OneDrive vs SharePoint vs Teams: where files should live

The simple rule: personal work lives in OneDrive, shared business files live in SharePoint, and Teams is just the window you open those shared files through. OneDrive is your own desk, SharePoint is the filing room the whole business shares, and Teams is the doorway with the chat attached. Get this right and files stop getting lost, duplicated or trapped on one laptop.

These three tools all come with Microsoft 365 and all store files, which is exactly why people get confused and end up with the same document in three places. Here is the clear version so your team always knows where things go.

Tip: The quickest way to end duplicate files is one shared rule everyone follows, because the confusion is a habit problem more than a software one.

Where should files actually live?

Files should live in OneDrive if they are yours alone, and SharePoint if the team needs them, with Teams used as the way you access the shared ones. The mistake is treating all three as separate storage, when really only two of them store files and the third is a front door.

What is OneDrive for?

OneDrive is for files that belong to you and only you. It is your personal, private storage inside Microsoft 365, with 1TB of space, synced across your devices.

Good uses: draft documents before they are shared, your own working notes, and anything personal to your role. The key limit is that when someone leaves and their account is closed, their OneDrive goes with it, so nothing the business needs long term should live there alone. That is what SharePoint is for.

What is SharePoint for?

SharePoint is for files the business shares, and it is where the vast majority of your important documents should live. It is the shared filing room, with permissions so the right people see the right things, and it stays put no matter who comes or goes.

Good uses: client folders, contracts, policies, templates, project files, anything more than one person touches. Because it survives staff changes and has proper permissions and version history, it is the safe home for the business's real assets. We go deeper in what is SharePoint and do I need it.

Best practice: Keep the business's real assets, contracts, client folders and templates, in SharePoint so they survive staff changes and carry proper permissions, rather than stranded on one person's OneDrive.

So what is Teams for?

Teams is where you chat, meet and work together, and when it comes to files it simply shows you the ones already stored in SharePoint. It does not store files separately, even though it looks like it does.

Note: Teams stores nothing of its own, so a file shared in a channel lives in that team's SharePoint site, which is why it is a window rather than a fourth place to lose work.

This is the single biggest source of confusion. When you drop a file into a Teams channel, it is saved in that team's SharePoint site behind the scenes. So Teams is not a fourth place to lose things; it is a convenient window into SharePoint with a conversation running alongside. Microsoft explains the relationship on learn.microsoft.com.

How do you set this up so it stays tidy?

Set it up by agreeing one rule with your team: if anyone else might need it, it goes in SharePoint (through Teams), and if it is only yours, it goes in OneDrive. Decide this once and repeat it until it sticks.

• Create a Team per department, client type or project, each with its own SharePoint storage behind it.
• Set permissions once so sensitive files stay with the right people.
• Train the team on the one rule above - it is simple enough that it actually gets followed.
• Keep personal drafts in OneDrive and move them to SharePoint the moment they are shared.

Done at setup this stays clean for years. This is part of every build in our Microsoft 365 service, and it fits inside the wider Microsoft 365 small business guide. We also do this on-site, including Microsoft 365 support in Parramatta.

The short version

OneDrive is yours, SharePoint is the team's, and Teams is the doorway to SharePoint, not a separate place. Teach your team that one rule and you will stop losing files, stop duplicating them, and stop losing important documents when someone leaves.

Frequently asked questions

What is the difference between OneDrive and SharePoint?

OneDrive is your personal storage for files only you use, while SharePoint is shared storage for files the whole team needs. Personal drafts go in OneDrive; shared client and business files go in SharePoint.

Does Teams store files separately?

No. Teams does not have its own storage; any file you share in a Teams channel is actually saved in that team's SharePoint site behind the scenes. Teams is a window into SharePoint, not a separate location.

Where should client files be stored?

Client files should be stored in SharePoint, not personal OneDrive, so the whole relevant team can access them and they remain safe when a staff member leaves. Set permissions so only the right people can open them.

What happens to OneDrive files when someone leaves?

When a staff member's account is closed, their OneDrive is scheduled for deletion, so anything stored only there can be lost. This is why business-critical files belong in SharePoint, which is unaffected by staff changes.

Can I move files from OneDrive to SharePoint?

Yes, you can move files from OneDrive to SharePoint at any time, and it is good practice to do so once a file becomes shared. Moving them keeps the team's important documents in the right, permanent place.

Files scattered across three places and nobody sure where anything is? Take the free business health check and we will help you sort it out.