I get asked this question a lot: "Should we move to SharePoint Online, or stick with our on-premises setup?" People expect a long, balanced "it depends" answer. Honestly, it mostly doesn't depend. In almost every real-world situation I see, SharePoint Online is the better choice. Let me walk you through why, in plain terms.
If your organization uses SharePoint or is planning to use it, one common question is:Should we use SharePoint Online or SharePoint On-Premises?
Both versions help teams store documents, share information, and work together. However, they are built differently and offer different experiences.
Let's look at both options in simple terms.
With SharePoint Online, Microsoft runs the servers. They handle patching, upgrades, and backups behind the scenes. You just log in and use it.
With SharePoint On-Premises, your own team owns the servers. That means your IT team has to install updates, manage SQL Server, watch for crashes, and keep everything running all on their own time.
Advantage: Online. Less work, less risk, fewer late-night emergencies for your team.
Microsoft builds new features for SharePoint Online first. Things like Copilot AI, modern pages, and smart document tools all launch on Online. On-Premises gets a much smaller, delayed set of features and some things never arrive there at all.
Advantage: Online. If you're on-prem, you're always a few steps behind.
Online works smoothly with Power Apps, Power Automate, and Power BI. You can build apps and automate work without heavy coding.
On-Premises still allows old-style custom code, but that kind of code is riskier. One bad piece of code can crash the whole system. It's also harder to maintain over time.
Advantage: Online. Simpler, safer, and easier to build on.
Online comes with strong built-in security: multi-factor login, data loss protection, activity monitoring, and automatic threat detection. All managed by Microsoft's security teams.
On-Premises gives you none of this by default. Your team has to set it all up and monitor it themselves, which takes real expertise and effort.
Advantage: Online. Better protection, with far less work on your end.
Online uses Microsoft Entra ID, which supports modern sign-in methods like MFA and passwordless login, right out of the box.
On-Premises relies on older technology and needs extra setup to connect with modern sign-in tools.
Advantage: Online. Simpler, more secure sign-in for your team.
Online storage grows easily as your company grows. No extra hardware, no waiting for IT to add space.
On-Premises storage is limited to whatever servers you've bought. Running out of space means buying more hardware and waiting for it to be set up.
Advantage: Online. Scales with you, instantly.
Microsoft promises 99.9% uptime for Online, backed by data centers around the world. Your team gets fast, reliable access no matter where they're working from.
On-Premises uptime depends entirely on how well your own servers are set up. If something breaks and you don't have backup systems in place, your whole company loses access until it's fixed.
Advantage: Online. More reliable, with far less effort.
Online has built-in protection like the Recycle Bin and version history, plus easy options to add full backup tools if needed.
On-Premises requires you to build your entire backup and disaster recovery plan from scratch extra servers, extra software, extra cost.
Advantage: Online. Easier and safer, with less setup.
Online connects natively with Teams, OneDrive, Outlook, Power Platform, and Copilot AI. Everything works together smoothly.
On-Premises struggles here. Many of these tools either don't connect at all or need complicated extra setup.
Advantage: Online. One connected system instead of separate pieces.
Online is a simple monthly subscription. No servers to buy, no hardware to replace every few years.
On-Premises looks cheaper on paper sometimes, but once you add server costs, software licenses, IT staff time, and hardware upgrades, it usually costs more in the long run.
Advantage: Online. Lower and more predictable total cost for most businesses.
Online updates itself automatically, in small steps, with no downtime for your team.
On-Premises updates are big projects. Your team has to test them, schedule downtime, and sometimes deal with things breaking.
Advantage: Online. No update headaches.
Moving to Online does take planning, mainly around old permissions, old custom code, and helping your team get used to the new look. But the tools to move your files and content are solid and well-tested today. Thousands of companies have already made this move successfully.
To be fair, there are a few narrow cases where On-Premises is still the right call:
Outside of these specific situations, there's no strong reason to stay on-prem in 2026.
SharePoint Online wins on almost every point that matters: less work for your IT team, better security, faster new features, easier growth, and lower cost over time. On-Premises still exists for a small number of special cases, but for most businesses, it's simply the harder, more expensive way to do the same job.
If you're still running SharePoint On-Premises today, the real question isn't "should we move?" It's "why haven't we moved yet?"
