SharePoint Online
On-Premises
| No servers, no hardware. Uses Microsoft Cloud data centers. | Purchase and upkeep of servers and hardware is required |
| Internal resources are reduced. No IT strain to sustain your SharePoint environment. Updates are done automatically by Microsoft. | Internal IT team must maintain servers, add updates and patches. |
| Information is stored in the Cloud | Information is stored in-house. Good for strict legal and compliance requirements. |
| SharePoint Online is part of your Office 365 plan and is billed monthly per user | Organization must absorb licensing costs |
| Information is held up to industry specific security standards which are set and verified by third parties | Increased direct control over your information and compliance standards |
| SharePoint Online relies on Microsoft’s built-in redundancy for data centers. No control over servers. | Relies on owned customizable servers and hardware. Full control of server and access services. |
| User interface resembles SharePoint 2016 | User interface has better continuity |
| Tenant running on a multi-tenant server | Single tenant |
| Microsoft manages the installation and deployment of updates and improvements | Updates and improvements are installed and managed in-house |
| Limited custom development | Freedom to do custom development |
| SP Admin Center and PowerShell | Central Administration and PowerShell |
| No infrastructure requirements. Migration work might be needed. | Infrastructure requirements:
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| Microsoft generates backups for entire farm for SharePoint Online and ensures system redundancy so services remain available if components in data center fail | Owner must create, test and manage backups of the dedicated data center |
| SharePoint Online has the ability to connect external users and it can easily be expanded with a variety of Azure services | Infrastructure to connect external users must be built and regulated manually along with setting security features |
| Microsoft takes care of scaling on your behalf | Scaling is your responsibility. Detecting and rectifying bottlenecks lies within the user. |
| Tools and functions are initially ported and constantly updated by Microsoft | New tools are made available later |
| SLA with 99.9% availability | You oversee availability |
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