There’s a big difference between having something hosted in the cloud and hosting it yourself or in a data center managed by your IT team. The main differences are the cost, your security strategies and expectations, functionality, and usability. SharePoint is the backend of Microsoft 365—formerly called Office—and comes in two varieties. Today we’ll look at a few reasons why an organization would favor Microsoft’s SharePoint Online (part of Microsoft 365) versus SharePoint Server (on-premises).

Where is your data?

Working with your data in the cloud usually offers the cleanest and simplest way to collaborate and access your organization’s data. If you’re using SharePoint Online as part of Microsoft 365, then your entire productivity suite is integrated together; you can create SharePoint Sites by creating channels in Teams, store Word documents for collaboration simply by sharing them in a channel, etc. That convenience is the right choice for a lot of organizations.

When using Microsoft 365, that data is managed by your IT team, but stored on Microsoft’s servers. Using their cloud storage (SharePoint and OneDrive) as the backend of your organization gives you these pros:

  • Rely on Microsoft’s security and authentication systems for accessing your data
  • Scale up and down your storage needs
  • Get the most current software (on the web) with no extra work or downtime
  • Easily share data outside of the organization when needed

Keeping your data closer to home

The pros for keeping your data in Microsoft’s cloud don’t really have a set of cons to go head to head with. Questions of how to build your IT solutions become more complex if you have needs for high security or regulatory compliance. If your organization works with regulated data (HIPAA, for instance) or does government contract work, then you likely need more privacy and security for cyber insurance and compliance purposes. A bespoke solution to your data needs might help keep a tighter ship and offer more institutional control..

There are a few other reasons for building and/or maintaining your own data center, though:

  1. You don’t want to change how your organization connects to your network and data
  2. You have larger storage needs than are feasible for cloud storage
  3. You have customization demands that exceed what you can do with mainstream cloud solutions


These situations call for running your own SharePoint server, where you can still internally collaborate, share, and manage your documents and files, but do so without integrating your communication platforms and the cloud. While some of these reasons are pretty obvious for some industries and applications, others might be surprising.

Weighing the Options

If your organization uses a storage solution  that doesn’t play nicely with Microsoft 365, or if you have your own data center, it might be better to stick with your own hosted SharePoint solution. However, many companies in the storage space have solutions that integrate with Microsoft 365; of course, each provider will offer different features, workflows, and use cases. Knowing for sure probably means talking to your IT team about how other storage solutions would integrate with your productivity software.

Ultimately, whichever solution is right for your organization will depend on your specific needs as a company and the demands that you put on your data. While it is likely more convenient to go with SharePoint Online, you can only know by having a dialog with your IT services provider about what is right for your particular use cases.

-Written by Derek Jeppsen on Behalf of Sean Goss and Crown Computers Team