The 2026 Migration Decision Guide: TCO analysis, security comparison, and a data-driven framework for the most important SharePoint decision your organization will make.
By Errin O'Connor, Founder & Chief AI Architect, EPC Group
In 2026, SharePoint Online is the right choice for most organizations. Microsoft invests exclusively in SharePoint Online for new features — AI, Copilot, Purview governance, and Viva Connections are all Online-only. This guide covers the TCO comparison, security and compliance breakdown, migration approaches, hybrid architecture, and a decision framework to determine the right path for your organization.
Should you migrate from SharePoint on-premises to SharePoint Online? For most organizations, the answer is yes by 2026. SharePoint Server 2019 will lose extended support on July 14, 2026. After this date, there will be no more security patches or compliance coverage.
SharePoint Online offers several advantages:
Only organizations with strict data sovereignty rules against cloud storage or those in air-gapped classified environments should remain on-premises.
All other organizations should begin planning their migration now.
SharePoint on-premises has supported enterprises for 20 years. However, 2026 will bring a major shift. Microsoft is now prioritizing SharePoint Online.
The gap in AI capabilities between cloud and on-premises is too large to bridge. Here are the key points:
Moreover, the costs of maintaining old server infrastructure are increasing. In contrast, cloud economics are getting better.
Organizations that postpone this transition are not ensuring stability. Instead, they are building up:
This guide is based on EPC Group's experience migrating more than 500 SharePoint environments to Microsoft 365. Our work spans various sectors, including:
We provide an honest comparison, highlighting scenarios where on-premises solutions may still be appropriate. This information helps your organization make a confident, data-driven decision.
If you are evaluating SharePoint consulting partners for this migration, or want to understand how leading migration firms approach enterprise SharePoint moves, those resources complement this decision guide.
Microsoft has been signaling the end of on-premises SharePoint for several years. The timeline below clearly shows this trend. It highlights the urgency for organizations still using SharePoint Server 2016 or 2019.
July 2021
Microsoft's bridge product for organizations not yet ready for cloud. Receives feature parity updates from Online — but always 12-18 months behind.
April 2023
No more security patches for SP 2016. Organizations still running it are exposed to unpatched vulnerabilities.
January 2024
No more feature updates or non-security bug fixes. Only critical security patches continue through extended support.
July 2026
Final end of all Microsoft support. No security patches, no bug fixes, no technical assistance. Running SP 2019 after this date is an active security and compliance risk.
Ongoing
SE remains supported but will always trail SharePoint Online by 12-18 months. AI features (Copilot, Premium) are not planned for SE. The feature gap widens every quarter.
2026+
SharePoint Premium, Copilot integration, AI agents, Loop integration, and Mesh experiences are Online-exclusive. The on-premises product is in maintenance mode in all but name.
EPC Group Advisory: If your organization is still using SharePoint Server 2019, you have less than 3 months of security coverage left as of April 2026.
It is important to start planning your migration now.
Even a quick lift-and-shift to SharePoint Online is better than running an unpatched on-premises farm.
For organizations on SharePoint Server SE, the urgency is less critical. However, the strategic direction remains the same:
SharePoint Online leads in 9 of 12 categories. On-premises retains advantages only in deep customization, data sovereignty, and network control.
| Feature | SharePoint Online | SharePoint On-Premises |
|---|---|---|
| AI / Copilot IntegrationOnline | Microsoft 365 Copilot, SharePoint Premium AI, Copilot Agents | None — no AI capabilities available |
| Document IntelligenceOnline | SharePoint Premium: auto-classification, extraction, content assembly | Manual metadata tagging only |
| SearchOnline | Microsoft Search with AI-powered semantic search, Copilot answers | SharePoint Search (keyword-based, no AI augmentation) |
| CollaborationOnline | Real-time co-authoring, Teams integration, Loop components | Basic co-authoring (Office Web Apps required separately) |
| Mobile ExperienceOnline | Native SharePoint mobile app with offline access | Browser-only (responsive design varies by master page) |
| Storage | 1 TB per org + 10 GB per licensed user (pooled) | Limited by SQL Server storage and hardware budget |
| Customization DepthOn-Prem | SPFx web parts, Power Platform, Graph API, Copilot extensibility | Farm solutions, sandbox solutions, full server-side code access |
| Update CadenceOnline | Continuous updates — new features monthly, no downtime | Cumulative updates quarterly, requires planned downtime |
| Compliance ToolsOnline | Purview DLP, sensitivity labels, retention, eDiscovery, audit logs | Basic audit logs, IRM (requires AD RMS), limited DLP |
| Backup & DROnline | Microsoft manages geo-redundant backup, 93-day recycle bin | Self-managed: SQL backups, farm DR, secondary datacenter |
| Data SovereigntyOn-Prem | Multi-Geo available ($), data residency options expanding | Full control — data never leaves your datacenter |
| Network ControlOn-Prem | Internet-dependent, Private Link available for hybrid | Full LAN/WAN control, air-gapped possible |
SharePoint Online wins 9 categories, on-premises wins 3, and storage is a tie. The feature gap is widening every quarter as Microsoft invests exclusively in the cloud platform.
