Office 365 vs. SharePoint Server vs. hybrid: How to choose the right SharePoint
With the release of SharePoint Server 2016, you now have 3 viable ways to deliver SharePoint:
- Cloud (Office 365 and SharePoint Online)
- On-premises (SharePoint Server)
- Hybrid (both Office 365 and SharePoint Server)
Whether you’re looking at using SharePoint for the first time or have been using it since 2003, here are some things to keep in mind as you decide which option will work best for your company.
A quick overview of each available option
Office 365 is a software as a service (SaaS) that includes an online version of SharePoint as one of its many features. When Microsoft first released Office 365 in the summer of 2011, it lagged behind the on-premises version. But on May 4, 2016, Microsoft announced its cloud-first vision for SharePoint. The SharePoint community had been predicting this for a while, so this was simply the confirmation for which everyone had been waiting. Now, Office 365 has more features than the on-premises editions.
Office 365 has more features than the on-premises editions.
Distinguishing features of Office 365
- SharePoint farms are hosted in Microsoft’s cloud infrastructure
- Microsoft applies security patches and pushes platform updates
- Office 365 has committed to 99.9% availability in their service level agreement (SLA)—anything less than that and you may receive a service credit
- Office 365 receives more new features, more frequently
- You pay per user with SaaS deployment
As Microsoft focuses their efforts on developing and maintaining Office 365, they aim to make Office 365 valuable for organizations of every shape and size.
SharePoint Server is the traditional deployment of SharePoint. You buy the software license, provide the hardware to run it, and hire the IT personnel and developers to maintain it.
Even though the on-premises version of SharePoint is no longer leading in innovations, Microsoft hasn’t abandoned it. And rumors that 2016 will be the last server release are untrue as of May 4, 2016. Because so many companies have invested heavily in their on-premises solution, Microsoft will continue to offer support for it. In the future, it’s likely that Microsoft will move away from its 3-year release cycle in favor of feature packs that occasionally bring the best updates from the cloud to your server.
Microsoft releases on-premises SharePoint largely for those who wouldn’t be compliant in the cloud and those who have already invested heavily into their on-premises deployment.
Notable features of on-premises SharePoint servers
- SharePoint farms are hosted by your company
- Your IT is responsible for everything—patches, updates, etc.
- You maintain the Active Directory Domain Services (AD) on-premises
- New versions receive thoroughly tested features from Office 365
- You buy Client Access Licenses (CALs) for either each device or person accessing the SharePoint server
Even though Microsoft is pushing for companies to move to the cloud, they understand not all companies can do so. For companies that have invested heavily into SharePoint Server, moving to the cloud is an expensive project that will take a lot of resources. There are also some companies that wouldn’t be compliant if they were to operate solely within the cloud. This is why Microsoft has committed to continuing to support on-premises SharePoint.
Microsoft built SharePoint 2016 off the same code as Office 365, so there is new continuity between the on-premises and online versions of SharePoint that makes hybrid solutions more seamless.
Microsoft continues to find hybrid ways for companies stuck between traditional and cloud deployment to get the most out of SharePoint Server 2016 and Office 365. New developments for 2016 let users operate seamlessly within both environments. Unable to reside wholly in the cloud, companies can keep communication between the cloud and their servers open.
Hybrid SharePoint helps users operate seamlessly between the cloud and on-premises.
Situations where hybrid deployments make sense
- A company moving to the cloud has important data on legacy servers. It might be easier to maintain the servers instead of trying to move all the data to the cloud.
- A company has certain data that can’t be in the cloud for compliance reasons. Yet, they could benefit a lot from a cloud deployment. They keep the most sensitive information on their SharePoint server and migrate everything else to the cloud.
- A company is making a slow move to the cloud to minimize interruptions to business processes and maintain user adoption. During the migration, which could take several years, data will be spread between on-premises and the cloud. This could mean that any new documents will be automatically stored on the cloud while old documents will be transferred from servers to the cloud as users need them.
