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This content is part of the Essential Guide: The pros and cons of SharePoint continue to divide users

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SharePoint on-premises vs. SharePoint Online: What tradeoffs remain?

An expert explains how SharePoint Online is gradually becoming more of a standalone product and how companies can take advantage of its growing functionality.

Scott Robinson, Lucina Health

Published: 11 Feb 2015

There are a few tradeoffs between SharePoint Online and SharePoint 2013 on-premises. SharePoint Online is extremely...

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economical -- subscriptions don't cost that much and there's a lot of utility right at your fingertips -- but there's also more limited functionality than in the on-premises version of SharePoint 2013. There are issues with search functionality and with customization. However, Microsoft is gradually updating and improving SharePoint Online.

With its initial release, the main problem with SharePoint Online search was that the content search Web part was not available. That was a huge problem because a lot of other functionality derives from content search -- cross-site publishing, for example, and e-discovery functionality. But Microsft eventually deployed content search, and with it came cross-site publishing, and now they're deploying e-discovery.

With the added functionality that came along in 2014, SharePoint Online is looking more and more like a powerful standalone. It will continue to catch up to the on-premises version. For now, a hybrid model of SharePoint Online and on-premises makes a lot of sense for companies that already have an on-premises deployment. Companies can have core utility in an on-premises deployment, and then share information with a field workforce or customers using SharePoint Online. Any missing functionality in SharePoint Online isn't so crucial if you're using that model.

Microsoft made a good move in allowing for this hybrid model, but it doesn't make sense for companies that don't already have an on-premises deployment and want to save money by going to the cloud. In the next year, with the SharePoint Online product becoming more standalone, this won't be as much of a problem.

Will customization in SharePoint Online get easier?

With tenant-based SharePoint farms in the cloud, you have to share with a lot of other customers, which makes it difficult to customize. While SharePoint on-premises is like a big chunk of land where you can build a nice house and design things as you please, SharePoint Online is like moving into a block of condos -- you have very little say about the layout, and all you can do is decorate.

There's not a lot you can do about that, but customization moving forward is going to be easier than before. The sandbox model of development -- where you can write whatever code you want and if it runs badly, that's your problem -- will be replaced by the app model. Going forward, anything you deploy on a SharePoint site will be a Web part that conforms to Microsoft's general code execution rules. The custom code that we build in the future is going to be cleaner and more efficient than before. The end result is that it's going to be possible to write more stylized, more customized applications in SharePoint.

Next Steps

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How do I pick between SharePoint Online vs. SharePoint 2016? Losing SharePoint features when migrating to the cloud was a top concern a few years ago. Today, the online version is ahead of its on-premises counterpart.

SharePoint 2016 RTM highlights Microsoft's cloud path SharePoint 2016 RTM is out and highlights the path Microsoft is paving for shops to the cloud.

Five points to consider before a SharePoint Online migration Organizations that are planning a move from on-premises SharePoint to SharePoint Online should consider which features may not survive a migration to the cloud.

Steps to make hybrid SharePoint search work Since the advent of cloud-based SharePoint, the refrain has been, "Why doesn't search work?" Today, you can configure SharePoint to address that problem.

Tips to align SharePoint hybrid licenses and subscriptions If you’re considering a hybrid SharePoint license, the key is alignment between your cloud and on-premises licensing schemas.

Scott Robinson asks:

Which do you prefer: SharePoint on-premises or SharePoint Online? Why?

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SearchContentManagement - 11 Feb 2015 8:54 AM

Which do you prefer: SharePoint on-premises or SharePoint Online? Why?

Garry48 - 19 Feb 2015 9:15 AM

These two platforms have high productivity when used together rather than as single entities. SharePoint on-premises has the capability of indexing SharePoint content, those stored in file shares, Microsoft Exchange, Lotus Notes and websites. This highly efficient Business Data Catalog also allows for virtual access through Business Connectivity Services. Unfortunately, these features do not apply to SharePoint Online that only covers content on SharePoint and BCS. I would therefore prefer SharePoint on-premises over SharePoint Online.

dalbokova - 29 May 2015 7:16 AM

Online is perfect for content manager!

Jason48 - 18 Feb 2015 2:57 PM

Yes. Besides cross-site publishing, content search, and e-discovery, I believe that the future launch of the app model makes SharePoint Online less different from on-premises.

bfsmith - 18 Jan 2017 8:47 AM

On premises until there is a good replacement for InfoPath with code behind. Especially in an extranet scenario where you might have thousands of users - who will be SQL authenticated FBA users.

Essential Guide

SharePoint on-premises vs. SharePoint Online: What tradeoffs remain?

An expert explains how SharePoint Online is gradually becoming more of a standalone product and how companies can take advantage of its growing functionality.