To make a fair cost comparison, consider the entire Microsoft 365 bundle that comes with SharePoint Online. This includes:
When you factor in these components, the cloud economics become very appealing.
| Cost Category | SharePoint Online (M365 E3) | SharePoint On-Premises | Notes |
|---|---|---|---|
| Server Hardware (3 servers) | $0 | $45,000-$75,000 | Web front-end, app, SQL Server |
| SQL Server Licensing | $0 (included) | $45,000-$90,000 | Enterprise edition for HA |
| Windows Server + CALs | $0 (included) | $15,000-$25,000 | Server licenses + 500 CALs |
| SharePoint Server License | $0 (included) | $8,000-$12,000 | Plus 500 SharePoint CALs |
| M365 / SharePoint Online License | $648,000 | $0 | $36/user/mo x 500 x 36 months (E3) |
| IT Staff (SharePoint Admin) | $36,000 | $270,000-$360,000 | Online: 0.2 FTE; On-prem: 1.5 FTE |
| Datacenter / Hosting | $0 | $54,000-$108,000 | Power, cooling, rack space, network |
| Backup & DR Infrastructure | $0 (included) | $40,000-$65,000 | Secondary site, backup software |
| Security Patching & Updates | $0 (Microsoft-managed) | $27,000-$45,000 | Staff time for CU testing and deployment |
| 3-Year Total | $684,000 | $504,000-$780,000 | Online includes full M365 suite |
| Per-User / Month | $38/user/mo | $28-$43/user/mo | On-prem is SharePoint only; Online is full M365 |
Key Insight: The on-premises 3-year cost ranges from $504,000 to $780,000. This amount covers only SharePoint. In comparison, the SharePoint Online cost is $684,000. This price includes the complete Microsoft 365 E3 suite, which offers:
SharePoint Online costs between $8 and $12 per user each month. This price includes bundled services.
This cost is about 60% lower than the on-premises option.
EPC Group develops detailed Total Cost of Ownership (TCO) models for each migration engagement. This ensures that the financial case is strong before you make a commitment.
The main concern about migrating to SharePoint Online is security. Many people think, “Our data is safer in our own datacenter.” However, this belief is often incorrect in 2026.
Microsoft invests over $4 billion each year in security for its cloud infrastructure. This budget is something no single enterprise can match.
The real question is not whether the cloud can be secure. Instead, it is whether your on-premises environment is actually more secure than what Microsoft offers.
Regulated industries face strict compliance requirements. Healthcare organizations must adhere to HIPAA. Financial firms need SOC 2 attestation. Government agencies require FedRAMP-aligned consulting expertise.
SharePoint Online with Microsoft 365 GCC or GCC High provides specialized compliance environments. These environments offer more than most on-premises deployments.
The compliance tools included are:
Replicating these tools on-premises with third-party solutions would cost hundreds of thousands of dollars.
The single most compelling reason to migrate to SharePoint Online in 2026 is AI. SharePoint Premium (formerly Syntex) and Microsoft 365 Copilot are transforming how organizations manage, find, and use content. None of these capabilities exist on-premises, and Microsoft has no plans to bring them to SharePoint Server.
AI models that automatically classify documents, extract key fields (dates, amounts, parties), and apply metadata — eliminating manual tagging across millions of documents.