New developments that make hybrid solutions more seamless than ever
- Search has been updated. You can set up your environment so that users who initiate a search in their Office 365 environment see results stored in the cloud and your server. As of now, this does not work vice versa—that is, users won’t see content in the cloud if they initiate a search from the server. Microsoft recommends using the cloud hybrid search rather than the hybrid federated search for best results.
- OneDrive for Business can be set up so that whether a user selects One Drive online or on-premises, they will be directed to OneDrive for Business (in Office 365).
- Setup of a hybrid solution is much easier because it is now largely automated.
- User interface (UI) has been aligned so that users navigating between on-premises and online won’t notice a difference every time they switch.
- Durable links ensure that users do not need to get a new link if a document is moved or altered. Their old link will continue working.
Differences among the 3 options
Office 365 is a service while SharePoint Server is a platform. These basic differences affect the cost of each.
- Plan 1: Includes team sites, external sharing, content management, access services, SharePoint 2013 Workflow, and search
- Plan 2: Includes everything in Plan 1 plus enterprise search; e-discovery, ACM, and compliance; Excel, Visio, and InfoPath forms and services; and business connectivity services
- Office 365 Enterprise E3: Annual commitment that includes everything in Plan 2 plus Exchange Online, Outlook, Word, Excel, PowerPoint, OneNote, OneDrive for Business, and Skype for Business
If you go the hybrid route, you’ll be adding a per user, per month plan for Office 365 to your existing SharePoint Server license and maintenance costs. You may be able to reduce your existing number of server licenses when you move certain users completely into the cloud.
To decide which option is right for you, you’ll need to figure out the different ways users will use SharePoint as well as how many users will be using each use variation.
Save money by only giving users as many features as they need—don’t give everyone the same license.
Features / update frequency
Because Office 365 is a service, Microsoft updates it with new features more frequently than it does SharePoint Server. You can check out the launched, upcoming, and cancelled feature updates on Microsoft’s page for the Office 365 Roadmap.
Despite the fact that they share a code base, there are limitations in the SharePoint Server that make it impossible for Microsoft to deploy all the features of Office 365 on-premises. Still, Microsoft will intermittently release some features from Office 365 in feature packs for SharePoint Server 2016.
One of the bigger shortcomings of Office 365 is the decreased ability to customize. You can’t do as much custom branding on things like team sites in Office 365 as you can on-premises. Sites with heavy customization on-premises will look different to users if you move them into Office 365.
You can’t do as much custom branding on team sites in Office 365 as you can in SharePoint Server.
A common concern when considering the cloud is security. With Office 365, you’ll need to perhaps pay more attention to your security policies to make sure your data stays secure. Plus, there might be regulations that prevent you from keeping certain data in the cloud because of where Microsoft has its data centers for Office 365.
If you want to use Office 365 but have some data that can’t reside on the cloud for compliance reasons, consider a hybrid solution. You can mark what data needs to remain on-premises in your servers and what data can reside in the cloud.
There may be regulations that prevent you from keeping certain data in the cloud.
What to do next
It isn’t bad to keep using on-premises SharePoint—especially if you already have great user adoption. Ask yourself the following questions to determine if Office 365 might be the best option for your company.
- How many users need highly customized team sites? If none of your users need team sites with a lot of customization, Office 365 won’t be as jarring of a visual change from SharePoint Server.
- Do we have any regulations that keep us from storing our data on the cloud? Even if you have a great business case for Office 365, don’t sacrifice compliance for user satisfaction. Look at hybrid options as a compromise. Or, look into ways to maximize the value you’re getting from your on-premises deployment.
- Are users attached to our current setup? Great user adoption is hard to get in SharePoint, regardless of how you’ve deployed it. Don’t suddenly switch from Office 365 to SharePoint Server or vice versa because you can see the benefits. Spend some time wooing users to make sure they’re on board as well.