SharePoint Cost And Licensing How Much Does SharePoint Cost
Understanding SharePoint pricing and licensing is essential for enterprise budget planning, especially as Microsoft continually evolves its licensing bundles across Microsoft 365, standalone plans, and add-on storage. This comprehensive guide breaks down every SharePoint licensing option, hidden costs, and enterprise strategies for optimizing your investment.
SharePoint Online Standalone Plans
Microsoft offers two standalone SharePoint Online plans for organizations that need SharePoint without the full Microsoft 365 suite. These are priced per user per month and include OneDrive for Business storage.
| Feature | SharePoint Plan 1 | SharePoint Plan 2 |
|---|---|---|
| Price per user/month | $5.00 | $10.00 |
| OneDrive storage | 1 TB per user | Unlimited (5 TB default, more on request) |
| SharePoint storage | 1 TB + 10 GB/user | 1 TB + 10 GB/user |
| Advanced compliance | No | Yes (DLP, eDiscovery, In-Place Hold) |
| Search & intelligence | Basic search | Advanced search with custom result sources |
| Access Services | No | Yes |
SharePoint in Microsoft 365 Bundles
Most enterprise customers access SharePoint through Microsoft 365 bundles, which include SharePoint alongside Exchange, Teams, and other productivity tools. Understanding which features are included at each license tier prevents unnecessary add-on purchases.
- Microsoft 365 Business Basic ($6/user/month): SharePoint Online, Teams, Exchange Online (50 GB), OneDrive (1 TB), web versions of Office apps. Suitable for small businesses.
- Microsoft 365 Business Standard ($12.50/user/month): Everything in Basic plus desktop Office apps, Bookings, and advanced meeting features.
- Microsoft 365 E3 ($36/user/month): Full enterprise suite with advanced compliance (eDiscovery, DLP), Azure Information Protection P1, and 5 TB OneDrive storage. The most common enterprise tier.
- Microsoft 365 E5 ($57/user/month): Everything in E3 plus Power BI Pro, advanced threat protection, Cloud App Security, Audio Conferencing, and advanced compliance (auto-classification, advanced eDiscovery).
- Office 365 F3 ($4/user/month): Firstline worker tier with limited SharePoint access (2 GB OneDrive, no custom site creation by default).
Hidden Costs and Add-Ons
The sticker price of SharePoint licensing rarely reflects the true total cost of ownership. Enterprise organizations must budget for storage overages, compliance add-ons, migration costs, and ongoing administration.
- Additional storage: SharePoint Online base storage is 1 TB + 10 GB per licensed user. Additional storage can be purchased at approximately $0.20/GB/month ($200/TB/month), which adds up quickly for content-heavy organizations.
- Microsoft 365 Archive: For cold/inactive content, Microsoft 365 Archive storage costs approximately $0.05/GB/month, significantly cheaper than active storage but with slower access times.
- Third-party tools: Backup solutions (Veeam, AvePoint), migration tools (ShareGate, Quest), and governance platforms (Rencore, Orchestry) add $1-5/user/month.
- Custom development: SPFx web parts, Power Automate flows, and Power Apps integrations require developer time or consulting hours.
- Training and adoption: Budget $50-200/user for initial training and change management to ensure ROI on your SharePoint investment.
- Compliance add-ons: Advanced Compliance ($12/user/month) and Microsoft Defender for Office 365 ($2-5/user/month) may be required for regulated industries.
Enterprise Licensing Strategies
Large organizations can significantly reduce SharePoint costs through strategic licensing approaches. EPC Group regularly helps enterprises optimize their Microsoft 365 licensing to eliminate waste and ensure compliance.
- Mixed licensing: Not every user needs E5. Use E5 for knowledge workers and power users, E3 for standard employees, and F3 for frontline workers. This can reduce per-user costs by 30-50%.
- Enterprise Agreement (EA): Organizations with 500+ users benefit from volume licensing discounts through Microsoft Enterprise Agreements, typically saving 15-25% versus monthly subscription pricing.
- Storage optimization: Implement retention policies and archival strategies to keep active storage within included limits. Moving 30% of content to archive storage can save $50,000+ annually for large organizations.