Template-based document generation that pulls data from SharePoint lists, Dataverse, or other sources to create standardized contracts, proposals, and reports automatically.
Natural language search across your entire document library. Ask questions like "Find the latest vendor contract with renewal terms" and get AI-generated answers with source citations.
Build custom AI agents grounded in your SharePoint content. Create a compliance agent that answers policy questions, or an onboarding agent that guides new hires through documentation.
Native electronic signature workflows embedded directly in SharePoint document libraries — no third-party tools required for standard signature scenarios.
AI-powered metadata extraction that automatically populates SharePoint columns by reading document content — turning unstructured documents into structured, searchable data.
The AI Gap Is Permanent: Microsoft has confirmed that SharePoint Premium and Copilot features will not be available on SharePoint Server. This decision is permanent and not a temporary delay. AI features require:
These capabilities cannot function in an on-premises datacenter.
Every month you stay on-premises, the AI capability gap between your environment and cloud-first competitors grows.
SharePoint hybrid connects your on-premises farm to SharePoint Online. This setup provides a unified experience for users during your migration process. It is an important transitional tool.
However, EPC Group strongly advises against using hybrid as a permanent architecture.
Running both environments can:
The recommended strategy is a cloud-first hybrid approach. This means that all new sites and content will be created in SharePoint Online from the beginning.
Existing on-premises content will be migrated in planned phases.
The hybrid infrastructure allows users to access both environments smoothly during the transition. After the migration is finished, the on-premises farm will be decommissioned.
EPC Group typically uses a hybrid approach during a pre-migration phase that lasts 4 to 6 weeks. This is followed by wave-based content migration, which takes between 12 and 24 weeks. The process ends with the decommissioning of on-premises systems.
The total timeline for a hybrid-to-complete-cloud transition for a 500-user organization is:
There is no one-size-fits-all migration. The right approach depends on your content volume, customization complexity, organizational readiness, and timeline constraints.
Move content as-is from on-premises to SharePoint Online using migration tools. Fastest approach but carries forward existing information architecture problems.
Best for: Organizations with clean, well-structured content and minimal customizations
Timeline: 4-8 weeks for 500 users
Migrate department by department or site collection by site collection. Allows learning from early phases and adjusting the approach. Most common for mid-to-large organizations.
Best for: Organizations with 1,000+ users, moderate customizations, or change management concerns
Timeline: 12-24 weeks for 2,000 users
Deploy SharePoint hybrid to connect both environments. Redirect OneDrive and new sites to Online while gradually migrating existing content. Users experience a unified interface throughout.
Best for: Organizations that cannot tolerate any productivity disruption during migration
Timeline: 16-32 weeks including hybrid setup
Design a new information architecture in SharePoint Online from scratch. Migrate only active, valuable content — archive or decommission the rest. Most transformative but most effort-intensive.
Best for: Organizations with significant technical debt, poor IA, or major governance gaps
Timeline: 24-48 weeks for complex environments
One significant benefit of moving to SharePoint is the chance to tidy up your data. Many on-premises environments have 30-40% redundant, obsolete, or trivial (ROT) content. This type of content should not be migrated.
Transferring all content can waste time, storage, and money. It also perpetuates the information architecture problems from your on-premises setup.
Documents that have been accessed or changed in the last 18 months include:
This typically makes up 40-50% of the total content volume.
We manage various types of content, including:
Archive this content to Azure Blob Storage (cool tier) or migrate it to SharePoint Online with retention labels. This typically accounts for 20-30% of total content.
Duplicate files can make up 15-20% of total content. Other issues include:
Always verify with content owners before deletion. Typically, these issues account for 25-40% of total content.
EPC Group conducts a content assessment with the SharePoint Migration Assessment Tool (SMAT) and custom PowerShell scripts. This process creates a full inventory that includes:
This assessment is essential for every migration plan we create.
