What is SharePoint and do I need it?

SharePoint is the shared file system built into Microsoft 365 where your whole business stores its documents in one secure, searchable place. Think of it as the digital filing room the entire team shares, with permissions, version history and access from anywhere. If you already pay for Microsoft 365, you already have it, and most small businesses should be using it.

SharePoint has a reputation for being complicated, and used badly it can be. Used well, it is simply the place your business files live so they are safe, findable and not trapped on one person's laptop. Here is the plain version.

What does SharePoint actually do?

SharePoint stores your shared business files in the cloud and controls who can see and edit them. Where OneDrive is your personal storage, SharePoint is the shared drive for teams, departments or the whole company.

In practice it gives you:

• Shared document libraries organised by team, client or project.
• Permissions so finance files stay with finance and everyone else sees only what they should.
• Version history, so you can roll back a document someone overwrote.
• Access from anywhere, on any device, with the file always in one place rather than emailed around.
• Powerful search across everything, so nobody wastes twenty minutes hunting for a contract.

It is also the engine underneath Teams. When you share a file in a Teams channel, it is stored in SharePoint behind the scenes. Microsoft explains the structure on learn.microsoft.com.

Tip: If your team already uses Teams, you are already using SharePoint, so tidying your Teams channels tidies the underlying file store at the same time.

How is SharePoint different from OneDrive?

OneDrive is for your own work; SharePoint is for shared work. A file only you touch belongs in OneDrive, while a file the team needs belongs in SharePoint.

The simplest test: if you left tomorrow, would someone else need this file? If yes, it should be in SharePoint, not stuck in your personal OneDrive where it disappears when your account is closed. We map all of this out in OneDrive vs SharePoint vs Teams.

Do you actually need SharePoint?

You need SharePoint if more than one person needs access to the same files, which is nearly every business with staff. A true sole operator with no team can live in OneDrive alone, but the moment you hire, shared storage stops being optional.

The honest exception: if you are one person with no plans to add staff, do not overbuild. OneDrive will do the job, and you can move to SharePoint later. We would rather tell you that than sell you complexity you do not need. For everyone with a team, the question is not whether to use it but how to set it up so it stays tidy.

Best practice: Set SharePoint up before you hire your second person, because moving files across while a team is already working in them is far more disruptive.

What goes wrong with SharePoint?

SharePoint goes wrong when it is set up as one giant dumping ground with no structure, so it becomes as messy as the shared drive it replaced. A good setup is planned around how your business actually works.

The fixes are simple: create separate sites or libraries per team or function, set permissions once and clearly, and agree a basic folder structure everyone follows. Done at the start, it stays clean for years. Retrofitted after two years of chaos, it is a project. This is part of every setup in our Microsoft 365 service, including on-site work like Microsoft 365 support in Penrith.

Warning: Giving everyone access to everything by default is the fastest way to expose finance or HR files to staff who were never meant to see them.

The short version

SharePoint is the shared filing system inside Microsoft 365, and if you have staff, you should be using it instead of a local server or a messy shared drive. Set it up with a clear structure and permissions from the start and it keeps your business files safe, findable and off individual laptops. For the full picture, see the Microsoft 365 small business guide.

Frequently asked questions

Is SharePoint included in Microsoft 365?

Yes, SharePoint is included in every Microsoft 365 Business plan at no extra cost. If you pay for Business Basic, Standard or Premium, you already have it and can start using it today.

What is the difference between SharePoint and Teams?

Teams is the app you chat and meet in; SharePoint is where the files you share in Teams are actually stored. Teams is the front door, SharePoint is the filing room behind it.

Do I need SharePoint if I use OneDrive?

If you have staff, yes. OneDrive holds your personal files, but shared business files belong in SharePoint so the whole team can reach them and they do not vanish when someone leaves.

Can SharePoint replace my old file server?

Yes, for most small businesses SharePoint fully replaces an on-site file server, with the advantage of secure access from anywhere. Moving across should be planned so permissions and structure carry over cleanly.

Is SharePoint secure?

SharePoint is secure when permissions are set correctly and multi-factor authentication is enforced on your accounts. The tools are strong, but like the rest of Microsoft 365 they need to be configured rather than left on defaults.

Wondering whether your files are set up the right way? Take the free business health check and we will take a look.