On-premises SharePoint vs. SharePoint Online in 2026

Most organizations aren’t debating whether to move to the cloud anymore. They’re figuring out what to do with the on-premises (on-prem) SharePoint environments they still have.

The gap between SharePoint Server and SharePoint Online keeps growing. Microsoft 365 gets new features first. Copilot runs in the cloud. And support for SharePoint Server 2016 and 2019 ends in July 2026.

That’s why the conversation around SharePoint on-premises versus SharePoint Online has shifted in 2026. For many teams, the question isn’t which platform to adopt. It’s whether keeping on-prem still makes sense from a cost, security, and long-term M365 strategy perspective.

Running SharePoint on-premises in 2026

Microsoft plans to sunset support for SharePoint Server 2016 and 2019 in 2026. To avoid security breaches, anyone using these systems must move to either SharePoint Server Subscription Edition (SPSE) or SharePoint Online.

SPSE is Microsoft’s current on-premises SharePoint offering, replacing the 2013, 2016, and 2019 versions. Most organizations don’t move to SPSE because it’s more modern. They do it because they need to stay on-prem, whether that’s due to regulatory requirements, legacy system dependencies, data residency rules, or limited time and resources to complete a full cloud migration. SPSE gives those teams a way to stay supported while maintaining the on-prem architecture they already run.

Here’s what you need to know about SPSE:

• Architecture and deployment model: You host SPSE in your own local data centers (it’s designed for on-prem infrastructure, but you could technically host it in a private cloud, too). How you deploy architecture, server roles, and network dependencies is all up to you.
• Licensing and cost structure: SPSE uses a Server/Client Access License (CAL) model, meaning you need server licenses and CALs for every user. You’ll also need to pay for any hardware you need to store files and keep things running.
• Customization and integration flexibility: A full range of customization options lets you build custom intranet portals and internal knowledge bases. SPSE also directly integrates with several other enterprise apps and workflows.
• Security controls and compliance: You’re in charge of everything from data retention policies to firewall configurations. While that can be a positive in regulation-heavy environments, that’s a lot of overhead for most industries. 
• Maintenance and IT management: Updates, performance tweaks, monitoring, and disaster recovery are all your responsibility. SPSE offers rolling updates, but you’ll still need a solid level of management infrastructure in place.
• Migration and upgrade process: You’ll need a detailed SharePoint migration plan, test environments to check for errors, and a multi-phase initiative. If you’re upgrading from earlier SharePoint versions, SPSE covers database-attach upgrades, but it does require some technical know-how. 

What’s SharePoint Online? Key insights

SharePoint Online is Microsoft’s cloud-based version of SharePoint Online, delivered as part of M365. It shifts infrastructure, updates, and scaling to Microsoft so your team focuses less on server management and more on governance and adoption.

Here’s what changes when you move to SharePoint Online:

• Frequent feature and security updates: Microsoft handles updates and patching. New features roll out automatically, and security fixes don’t require maintenance windows.
• Cloud-based maintenance and management: There’s no server infrastructure to maintain. Capacity, availability, and performance are all managed in Microsoft’s cloud.
• Cost structure: You move from hardware and server investments to a subscription model. That reduces infrastructure overhead, but licensing and storage planning still require oversight.
• Integration with Microsoft 365: SharePoint Online connects natively with Teams, OneDrive, and Copilot. That integration is where many organizations start seeing real value during a migration from SharePoint on-prem to SharePoint Online.

SharePoint Server vs. SharePoint Online: What changes when you move

In 2026, most organizations aren’t choosing between two equal platforms. They’re trying to understand the differences between SharePoint Online and on-premises And what they mean for infrastructure, budgeting, and long-term M365 planning.

The biggest shifts show up in how you host and control your environment, budget for growth, handle updates, and scale.

Infrastructure ownership

With SharePoint Server (including SPSE), your team owns the infrastructure. That includes servers, storage, configurations, data residency, and disaster recovery planning. You control the environment, but you’re also responsible for uptime, scaling, and redundancy.

With SharePoint Online, infrastructure management shifts to Microsoft. Your team focuses less on  maintaining servers and more on governance, permissions, and content lifecycle management.

For teams planning a move, migration complexity is often the biggest blocker. Preserving site structures, carrying over groups, permissions, and structures and cleaning up legacy configurations takes planning and the right tooling. The ShareGate migration tool helps streamline that process while giving you visibility into what’s moving and what should be retired. 

Cost model and budgeting

Running SharePoint Server requires hardware investments, CALs, software assurance, and ongoing maintenance. As usage grows, infrastructure costs typically grow with it.

SharePoint Online completely flips this model. Hardware expenses disappear, but licensing and storage planning still require oversight. The shift changes how you forecast and manage IT spend.

Maintenance and update model

On-prem environments require patching, monitoring, performance tuning, and security updates managed internally. Even with SPSE’s rolling update model, maintenance remains an ongoing responsibility.

With SharePoint Online, updates happen automatically through Microsoft 365. Your team no longer schedules patch windows or maintains server health, but governance and change management still matter. 

Scaling and compliance responsibilities

Scaling a SharePoint Server environment requires additional infrastructure planning, procurement, and configuration. Expanding capacity often means investing in more hardware. 

In SharePoint Online, capacity and availability scale with Microsoft’s cloud. Compliance features are built into M365, but staying aligned with regulations still depends on how you configure policies, manage access, and govern data.

Choosing the right path forward in 2026

Today, most organizations are working with an existing SharePoint environment and trying to determine their next step.

Some stay on-prem because of regulatory constraints, legacy integrations, or limited migration capacity. Others are ready to modernize but need a structured plan. And many are feeling pressure from Microsoft’s roadmap, collaboration demands, and Copilot readiness.

Here are a few common paths organizations are taking in 2026:

• Staying on-prem: If you plan to remain on-prem, moving to SPSE is no longer optional. With Microsoft ending support for SharePoint Server 2016 and 2019 in July 2026, unsupported environments increase security and compliance risk.
• Moving to a hybrid strategy: A hybrid approach can offer flexibility if regulatory or operational constraints prevent a full migration. Many teams start by moving lower-risk or collaboration-heavy workloads to SharePoint Online while keeping sensitive systems on-prem. Hybrid environments do add management complexity, so success depends on clear governance and a phased migration plan.
• Migrating to the cloud: For organizations ready to modernize fully, migrating to SharePoint Online requires more than a technical move. It often involves cleaning up legacy content, testing migrations, restructuring permissions, and redefining governance. Tools like ShareGate Migrate help reduce migration risk by preserving structure and permissions while giving visibility into your environment so you can decide what should move and what should be archived. 

Make migration a breeze with ShareGate

If you’re planning your next step—whether that’s upgrading on-prem, consolidating tenants, or migrating to SharePoint Online—a structured approach reduces risk and disruption.

ShareGate Migrate gives you a clear way to assess, plan, and execute SharePoint migrations with full visibility into your environment. You can see what you’re moving, control how it moves, and clean up legacy content along the way.

With support for SharePoint Online and SPSE, ShareGate helps teams modernize at their own pace, whether they’re consolidating tenants, preparing for Copilot, or moving off unsupported infrastructure.

Request a demo to see how ShareGate Migrate can help you plan and manage your SharePoint migration with clarity and control.