Customization migration is often where SharePoint projects become complex. SharePoint on-premises allowed extensive server-side customizations. These included:
However, these customizations cannot operate in SharePoint Online's multi-tenant environment. Each category of customization has a specific replacement path.
| On-Premises Component | SharePoint Online Replacement | Migration Complexity |
|---|---|---|
| InfoPath Forms | Power Apps (canvas or model-driven) | Medium — requires rebuild but improved UX |
| SharePoint Designer Workflows | Power Automate (cloud flows) | Medium — logic translates, triggers differ |
| SharePoint 2010 Workflows | Power Automate | Medium-High — may require architecture changes |
| Farm Solutions (.wsp) | SharePoint Framework (SPFx) web parts + APIs | High — full rebuild required |
| Sandbox Solutions | SPFx web parts or Power Platform | Medium — scope is typically smaller |
| Timer Jobs | Azure Functions + Microsoft Graph API | Medium — cleaner architecture in cloud |
| Custom Web Parts (server-side) | SPFx client-side web parts (React/TypeScript) | Medium-High — different programming model |
| Custom Master Pages | Modern site themes + SPFx extensions | Low-Medium — modern theming is simpler |
| Event Receivers | SharePoint webhooks + Azure Functions | Medium — event-driven architecture |
| BCS (Business Connectivity Services) | Power Platform connectors + custom APIs | Medium — better integration options available |
One major migration blocker is InfoPath forms. Many organizations manage between 50 and 200 InfoPath forms for tasks like purchase orders and employee onboarding.
EPC Group conducts a complete inventory of InfoPath forms. We categorize these forms by complexity:
We then create a prioritized plan for rebuilding these forms in Power Apps.
For organizations with extensive custom code, EPC Group recommends a parallel development approach. Begin rebuilding key customizations in SPFx and Power Platform 8-12 weeks before content migration starts. This method guarantees that the new solutions are tested and prepared for users when they move to SharePoint Online.
Use this weighted scoring framework to compare SharePoint Online with on-premises solutions for your organization. The scores reflect EPC Group's evaluation of a typical enterprise scenario. You can adjust the weights to fit your specific priorities.
| Decision Factor | Weight | Online (1-10) | On-Prem (1-10) | Reasoning |
|---|---|---|---|---|
| Data Sovereignty Mandate | 15% | 6 | 10 | On-prem wins only if regulations require data in your physical datacenter with no cloud exceptions |
| AI & Copilot Readiness | 15% | 10 | 1 | SharePoint Premium, M365 Copilot, and AI agents are Online-exclusive features |
| Total Cost of Ownership | 15% | 8 | 5 | Online delivers more value per dollar when full M365 suite is factored in |
| Security & Compliance | 15% | 9 | 6 | Microsoft Purview, Conditional Access, and zero-trust exceed most on-prem deployments |
| Customization Requirements | 10% | 7 | 9 | On-prem allows farm solutions; Online requires SPFx/Power Platform (sufficient for 90% of cases) |
| IT Staff & Expertise | 10% | 9 | 4 | Online eliminates server management; on-prem requires dedicated SharePoint farm admins |
| Feature Currency | 10% | 10 | 3 | Online receives monthly updates; on-prem is years behind in features |
| Collaboration & Remote Work | 10% | 10 | 4 | Teams integration, real-time co-authoring, and mobile access are Online strengths |
| Weighted Score | 100% | 8.6 | 5.3 | SharePoint Online wins by 3.3 points for the typical enterprise |
Are you required to keep all data in a physical datacenter you control with zero cloud exposure?
Yes → Stay on SharePoint Server Subscription Edition (SE). You are in the 5% of organizations with genuine air-gap requirements.
No → Continue to next question.
Do you have heavy farm solutions or server-side customizations that would take 6+ months to rebuild?
Yes → Deploy hybrid now. Begin customization modernization in parallel. Plan full migration within 12-18 months.
No → Continue to next question.
Is your SharePoint content reasonably organized with minimal customizations?
Yes → Execute a phased migration to SharePoint Online. Target 8-16 week completion.
No → Execute a greenfield rebuild. Design new information architecture in Online, migrate only active content, archive the rest.
EPC Group has been migrating SharePoint environments since SharePoint 2003. Our team has successfully completed over 500 migrations across various industries and SharePoint versions. We handle projects of all sizes, including:
We offer a proven methodology developed over 20+ years. Our expertise helps us navigate the technical, organizational, and compliance challenges that can impact the success of SharePoint migrations.
