SharePoint 2016 On Premise vs SharePoint Online
Comparison

We compare and analyze important SharePoint features side by side
to show the differences that make them better or worse in the following categories:

Collaboration  |   Office 365 Only Collaboration Features   |   Security and Permissions Management
Custom Forms and Workflows  |   Enterprise Document Management and Search  |   Cost and Performance
Business Intelligence   |   Management   |   Application Development

Collaboration
SharePoint 2016
On Premise
 
SharePoint Online
Office 365 Enterprise
Document libraries
SharePoint Online modern interface for the libraries simplifies the user experience and adds cross browser capabilities. On premise, outside of OneDrive document library, libraries still use classic user interface with functions such as move or copy dependent on Open in Explorer function. Modern interface for SharePoint 2016, with come Feature Pack 2 release in the fall of 2017
Needs improvement
 
Works great
Co-authoring
Co-authoring of Word, PowerPoint, OneNote documents is possible using web user interface and desktop apps. On premise, Office Online Server is required.
Works great
 
Works great
OneDrive sync client
As of January 2017, Microsoft released a sync client that can compete with Dropbox and Google Drive. Users can sync any document library in SharePoint Online.
Needs improvement
 
Works great
Custom lists
Small to medium lists function the same. As of May 2017, filtering and grouping finally works on large lists in SharePoint Online. Performance and control over large lists is better on premise.
Works great
 
Works great
Mobile apps
Mobile apps have become usable over the last few years and provide simple access to SharePoint functionality (there are a few limitations such inability to edit list items).
Works great
 
Works great
Task management
On premise, tasks work well at single project level. Any type of portfolio management requires Project Web App. In SharePoint Online, simple task management moves to Planner in Groups; Project Web App provides portfolio management functionality.
Needs improvement
 
Works great
Calendars
Microsoft moves the Calendar focus in Exchange. Group SharePoint sites have Calendar web part that displays calendar information from the Exchange Group Calendar.
Works great
 
Works great
Navigation
On premise, navigation is typically hierarchical due to large hierarchical site collection. SharePoint Online organization is flatter with users "following" or "bookmarking" sites or libraries that they care about; SharePoint app home servers as personalized starting point. Additionally, Outlook provides access to all Group sites, and OneDrive provides access to all followed document libraries.
Works well for hierarchial structures
 
Works well for group/team collaboration.
Office 365 Only Collaboration Features
 
Teams
Chat-based workspace organized by teams and channels. Microsoft is adding features that will position Teams as a direct Slack competitor with all the compliance features of Office 365. Teams is built on top of Office 365 Groups. Unlike Slack, Teams work together with Outlook email functionality instead of trying to replace it. In hybrid mode, Teams exist in Office 365 tenant.
Available in Hybrid only  
Works great
Office 365 Groups
Azure AD group + modern distribution list + calendar + modern SharePoint site + Planner + PowerBI workspace. Simplified team collaboration. Shared mailbox/distribution list functionality for email-centric organizations. In hybrid mode, Groups exist in Office 365 tenant.
Available in Hybrid only  
Works great
Delve
Delve search experience is efficient and takes into account office graph relationships. Limited support of document management metadata.
Available in Hybrid only  
Works great
Security and Permissions Management
 
Multi factor authentication
Available in Azure AD Premium licenses only, adding extra cost.
Requires Azure AD tenant  
Needs to be included in Azure Basic
Active directory, user reporting, retention, data loss prevention
Microsoft has invested heavily into audit capabilities of Azure Active Directory used by SharePoint Online and Office 365 services. On premise, feature pack 1 allows integrated Audit Trail - need 0365 tenant for this functionality.
Needs improvement
 
Works great
SharePoint groups and permissions reports
No significant differences. To get good group and user reports, requires custom development or third party applications.
Needs improvement
 
Needs improvement
External sharing
Office 365 makes sharing content outside of organization seamless and controlled. External users can login using their Microsoft accounts or register their email addresses as Microsoft accounts. Control exists at tenant and site collection level.
Needs improvement
 