- License reclamation: Audit license assignments quarterly to reclaim licenses from departed employees, inactive accounts, and over-provisioned users. Most enterprises have 10-20% license waste.
- Add-on consolidation: Review standalone add-on purchases against bundle inclusions. Many organizations pay separately for features already included in their E3 or E5 licenses.
SharePoint Server On-Premises Costs
For organizations that require on-premises SharePoint (due to regulatory, data sovereignty, or air-gapped network requirements), licensing follows a different model with perpetual or subscription editions.
- SharePoint Server Subscription Edition: Requires a server license (~$8,000-9,000) plus user CALs ($100-130 each) or device CALs. Annual Software Assurance is required for updates.
- Infrastructure costs: On-premises deployments require SQL Server licensing ($15,000+ per core), Windows Server licenses, hardware/VM costs, storage, backup, and disaster recovery infrastructure.
- Administration costs: Dedicated SharePoint administrators, database administrators, and infrastructure support add $150,000-300,000+ in annual staffing costs.
- Total cost comparison: For most organizations, SharePoint Online is 40-60% less expensive than on-premises when factoring in infrastructure, licensing, and personnel costs over a 5-year period.
Why Choose EPC Group for Licensing Optimization
With 28+ years of Microsoft consulting and Microsoft Gold Partner credentials, EPC Group has optimized licensing for enterprises spending $500K to $50M+ annually on Microsoft 365. Our founder, Errin O'Connor, authored four bestselling Microsoft Press books and brings deep expertise in aligning licensing with business requirements and compliance mandates.
- Microsoft 365 licensing audits that identify waste and optimization opportunities
- Enterprise Agreement negotiation support and renewal strategy
- Mixed-licensing architecture design for organizations with diverse user populations
- Storage optimization and archival strategies to reduce monthly costs
Need Help Optimizing Your SharePoint Licensing Costs?
EPC Group's licensing experts will audit your current Microsoft 365 spend, identify savings opportunities, and design an optimized licensing strategy tailored to your organization.
Frequently Asked Questions
Is SharePoint free with Microsoft 365?
SharePoint Online is included in all Microsoft 365 business and enterprise plans (Business Basic, Business Standard, E1, E3, E5, and F3). There is no additional per-user cost for SharePoint beyond your Microsoft 365 subscription. However, standalone SharePoint Plan 1 ($5/user/month) and Plan 2 ($10/user/month) are available for organizations that need only SharePoint without other Microsoft 365 services.
How much storage does SharePoint Online include?
SharePoint Online provides 1 TB of base tenant storage plus 10 GB per licensed user. For an organization with 1,000 users, this equals 1 TB + 10 GB x 1,000 = 11 TB total. Additional storage can be purchased at approximately $0.20/GB/month. Microsoft 365 Archive storage for inactive content is available at approximately $0.05/GB/month.
Is SharePoint Online cheaper than on-premises?
For the vast majority of organizations, yes. SharePoint Online eliminates server hardware, SQL Server licensing, Windows Server licensing, backup infrastructure, and the need for dedicated SharePoint/database administrators. A typical 500-user on-premises deployment costs $200,000-400,000 in year one and $80,000-150,000 annually thereafter, while SharePoint Online via Microsoft 365 E3 costs approximately $216,000/year with no infrastructure overhead.
What is the difference between E3 and E5 for SharePoint?
SharePoint functionality is identical between E3 and E5. The difference lies in the surrounding services: E5 adds Power BI Pro, advanced threat protection (Microsoft Defender for Office 365 Plan 2), Cloud App Security, advanced compliance (auto-labeling, advanced eDiscovery, customer lockbox), and Audio Conferencing. If you primarily need SharePoint with standard compliance, E3 is sufficient.
Can I mix license types within my organization?
Yes, and this is a recommended cost optimization strategy. You can assign E5 to executives and power users, E3 to standard knowledge workers, and F3 to frontline workers within the same tenant. Each user's SharePoint experience is determined by their assigned license. EPC Group regularly designs mixed-licensing architectures that save enterprises 30-50% compared to blanket E5 deployments.
Related Resources
Continue exploring sharepoint insights and services