SharePoint vs Server: A guide for SMEs

Sharepoint file server

Every so often, our London based business clients ask if SharePoint is a suitable replacement for their current file server. It’s a valid question, as some businesses use their in-house server device solely to store and edit files. In many cases SharePoint could replace a file server, but only under specific circumstances.

Like any platform, SharePoint has its own set of strengths and weaknesses. And, depending on certain factors of your business, its uses can be leveraged to your advantage. So, here we’ll be taking a closer look at SharePoint to decide whether it offers a better file storage alternative for small-to-medium sized businesses.

What is SharePoint in Microsoft 365?

SharePoint in Microsoft 365, or simply SharePoint Online, is a cloud-based service used to create intranet sites. This means you can securely store, organise, and share files amongst staff within your organisation.

In comparison to Microsoft’s OneDrive which also acts as a file saving facility, SharePoint enables greater content collaboration. Sites are categorised into ‘team sites’ for private project collaboration online, and ‘communication sites’ for fewer admins to share information amongst a larger group.

SharePoint Strengths


SharePoint is available at a very cheap price either on:

  • A Microsoft 365 plan, such as ‘Business Standard’ which comes with Office software (Word, Excel, Outlook, etc.), new apps (Loop, Clipchamp) and secure cloud services (OneDrive, SharePoint) at £10.30 per staff member, per month.
  • A standalone SharePoint plan at £4.10 per staff member, per month.

Buying a server can be a big expense. This not only goes for the upfront hardware and set-up costs, but also in terms of on-going maintenance. Once a server is set-up it must be constantly monitored, requiring a significant amount financial and labour upkeep. The server’s Operating System (OS) software must be regularly updated, and tan administrator will be required to make any changes. For SMEs, this type of work will incur a fee from your IT support partner. In larger companies, running and maintaining servers may require IT human resources.

Seamless online and offline file access

With SharePoint, files are stored on your company’s online portal through the cloud, but they can also be synced to your hard drive. By using the ‘OneDrive for Business sync’ you can create a two-way sync. Any file changes made on computers are then uploaded to the online portal and sent to all other staff members’ computers. This will however depend on permission rights.

The sync feature is very beneficial for businesses who have staff working remotely. So, whether you’re working from home, or on the road you can access and edit important work files. When edits are made to a file offline, they will be immediately uploaded to the portal once the device regains internet connection. This will allow the sync process to kick in as described.

The OneDrive for Business sync works well but sometimes Mac users can experience minor bugs. Issues such as unstable internet connections and big file sizes can limit sync capabilities, however Microsoft are working hard to make improvements.


Unlike a file server, SharePoint can be customised to streamline business processes and reduce valuable time spent on repetitive manual tasks.

Features like Power Automate allow employees to automate tasks in SharePoint and across other Microsoft 365 apps. For example, you could automate sending a customised email to colleagues when new files are uploaded. This ensures files can be swiftly accessed for editing, review, and approved where necessary.

Many of our London clients working in law firms and marketing agencies use this functionality. It eliminates the process of approving changes manually and maintains staff productivity.


When versioning is turned on, any changes you make to a file is stored as a version. If you want to access an older version of the file later down the line, you will have various versions available to access. All you have to do is select a version from the version history that you want to restore. This feature protects you from data loss as you won’t suffer from accidental deletion or unauthorised access.

Microsoft backs up data every 12 hours with a retention rate of 14 days.

SharePoint Limitations

Other services & applications

If your company currently uses an in-house server for Domain Controller benefits, SharePoint might not be the right choice for you. The traditional file server can offer a centralised user login, group policies, and often hosts other applications. Additionally, if you wish to move these services off your server, you’ll need to migrate to cloud solutions. However, if this isn’t a necessity, a Microsoft 365 package alone could meet your business needs.

Number of files

When using the computer hard disk syncing functionality, there is a limit of 5,000 files per ‘Library’. This means your HR folder can have 5,000 files, your Accounts folder can have 5,000 files, and so on. You can create as many file libraries as needed, given the total storage doesn’t exceed 25 terabytes (TB).

Nevertheless, you should maintain control as having many libraries can impact the reliability of the syncing tool. This system can also become rapidly confusing for some staff members, e.g. ‘Marketing 1’, ‘Marketing 2’, ‘Marketing 3’.

For companies with many files this could be very limiting. However, there are rumours that Microsoft might be increasing the 5,000 file limit per library.

Computer hard disk space & internet bandwidth

If your company works with many files or large files (e.g. Photoshop) you could face a serious problem. For example, imagine a scenario where 700GB of data needs to be held on all your employees’ computers. Firstly, this will demand large and resilient hard disks for each employee device. Moreover, if multiple staff members are often amending files or creating new documents, they will drain the internet bandwidth. This is because automated syncing occurs across all machines whenever a change is made, or a new file is uploaded.

Many marketing agencies, design studios, architect practices and other businesses using large files should avoid SharePoint for these reasons.


SharePoint Online is very secure, so where possible all documents and files should be solely stored on this platform. Avoid uploading to PCs and Macs using the sync tool as much as possible.

If all files are being synced onto a laptop and it’s stolen, the thief will have easy access to all files residing on the device. We recommend that laptops holding any confidential data are encrypted to help mitigate this scenario.

File Names

If you’re looking to migrate your files from your server to SharePoint there are two important points to note:

  •  Folder name and file name combinations can have up to 250 characters. This includes the URL path denoting the location in the online site.
  •  File names containing most non-alphanumeric characters are not supported. If you are migrating from a Mac or ‘AFP’ environment this is a critical point to remember.

File Types on the SharePoint web portal

SharePoint works best when Office documents are stored within it (i.e. Word, Excel, etc.), simply because those file types can be edited within the web portal. However, most file types can be accessed, albeit as a view only file (PDF, JPEG, MP3).

Certain files, including executable (.exe), app (.app), and others are not compatible or accessible for syncing.

Note: With the sync tool, all file types can be accessed and edited from PCs & Macs.


We highly recommend SharePoint for SMEs that simply require access to ‘light’ files, and not too many of them. Therefore, businesses with more staff can benefit from SharePoint if they don’t require copious large file uploads. Also, startups can benefit from this platform at an affordable monthly cost alongside the amenities of Office applications.

Companies requiring a diverse range of services and applications will generally prefer to stick with their file servers. Additionally, organisations that regularly create and share large files between teams will do the same. A combination of the two systems can also work very well in some instances.

Ultimately, choosing between SharePoint and a file server all depends on your IT strategy. If you are considering the switch, closely examine whether your business can work effectively within the limitations we’ve detailed.

Get in touch

As a London-based SME and IT support provider, we are always looking for ways to use our expertise and give advice to other SMEs looking to optimise their systems.

So, if your London business is thinking of migrating to, or implementing SharePoint, please get in touch. We have Subject Matter Experts who can help and support your business – read on for further information about our Microsoft 365 support service.