Two Ways to Run SharePoint
SharePoint exists in two fundamentally different deployment models. SharePoint Online is the cloud-hosted service included in Microsoft 365 subscriptions, where Microsoft owns and patches the servers, guarantees a 99.9% uptime SLA, and pushes new features automatically every few weeks. SharePoint Server, sometimes called on-premises SharePoint, is software your organization installs on its own Windows Servers (or IaaS virtual machines), giving you full control over the infrastructure but making you responsible for patching, scaling, and backups yourself.
Cricket analogy: SharePoint Online is like renting a fully maintained stadium from the ICC for a tournament — pitch, floodlights, and staff are all managed for you — while SharePoint Server is like owning and maintaining your own club ground, responsible for the pitch curator and floodlight repairs yourself.
Cost, Control, and Update Cadence
SharePoint Online uses predictable per-user monthly licensing (bundled in plans like Microsoft 365 E3 or E5) with no upfront hardware cost, and Microsoft rolls out feature updates continuously without any action required from IT. SharePoint Server instead requires a one-time or volume license purchase plus server hardware or IaaS costs, and IT teams must plan and test major version upgrades (for example, moving from SharePoint Server 2019 to Subscription Edition) themselves, often once every few years, which gives more control over change timing but also more maintenance burden.
Cricket analogy: SharePoint Online's subscription model is like paying a season pass to attend every IPL match without owning the venue, while on-premises is like buying the stadium outright and funding its renovations on your own schedule.
Hybrid SharePoint
Many enterprises with legacy on-premises SharePoint Server farms run hybrid configurations, using the SharePoint Hybrid Configuration Wizard to connect their on-premises farm to SharePoint Online so that search results, OneDrive redirection, and site following work across both environments during a gradual migration. This lets organizations keep sensitive line-of-business content on-premises for compliance reasons while moving general collaboration to the cloud, though it adds networking complexity such as configuring Azure AD Connect for identity synchronization and reverse proxy servers for secure external access.
Cricket analogy: Hybrid SharePoint is like a cricket board running some matches at a rented neutral venue while keeping marquee matches at its historic home ground, syncing schedules and ticketing between both.
# Connect to SharePoint Online with PnP PowerShell
Connect-PnPOnline -Url "https://contoso.sharepoint.com/sites/TeamSite" -Interactive
# Compare with connecting to an on-premises farm
Connect-PnPOnline -Url "http://sp2019.contoso.local/sites/TeamSite" -CurrentCredentials
Get-PnPWeb | Select-Object Title, Url, WebTemplateMicrosoft retired mainstream support for SharePoint Server 2019 on-premises editions on a fixed schedule, which is why many enterprises use Subscription Edition (the latest on-premises release) as their long-term on-premises platform while gradually shifting collaboration workloads to SharePoint Online.
Choosing on-premises SharePoint means your organization is solely responsible for disaster recovery, patch management, and security hardening; a missed security patch on a public-facing on-premises farm has historically been a common attack vector, unlike SharePoint Online where Microsoft manages patching centrally.
- SharePoint Online is Microsoft-hosted and included in Microsoft 365 subscriptions with automatic updates.
- SharePoint Server is self-hosted on your own servers or IaaS VMs, requiring manual patching and upgrades.
- Online uses predictable per-user licensing; Server requires upfront licensing plus hardware/IaaS costs.
- Server gives more control over update timing but shifts maintenance burden to internal IT.
- Hybrid configurations connect on-premises farms to SharePoint Online for search, OneDrive, and site-following continuity.
- Hybrid setups add complexity such as Azure AD Connect identity sync and reverse proxy configuration.
- On-premises deployments carry full responsibility for patching and disaster recovery, a key security consideration.
Practice what you learned
1. Who is responsible for patching servers in SharePoint Online?
2. What is a defining characteristic of SharePoint Server (on-premises)?
3. What is the purpose of the SharePoint Hybrid Configuration Wizard?
4. Which licensing model best describes SharePoint Online?
5. What is a key security risk specifically associated with on-premises SharePoint Server?
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