SharePoint On-Premises & MS Office 365 – A Detailed Comparison


Since then, the motto “Cloud First” has been an integral part of Microsoft’s strategy. What does this motto mean for SharePoint from the Office 365 cloud? And what are the most important differences between SharePoint On-Premises and Office 365?


There are already far-reaching differences between the two SharePoint solutions. Microsoft always publishes all bug fixes and updates about appearance and functions in the cloud-first. In contrast to this, Cumulative Updates (CU) are delivered monthly for on-premises installations. But not all updates from the cloud find their way into the CUs. Because some functions from Office 365 are not even available in the on-premises version, such as B. Delve, Sway, and MS Teams.

Microsoft is constantly expanding the functionality of SharePoint in Office 365 by installing new apps and interlinking them more and more closely. Functions are not provided on SharePoint, but SharePoint pulls data and functions from other systems. MS Teams alone currently provides over 85 connectors to use data from different sources. MS Teams, in turn, can be used by SharePoint with the Modern Team sites – seamless integration of functions and data.


Would you like to use SharePoint from the cloud with mobile devices? This is not a problem with the SharePoint app, as the app is available for all common mobile operating systems. With the help of the SharePoint app, MS team pages can easily be accessed on SharePoint while on the move to edit documents or use the search function. In-Office 365 works “out-of-the-box”. In an on-premises environment, the functionality must first be set up by the administrators.


The two systems also differ in terms of administration. With the on-premises installation, the administrator can manage the entire SharePoint server within the framework of the system parameters. This is only possible to a very limited extent in the Office 365 variant. There is a website in Office 365 for administrative purposes. But this website only puts together all the apps needed to manage the SharePoint environment.

On-premises administration is possible from the web application level. In contrast, the cloud version only allows administration from the level of the website collection. Because the cloud SharePoint is only a “client”, one of many web servers managed by Microsoft in Office 365. Separate commands (cmdlets) are available for administration via PowerShell. These are executed in a local PowerShell. But beforehand, the Office 365 tenant has been logged in and the commands are implemented there.


On-premises, system maintenance, and monitoring, as well as backup, is the responsibility of the owner. The owner also has to pay for the costs caused by licenses and staff, e.g. B. for planning and performing maintenance. The higher the service level agreement (SLA) with internal customers, the higher the effort, i.e. the costs. The maintenance, monitoring, and backup of a SharePoint on Office365 are part of the service of an Office365 license and are therefore taken over by the respective provider. With a corresponding SLA, Microsoft guarantees the availability of 99.9%.

In addition, it can already be seen today that the administration of a cloud SharePoint differs significantly from the administration of an on-premises SharePoint. In the future, the Microsoft Office365 SharePoint administrators will be less and less busy with the actual system administration, because this is guaranteed by the respective provider. However, the range of functions, the number of applications, and the interdependence of the individual systems are constantly growing. Here it is important to keep an overview to always be able to make the best possible decisions for the respective requirements. That is why the work of the cloud administrators will shift: away from system administration to setting up logical structures and managing the increasingly diverse cloud applications.

Customization Options

Office 365 is provided as a managed service. Therefore, both the access and the customization options are limited. For example, the optical and functional adaptations of an on-premises team site in the Office 365 variant usually look different or use is only possible to a limited extent. If certain functionalities are necessary and cannot be mapped with the available resources, the hybrid operation of the systems remains, i.e. the combined use of an on-premises SharePoint and a SharePoint online.

For SharePoint Online, Microsoft released version 1.0 of the SharePoint Framework (SPFx) for general use in February 2017. Thus, users have the permission to develop SharePoint applications for the browser and smartphone apps and thus to enrich SharePoint Online with the necessary functions.

The SPFx has several advantages over the traditional script or add-in approach. The framework is not based on iFrames, but uses web frameworks such as Knockout.js, AngularJS, or React and can be edited with tools such as TypeScript or Gulp.js. Web parts created with the SPFx can replace the ever-popular JavaScript embedding via the script editor web part on SharePoint pages, which is only available if custom scripts have not been blocked in the administration settings. SPFx is constantly being developed and is currently only available for SharePoint Online. A version for on-premises installations is planned for the upcoming “SharePoint 2016 Feature Pack 2”.


A license for “SharePoint Server 2016” is required for each running server instance. In addition, every user who accesses SharePoint requires an access license (Client Access License = CAL). A distinction is also made here between user license (User CAL) and device license (Device CAL). The CAL is also available in 2 different versions, whereby the Enterprise CAL is an add-on and requires a standard CAL.

The Standard CAL provides all the basic functions of SharePoint. These include B. Websites, the community platform, content management, and search. The SharePoint 2016 Enterprise CAL allows the use of all functions of the SharePoint server. In addition to the basic functions, the Business Solutions (Access Services and InfoPath Services) as well as Business Intelligence functions (Visio Services, Excel Services, PerformancePoint Services, and Power View) are available.

Office 365 SharePoint Online is licensed per user and is available as a subscription. There are 2 different stand-alone plans for SharePoint Online. It is also included in many Office 365 plans such as Office 365 Business Essentials or Office 365 Enterprise E3. The full list of all features and Office365 plans is available from Microsoft here.

The Functional Comparison of SharePoint On-Premises & SharePoint Online At A Glance

Conclusion: SharePoint On-Premises and Office 365

The comparison of a SharePoint On-Premise with Office 365 is usually out of date after just a few days. Because Microsoft is constantly driving the development of Office 365. New patches, features, and apps are imported during operation and are immediately available to customers.

An on-premises system benefits from the fact that the content of the CUs has usually already been tested in the cloud. Experience shows that not all functions are transferred from the cloud to the on-premises version. As the systems in the cloud grow together more and more, dependencies develop. Therefore, some functions remain cloud-only.

It remains to be seen which functionalities Microsoft will add to the recently announced “SharePoint 2019” in the on-premises version. Until then, likely, some interesting innovations will still be available in the cloud.

So far, Microsoft has consistently followed the motto “Cloud First”. The available apps and services such as B. SharePoint Online, MS Teams, Sway, Delve, and MS Planner are increasingly being used as digital workplaces with significant added value.