint sites or OneDrive. However, before migrating to SharePoint Online, you need to closely analyze your business requirements, permission behaviors needed and desired settings, etc.

MS SharePoint Online is specially designed to boost organizational productivity and workplace collaboration. The tool offers a wide range of benefits, some of which are listed down below.

1. Multifunctionality

SharePoint Online is a collaborative platform that offers several highly-flexible functions. SharePoint can be used as an internal website or an intranet that can be used to update information, organize and schedule projects, share files and make important announcements. In fact, you can also customize the internal website theme and interface as per your brand personality. You can also set up social networking platforms and enterprise-level search options to encourage better communication and interaction among employees.

2. Cost-Effective & Easy-to-Manage

MS SharePoint is a cloud-based platform that is hosted and managed by Microsoft Cloud environment, and there is nothing supplementary that you need to manage at an organizational level. This clearly means that your organization does not need to invest in any hardware or server or to install anything. This saves a lot of cost, time, and effort on the whole.

3. Easy Accessibility

SharePoint Online stores and manages all your data over the cloud, which allows you to access all your important data and files from anywhere, by using any device. All you need is a web browser and a stable internet connection. These functionalities of SharePoint Online make the overall collaboration process highly effective and also result in increased productivity because your employees always stayed connected to the documents and information.

4. Seamless Integration with MS Office Suite

SharePoint integrates seamlessly with other business applications by Microsoft such as MS Excel, MS Word, MS Outlook, and MS PowerPoint. MS SharePoint is also compatible with many web browsers such as Chrome, Edge, Explorer, and Safari. This allows you to work on different documents within your browser and also edit them on your desktop.

5. Automatic Updates

With SharePoint Online, you don’t need to worry about updates manually, because all the security patches or updates automatically. Once you purchase the SharePoint license, your tool will upload automatically to the latest version and all new features will add up as soon as they release commercially.

6. Advanced Security

SharePoint Online comes with an advanced level of security features that enable users to prevent their sensitive information and any unauthorized access. You can also maintain data integrity by optimizing shareability and data access. You can also set desired security configuration for your documents, site, folder, and library level.

SharePoint Online Estimated Cost?

SharePoint Online is available through a subscription-based plan. There are mainly two subscription plan available i.e. SharePoint Online Plan 1 and SharePoint Online Plan 2. SharePoint Online Plan 1 includes all the features that are ideal for small and medium-sized enterprises and it costs around $5 per user per month for annual subscription. SharePoint Online Plan 1 includes services like SharePoint Online and OneDrive along with 1TB storage at OneDrive per user.

On the other hand, SharePoint Online Plan 2 is ideal for large business enterprises that gets to use all the features of Plan 1 along with the additional features, DLP capabilities, unlimited data storage and in-place holds feature etc. SharePoint Online Plan 2 costs you $10/user/month for an annual commitment. Below given is a detailed chart for plan and pricing of SharePoint Online by Microsoft.

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