What are SharePoint and Office 365? How are they different? How are they the same? You know, what gives!?


TL;DR: Office 365 is Microsoft’s version of the cloud; it comes with SharePoint Online (note: different from just SharePoint), Word, Excel, PowerPoint, OneNote, and a bunch of other business software all through one online portal (plus downloads, where applicable). SharePoint, on the other hand, is a network platform that’s locally installed on servers usually controlled by your IT department (also called an on-premisis system or simply on-prem). The two systems can talk, but only to a limited extent at the moment. Using both systems is called a hybrid solution or going hybrid. Hybrid’s all the rage right now, even if it’s not the simplest thing to understand.


The biggest move Microsoft’s made in the last few years is introducing this new product they pulled together called Office 365. But what exactly is Office 365? How is it different from SharePoint, if at all? And what does it have to do with the MS Office we all know so well, since it clearly stole the name brand?


It’s actually a lot simpler than you may think. And it all comes down to one recent, but fundamental shift in the computing paradigm: the cloud.


Yeah but… what is the cloud?

Sorry, a little context is necessary before we really dive into the SharePoint vs. Office 365 debate. The cloud: it’s aptly named, because it’s not a clear concept to a lot of people. I can’t blame you if you’re not sure what it means.

What exactly is the cloud

The cloud refers to any online product that’s hosted by a third-party vendor that offers you a service through their hardware. You may also hear the term software as a service, or SaaS. They mean the same thing.


You’re likely already familiar with the concept, even if you don’t know it: if you use Google Drive, iCloud, iTunes Match, Amazon Music, OneDrive, or DropBox, you’re using the cloud. You’re accessing content from one central online location—whether you uploaded it or it was provided to you—and streaming or downloading the content when you need it.

Cloud services copy

Many of these services also offer the option to sync some or all of the content to your device for offline use. But the point is that all of your content is saved online; some of your content—likely what you consider the most important—is available on your device for when you’re offline.


The cloud has come about because of two major developments over the last five-to-ten years: 1) storage space has become super cheap and 2) Internet access has become extremely reliable and very fast, even when you’re on the go. It’s easier for you to store your stuff in one central location and access it from any type of supported device (desktop, laptop, phone, tablet, etc.).


The cloud also reduces risk for you: gone are the days when you lose all of your files, email, contacts, and so on if your hard drive crashes or you have to factory-reset your smart phone. Just download your cloud content once your hardware is fixed and you’ll be as good as new.


O365: SharePoint & Friends™ move to the cloud

That brings us to SharePoint and Office 365. SharePoint 2003, 2007, 2010, and 2013 are installed on locally procured and maintained servers at your employer or on servers elsewhere that your employer contracts with. Your IT department likely has full control over the hardware and software. They can upgrade it when they want. But it also costs them a lot to purchase servers, purchase licenses for the software, and, more importantly, maintain it. (I say “more importantly” because software maintenance costs significantly more in budget or manpower than installation ever does.)


SharePoint is just one product, though it comes with multiple parts (search, Office Web Apps, websites, social networking, etc.). It has certain minimum requirements to ensure it plays nice with your email system, phone system (if you’re using Lync/Skype), and other hardware and software your employer may use. The way it works really hasn’t changed much over time.

On prem v cloud

Office 365, on the other hand, is the cloud version of the entire Microsoft business platform. O365 is a subscription service. With the subscription, your employer grants you access to a lot of things:


  1. License to install Word, Excel, PowerPoint, and OneNote on your computer and access to Office Online, the browser version of the apps;
  2. Access to SharePoint Online, the cloud version of SharePoint;
  3. OneDrive for Business, a 1-TB storage solution (that’s 1,000 gigabytes!) in the cloud, offered to each employee, with the ability to sync for offline viewing (plus mobile app);
  4. A new YouTube-style online video portal;
  5. Yammer or Newsfeed, the cloud version of the same thing you’re used to in SharePoint 2013;
  6. Online access to all Outlook functionality, broken up into mail, people, calendar, and tasks;
  7. Delve, the impressive new social networking tool (plus mobile app); and
  8. Sway, a new multimedia-friendly presentation creator.


O365 can come with other stuff, but it’s not really important to cover here. You’ll know what you have available when you log in and click the app launcher, also known as the waffle (look at it), in the top-left corner of the portal.




By the way, did you know if your employer provides you Office through an O365 subscription, you can install the software suite on up to five devices (desktop/laptop) and unlimited mobile devices as part of that license? You should probably get on that!


So, which is the better one?

Touchy subject. It depends entirely on who you ask.


From a user perspective, O365 and SharePoint Online offer a lot more functionality and very high-quality mobile access. SharePoint on-prem doesn’t. For example, Delve, OneDrive, and Sway are only available through O365. External sharing of content—with any email address you want—is also available by default with O365. It was Microsoft’s answer to the ease of sharing that comes with Google Drive. These are major drawbacks to SharePoint on-prem.


From IT’s perspective, SharePoint on-prem offers much greater security and complete control over the system. Your marketing team may prefer SharePoint on-prem as well because it can be customized and branded so it doesn’t look all SharePoint-y and whatnot. And some of your process owners may prefer SharePoint on-prem because you can build custom applications within SharePoint on-prem. Not so much with SharePoint Online.


Employees just want to get work done, so don’t get in their way. That’s why they like O365. IT wants to ensure their products are sustainable and that they can react to issues appropriately, which is why they like SharePoint on-prem. Quick disclaimer: I’m totally generalizing users and IT people here. Some may disagree. But generally, these are the sides each fall on.


So what’s the solution?



You may have heard this term if your employer has jumped on O365, but still retain content on SharePoint on-prem. It’s all the rage in the Microsoft community now and, frankly, it’s kind of annoying.


Basically, a hybrid solution is one that incorporates both SharePoint on-prem and O365. This can be difficult because it may not be obvious to you which is which. It’s redundant to offer both Delve and My Sites. It’s redundant to have the Newsfeed/Yammer on both platforms.


And it’s hard to keep track of where you’re putting your files if there are two systems. And maybe that’s not important. But, in my opinion, you should know where you’re storing your stuff… and why.


If you count OneDrive for Business as another option for storage—and you should—then there are actually three choices for you to store any given Word document. That’s a lot to think about, and it may lead to you just dumping files in random places rather than being smart. Because you have work that’s more important than thinking long and hard about where you keep your documents.


Few IT departments are going all-in on O365 yet. Many will soon, but it will take some time. And others never will, especially if they work on extremely proprietary or confidential stuff (think military contractors). So SharePoint on-prem isn’t going anywhere. But I predict it will begin to lose its edge sooner rather than later as IT departments who, no matter what they do to try to keep control over their content, fall prey to the democratized call to better business practices by their tool-hungry users.



Oh, and one last thing: why call it Office 365? It’s as obvious as you think it is: keep the Office brand everyone knows (and loves?), plus highlight its continual availability (as in 365 days a year, 7 days a week, 24 hours a day).


Remember, when O365 rolled out, the idea of depending on a subscription web service was new. Their brand managers had to give you assurances quickly that their product was reliable.


Or at least that’s what Microsoft’s Facebook post from 2010 says. Unfortunately the link to their official blog post is broken.


Explained: SharePoint versus Office 365

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