500+
SharePoint migrations completed
100+ TB
Largest single migration
Since 1997
Microsoft ecosystem expertise
For most organizations in 2026, yes. Microsoft has ended mainstream support for SharePoint Server 2019 and will end extended support in July 2026. SharePoint Server Subscription Edition provides a bridge, but Microsoft's investment is overwhelmingly focused on SharePoint Online — including AI features like SharePoint Premium (formerly Syntex), Copilot integration, and continuous feature updates. Organizations staying on-premises face increasing security risk, feature gaps, and rising infrastructure costs. The exception is organizations with strict data sovereignty requirements or air-gapped network mandates that prevent cloud adoption entirely.
Over three years for 500 users, SharePoint on-premises carries its own full cost stack (server hardware, SQL Server licensing, Windows Server CALs, SharePoint licensing, IT staff, power, patching, and disaster recovery). SharePoint Online via Microsoft 365 E3 costs approximately $648,000 over three years ($36/user/month Microsoft list price x 500 users x 36 months) — but this includes Exchange Online, Teams, OneDrive, and the full M365 suite. When you factor in the total bundle value and eliminated infrastructure costs, SharePoint Online delivers 30-50% lower TCO for most organizations.
SharePoint Server 2019 mainstream support ended on January 9, 2024. Extended support ends on July 14, 2026. After extended support ends, Microsoft will no longer provide security patches, bug fixes, or technical support. Organizations still running SharePoint 2019 after July 2026 face unpatched security vulnerabilities and compliance audit failures. SharePoint Server Subscription Edition (SE) is available for organizations that need on-premises deployment, but Microsoft strongly recommends migration to SharePoint Online for full feature access and continuous updates.
Yes. SharePoint hybrid architecture connects your on-premises SharePoint farm to SharePoint Online, providing a unified search experience, hybrid OneDrive redirection, hybrid taxonomy, and hybrid Business Connectivity Services. Hybrid is often used as a transitional architecture during migration — allowing users to access both environments through a single entry point while content is gradually moved to the cloud. EPC Group recommends hybrid as a migration accelerator rather than a permanent architecture, since maintaining both environments doubles operational complexity and cost.
Migration timelines depend on data volume, customization complexity, and organizational readiness. For a 500-user organization with 2-5 TB of content, minimal customizations, and no InfoPath forms: 8-12 weeks. For a 2,000-user organization with 10-20 TB, moderate customizations, InfoPath forms, and custom workflows: 16-24 weeks. For a 10,000+ user organization with 50+ TB, heavy customizations, third-party integrations, and compliance requirements: 6-12 months. EPC Group uses a phased migration approach that keeps users productive throughout the transition, with typical migration throughput of 1-2 TB per day using SharePoint Migration Tool (SPMT) or third-party tools like ShareGate or AvePoint.
InfoPath forms and SharePoint 2010/2013 workflows do not migrate directly to SharePoint Online. InfoPath forms must be rebuilt using Power Apps (Microsoft's recommended replacement) or converted to modern forms. SharePoint Designer workflows must be rebuilt in Power Automate (formerly Flow). Custom-coded farm solutions (.wsp) cannot run in SharePoint Online and must be rebuilt as SharePoint Framework (SPFx) solutions or Power Platform apps. EPC Group performs a full customization inventory before migration, identifies replacement paths for every component, and prioritizes rebuilds based on business criticality.
SharePoint Online meets or exceeds the security posture of most on-premises deployments. Microsoft 365 holds SOC 1, SOC 2, SOC 3, ISO 27001, ISO 27018, HIPAA BAA, FedRAMP High (GCC High), and HITRUST certifications. Data is encrypted at rest (BitLocker + per-file encryption) and in transit (TLS 1.2+). Microsoft Purview provides data loss prevention, sensitivity labels, retention policies, and eDiscovery. Conditional Access and Entra ID provide zero-trust access controls that are difficult to replicate on-premises. For most regulated industries — healthcare, financial services, government — SharePoint Online with proper configuration is more secure than an on-premises farm managed by a small IT team.
SharePoint Premium (formerly SharePoint Syntex) is Microsoft's AI-powered document intelligence platform. It provides document understanding models that automatically classify, extract, and tag content using AI. Features include prebuilt models for invoices and contracts, custom document processing models, content assembly (template-based document generation), and eSignature integration. SharePoint Premium is exclusively available in SharePoint Online — there is no on-premises equivalent. Organizations staying on-premises forgo all AI document intelligence capabilities, which represents an increasing competitive disadvantage as AI-driven document processing becomes standard in enterprise operations.