Works great
Custom Forms and Workflows
 
InfoPath 2013
On premise, InfoPath is the main option to build complex forms for data entry into lists or libraries. Microsoft plans to support InfoPath 2013 until 2026 with no feature additions or updates. InfoPath still works in SharePoint Online, although it's disabled by default on new tenants.
Works great
 
Still works.
2010 and 2013 Workflows
Availability of two workflow platforms confuses designers (as platforms are from previous releases of the product). As there are no out box 2013 workflow templates, only those proficient in SharePoint Designer or Visual Studio can build new workflows. Keep in mind that there is no SharePoint Designer 2016.
Needs improvement
 
Needs improvement
Power Apps
Powers Apps is a long term InfoPath replacement in SharePoint Online; currently should consider this a beta product. The tool will support web based templated forms in the summer of 2017; currently mobile layouts are the default. The tool has a higher learning curve than InfoPath and may be difficult for non developers to learn.
Possible to conntect to on premise data sources. Office 365 tenant required.
 
Promising.
Flow
Orchestration platform that replaces SharePoint Designer workflows. Easily connect to any Office 365 product or over a hundred external services such as Salesforce, Dropbox, and Github. The learning curve is shorter than SharePoint Designer. Should consider this a beta product and there are still a number of features in develpment or missing.
Possible to conntect to on premise data sources. Office 365 tenant required.
 
Short learning Curve.
Needs improvement.
Enterprise Document Management and Search
 
Site columns, managed metadata, and content types
Office 365 predefines the location of content type hub and limits the organization to one taxonomy store.
Works great
 
Works great
Classic Search
SharePoint Online predefines the location of classic search center. Content sources and craws are handled automatically. Using custom refines is possible with placeholder managed properties. The modern search experience relies on Delve that finds documents that are relevant to the user based on Office Graph filters.
Works great
 
Works great
Cost and performance
 
Performance
When installed correctly with proper warm up scripts SharePoint 2016 is very fast with faster page loads than SharePoint Online. On premise is better if the most of the users are close to the servers.
Works Great
 
Needs improvement
Cost
There are a number of different plans that includes features in this comparison. License management is important for large organizations.
Can be costly for small organizations
 
Great value for small organizations (<1000)
Business Intelligence
 
Excel data modeling, PowerPivot, PowerPivot application
Works great
 
Works great
Power BI Desktop, Power BI Server, and PowerBI.com
Requires Power BI Server  
Works great
External connections and data refresh
In PowerBI.com, connections to on premise sources require setup through PowerBI admin center including installation of gateway software. Higher data refresh rates require PowerBI Pro licenses
Works great
 
Works great
Management
 
Moving sites and lists
Administrators have to rely on third party tools such as ShareGate or Metalogix to efficiently move sites and lists. .
Needs improvement
 
Needs improvement
General PowerShell access
PowerShell commands on premise are fast to write and execute. Online commands usually require addition of SharePoint CSOM code or Graph API access
Works great
 
Works great
Application Development
 
Provider Hosted Apps
SharePoint provider hosted apps are the best option for long term development in SharePoint. Code (C#, JavaScript, or any other language with REST API) is in one place outside of SharePoint. Most updates do not require version update. Development process is straightforward with local server in Visual Studio, and web deploy to staging (or production). Full Git support. On premise, setup of provider hosted environment should be more automated by Microsoft (hence needs improvement).
Needs improvement
 
Works great
SharePoint Hosted Apps
SharePoint hosted apps are simplest to get started with both on premise and online. However, the deployed code is stored in multiple SharePoint app webs (unless deployed with tenant scope). All updates require app version increase and the code is limited to JavaScript
Don't use
 
Don't use
Windows Azure
Azure web apps, SQL databases, Azure AD, Blog storage, and No SQL databases are a simple way to build great applications that can scale. Full integration into Visual Studio 2013 and 2015 provides a better alternative to AWS or Google. Visual Studio online provides support for Git, agile deployment, and build management.
Works great
 
Works great
Deploying JavaScript in document libraries
Microsoft does not support unmanaged script in the modern interface.
Works great
 
Works great in classic pages
SharePoint Framework
Client side extensibility of modern pages and web parts
Available in Feature Pack 2 - Fall 2017
 
Work in progress



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