Choosing Between Cloud and On-premises Deployment for SharePoint

In April 2011, Microsoft launched Office 365 – a comprehensive set of Software as a Service (SaaS) solutions that allow any organization to obtain hosted, cloud-based access to Exchange, Lync, Office Web Applications – and SharePoint Online. All offer guaranteed uptime, fault tolerance, contractual service levels and clear, predictable pricing.

Many organizations start by moving email to the cloud. Few organizations have highly customized Exchange email environments. For many, it’s a no-brainer to migrate existing mailboxes to a hosted version of Exchange, because it simplifies the level of infrastructure support for fault tolerance, recovery, web access, border security, archiving, etc. And, the services and configuration used for Exchange service on premises are usually the same among different firms. It’s email.
SharePoint is different. Imagine a world where SharePoint on-premises never existed. (Imagine.) Now, suppose that in a world of Google Docs, Yahoo Mail, and Box.Net Microsoft had announced a new service that allowed:
• Usage on demand
• 100GB of content databases
• Collaboration team sites, extranets, public web sites
• My Sites
• Rich browser forms (InfoPath), custom code and workflows
• Cross-site, self-tuning secure search
• Managed taxonomy and folksonomy
People would be blown away by the depth of functionality Microsoft made available in the cloud. I mean it – there would be wild celebrations and stampedes in the street!
But that’s not the perception of Office 365-based SharePoint. Instead, there’s a lot of needless focus on “what’s left out.” (SharePoint Online does lack a few features relative to on-premises SharePoint.)
Determining whether to use SharePoint Online instead of on-premises SharePoint can be complicated. Here’s a simple set of questions to help determine if SharePoint Online makes sense. For each question, give yourself points as noted in the box.

Question Yes No
Are you already using custom-coded SharePoint solutions, such as third party tools or in-house Visual Web Parts? 0 3
Are you free from strict geographic control and accountability for your SharePoint content (e.g. not subject to HIPAA, SAS70, US FDA, Sarbanes Oxley or other regulations)? 4 0
Do you already have SharePoint engineers on staff? 0 3
Do you have a limited IT capital budget, but significant IT operating budgets? 1 0
Do you have a mature, on-premises installation of SharePoint 2010? 0 3
Do you have access to dedicated SharePoint developers 0 2
Do you have as many or more users outside your corporate network as you do inside the firewall? 3 0
Do you need to downsize or eliminate physical servers and data centers used with SharePoint? 3 0
DO you need to migrate off a legacy installation of SharePoint 2007 or Windows SharePoint Services 3.0? 3 0
Do you need to rapidly set up a pilot or proof of concept SharePoint site, independent of any current usage? 3 0
Do you project growth to a very large content pool over the next year, 500GB or more? 0 2
Do you use or need to use SharePoint-hoisted business intelligence solutions such as Performance Point? 0 2

Add up your scores, and see how you match up:

  • 32: You are probably already on SharePoint Online or Office 365. Enjoy the view from your cloud!
  • 24-31: You are a strong candidate for SharePoint Online. Study carefully, and understand some of the functional tradeoffs of the platform. SharePoint Online doesn’t support:

> Deployment of custom solutions that require direct access to the server, such as visual web parts. It does support sandboxed solutions, however.
>  PowerPivot
>  SQL Server Reporting Service Integration
>  Business Connectivity Services (originally this was a blanket restriction, but a slipstream release in 2011 added support for access to web services- based remote data in O365 BCS).
>  FAST Search Server Integration

>  Web Analytics
>  Site collections greater than 100GB

  • 10-23: You are somewhere in between. Understanding the platform advantages and tradeoffs is essential to figuring out your cloud strategy. Odds are good that you may use a hybrid approach in which parts of your SharePoint world remain on premises, with other aspects living on Office 365.
  • 0-9: If SharePoint is already living in your data center, it’s probably in the right place.

It’s also important to remember that a cloud vision is almost always a future-looking strategy. Since the cloud is uniformly available, it’s easier to deliver content to users with less respect for their immediate location or device (PCs, tablets, smartphones).

Similarly, although Office 365 and SharePoint Online lack features relative to on-premises SharePoint, this is not expected to be a permanent situation. If we project forward through the next release of SharePoint, we can forecast a time when the on-premises and cloud versions of SharePoint provide nearly identical functions.

What will make it really interesting comes after that – when new features start showing up in the cloud before they are bundled into the next major SharePoint on-premises release. A cloud-hosted SharePoint offering with better functions and simplified ease of operation will be a hard combination to deny for many current on-premises users.


Chris Mc Nulty

Chris McNulty is a strategic product manager for SharePoint Solutions at Quest Software, where his responsibilities include the strategic product direction for Quest’s SharePoint solutions. Chris is a Microsoft Certified Technology Specialist (MCTS), Microsoft Certified Systems Engineer (MCSE), and a member of the Microsoft Solutions Advocate and MVTSP programs. A frequent speaker at events around the U.S., Chris is the author of the “SharePoint 2010 Consultant’s Handbook – Managed Metadata Service,” and blogs at and

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