SharePoint: Cloud or On-Premises?

Eric Riz

by Eric Riz on 7/2/2015

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Applies to:
cloud, on-premises, SharePoint, SharePoint 2016, SharePoint Online

When the rumor mill began to churn ahead of the SharePoint 2013 release, I was party to many client conversations about its pending hybrid and cloud capabilities. C-level staff at some of the world’s leading organizations were asking tough questions that demanded detailed and thought-provoking answers. How would it work? What would companies have to know to successfully create and implement a cloud strategy? Where does the data live? What if there is a data breech? It was easily the most hotly debated discussion around the product, and the amazing thing is, companies are having the same conversations today. No, this isn’t because Microsoft hasn’t provided an effective roadmap, or the assistance companies need to succeed in the cloud. Nor is it because the ecosystem hasn’t supported the growth of companies looking to use the product over the long term. In fact, the opposite is true; Microsoft and supporting organizations have embraced cloud and on-premises SharePoint worlds, including the rapid push to Office 365.

At Microsoft Ignite in May, Microsoft’s Seth Patton and Bill Baer held a town-hall session to answer some questions about SharePoint’s current focus and long-term vision. As the Senior Director of Product Management for the SharePoint team and Senior Technical Product Manager respectively, Seth and Bill spoke about the current split between cloud and on-premises versions. Patton reported that 80% of Fortune 500 companies are still using SharePoint on-premises, with 38% of the overall client base using the online version through Office 365. That means 62% of SharePoint customers are still using the on-premises version. In an interesting coincidence, a Forrester Research report in 2013 surveyed IT decision makers who responded that 62% were continuing along a plan to deploy SharePoint 2013 on-premises. Now just over two years later, these statistics show a true stay on the original deployment path of these organizations.

These statistics are quite telling, and with them in place, I see no way that Microsoft can leave their on-premises customers unsupported. Traditionally, Microsoft has supported their products for 10 years following the initial release date (that means 2023 for SharePoint 2013). The breadth and depth of these organizations was made clear to me last year while speaking at an event.

Following a session I presented, an attendee asked my thoughts about the longevity of the on-premises product. Without the aid of the statistics above, I told her what I felt was common and, based on historic support timelines, provided the 10-year average. The attendee then asked a very pointed question; did I think Microsoft would commit to another on-premises version after 2016? I answered and said frankly that I didn’t know the answer, but that I hadn’t heard of any rumors to that effect. I then asked which company the attendee worked for, and it turned out I was speaking with someone from a federal agency. It was at this point that I realized Microsoft will always have some customers using on-premises versions for various reasons, and they will always have to be supported.

In the conversations I have had over the past few months with customers and partners, a common question is how SharePoint will evolve in Office 365, and what the future holds for SharePoint on-premises. The reason I detail this story is that I believe it not only answers these questions, but also tells of the broader strategy Microsoft has to set and deliver against.

Though Microsoft is clearly delivering against its cloud-first, mobile-first vision, it also has to satisfy market demands and the long-term needs of its largest and most trusted customers, such as the aforementioned federal agency. In a SharePoint context, this means providing the offerings of Office 365 and hybrid approaches to drive the online needs of some customers, while supporting enterprises that stay on-premises for the long run.

With these statistics and prognosticators galore ruminating on what the future will hold, there is one piece of the SharePoint strategy that is not changing; the common need to collaborate and perform the business-level functions that the product was built for. I’m fascinated by the identical number of on-premises deployments at 62%; I believe they are telling of the boots-on-the-ground reality that many enterprises are facing today. While Microsoft has positioned themselves as the long-term cloud company with the products to deliver against this promise, customers are remaining true to their needs and standing by their strategies and budgets.

Topic: Cloud

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