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In the past, there have been some major differences between SharePoint Online and SharePoint On-Premises. For one, SharePoint Online used to trail the version of SharePoint that was available on-premises. For example, when SharePoint 2016 came out, it took SharePoint Online a painfully long time before it became comparable to SharePoint 2016.

The current on-premises version is SharePoint 2019. The previous version was SharePoint 2016, and the version before that was SharePoint 2013. SharePoint Online doesn’t have a version number.

Times have changed, however. Microsoft has moved to focus on SharePoint Online instead of the on-premises versions. It rolls out new features in SharePoint Online, and then grabs a snapshot of the online version and makes it available for organizations that choose to deploy it themselves on-premises.

You can think of SharePoint Server 2019 as a snapshot of the features available in SharePoint Online around the year 2019. One thing is certain, though: If you want the latest and greatest features, SharePoint Online is your best bet.

In fact, one of the major development areas with SharePoint Server 2019 is its integration with SharePoint Online. This is to accommodate organizations that want to keep some of their data on their local premises and in their own control, but want to leverage some of the benefits of having Microsoft manage SharePoint for them. This concept of using some SharePoint Online and some SharePoint On-Premises is called a hybrid approach.

With that said, there are still integration points with other local server products and advanced functionality that are only available with SharePoint On-Premises. This is an ever-changing landscape, so the best way to stay on top of the available features is on the frequently updated SharePoint Online feature matrix located on Microsoft’s docs.microsoft.com site. The best way to find the features is to search for “SharePoint service description.”

SharePoint Online is when Microsoft manages SharePoint in its data centers and you access it over the Internet. SharePoint On-Premises is when your local IT gurus manage SharePoint in your company data center.