Large-scale migrations require a structured approach: (1) Discovery and assessment using tools like SharePoint Migration Assessment Tool (SMAT) to identify blockers, (2) Content cleanup to reduce migration volume — most organizations have 30-40% redundant, obsolete, or trivial (ROT) content that should not be migrated, (3) Architecture design mapping on-premises site collections to SharePoint Online sites and Microsoft 365 Groups, (4) Pilot migration of 2-3 representative sites to validate the process, (5) Wave-based migration executing 5-10 TB per wave with user acceptance testing, (6) Cutover and decommissioning. EPC Group has migrated environments exceeding 100 TB for Fortune 500 clients using this methodology.
EPC Group offers fixed-fee SharePoint migration assessments. These assessments provide a full migration plan, a total cost of ownership (TCO) analysis, a customization inventory, and a timeline.
This information helps you make a confident decision based on data.
Enterprise SharePoint architecture, migration, and governance services from Microsoft Gold Partner consultants.
Read guideHow leading firms approach enterprise SharePoint migrations — methodology, tools, and success factors.
Read guideDeep dive into SharePoint Premium AI capabilities: document understanding, content assembly, and Copilot agents.
Read guideIn 2026, SharePoint Online is the best option for most organizations. Microsoft focuses solely on SharePoint Online for new features. Key features include:
This guide provides essential information to help you make informed decisions for your organization.
SharePoint Online is the right choice for almost all organizations in 2026.
Very few organizations have legitimate reasons to remain on-premises in 2026. The exceptions are:
On-premises SharePoint consistently costs more over a 5-year period when all costs are included.
| Cost component | SharePoint Online (E3) | SharePoint Server On-Premises | |---|---|---| | Licensing | $36/user/month (~$2.16M over 5 years) | CAL + server license (~$300K upfront) | | Hardware | $0 | $150K–$300K (servers, storage, network) | | SQL Server | $0 (included in Online) | $50K–$150K | | Windows Server | $0 | $30K–$80K | | IT admin overhead | Reduced — Microsoft manages infrastructure | 1–2 FTE dedicated to SharePoint farm | | Disaster recovery | Included | Separate DR environment cost |Note: E3 licensing cost appears higher but includes Exchange, Teams, OneDrive, and Microsoft 365 apps — not just SharePoint. On-premises requires separate infrastructure for each workload.
SharePoint Online's compliance posture has surpassed on-premises for regulated industries.
Large-scale migrations require a structured approach. Follow these six steps for a successful on-premises to Online migration.
Hybrid SharePoint lets organizations run SharePoint Online and SharePoint Server simultaneously during a multi-year transition.
Hybrid is a bridge — not a destination. EPC Group recommends hybrid only as a transitional configuration, not a permanent state.
Yes, this applies to nearly all organizations. Microsoft focuses solely on SharePoint Online. The following features are available only in the Online version:
SharePoint Server does receive security patches, but it will not see new feature investments. The only exceptions are organizations with true on-premises data custody requirements.
Over a 5-year period, on-premises solutions are generally more costly. This includes expenses for hardware, SQL Server, Windows Server, CALs, and IT admin overhead.
In contrast, SharePoint Online (E3 at $36/user/month) offers a bundled solution. It includes:
The on-premises equivalent requires separate infrastructure for each workload.
Yes. Use a structured migration approach: assessment, content rationalization, architecture design, pilot, wave-based migration, and cutover. Use ShareGate or AvePoint Migrator for permission preservation.
Run post-migration validation across 5 dimensions: content integrity, metadata, permissions, functionality, and compliance. EPC Group has completed 6,500+ SharePoint migrations without data loss.
SharePoint 2010 and 2013 workflows are retired and cannot be migrated directly. They must be rebuilt using Power Automate.
Furthermore, InfoPath forms need to be converted to Power Apps.
Plan for 1 to 4 weeks for each workflow rebuild. EPC Group includes a workflow migration assessment in every SharePoint migration engagement.
Talk to a SharePoint architect about your on-premises environment, compliance requirements, and migration timeline. Call (888) 381-9725 or request a free migration decision assessment.
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