Documents in SharePoint: what you get out of the box and how it differs from a file server

Part 1 of the four-part series Documents in SharePoint. For organisations that keep their documents on a file server and are weighing up whether and how to move them. No sales pitch: what SharePoint can do, what it can’t, and what it would cost you.

On a recent call, a customer said something I hear often: “The server works, people know it, why would we change it?” And on the main point, they’re right. An established way of working has value, and changing it is the most expensive part of any project. Anyone who tells you otherwise is selling something.

But the same company is paying for SharePoint — it’s part of the standard Microsoft 365 business plans — and doesn’t use most of what it offers. Before you decide whether it makes sense to change anything, it’s worth knowing exactly what you have at your disposal. That’s what this part is about: what SharePoint does with documents straight after you switch it on, without buying anything else, and where it is, honestly, weaker or more demanding than a server.

A few terms first

SharePoint uses different words from a file server, and until you translate them, everything sounds more complicated than it is.

• Site — a separate space for a team or an area of work, with its own permissions. The closest thing to a shared drive.
• Library — the place for documents inside a site. Like a top-level folder on a drive, but with versions and properties.
• Metadata — document properties, such as customer, type or valid until. You sort and filter by them instead of digging through deep folders.
• OneDrive — each employee’s personal storage, and also the app that shows SharePoint libraries in File Explorer.

File server vs. SharePoint in everyday work

For the server, I describe the typical situation. Your particular setup may be better — shadow copies, indexing turned on, well-maintained permissions. The table is about what you get without extra work.

Area	File server	SharePoint Online
Document versions	Only the latest state is saved. An older version only from shadow copies or a backup, usually restored by IT.	Changes are saved as versions; by default up to 500 versions are kept. Anyone with edit permission can open or restore an older version.
Accidentally deleted file	Files deleted from a network drive don’t go to a recycle bin. Restore from backup through IT.	The file goes to the site recycle bin, where the user restores it themselves. It is kept for 93 days in total.
Damage at scale	Folders restored from backup — depending on how old the backup is and how fast it restores.	The site owner rolls the whole library back to any moment in the last 30 days.
Search	Mainly by name and path; inside content only with indexing turned on.	Full-text search in content and properties, with results limited by permissions.
Who did what with a document	Auditing can be turned on in Windows; the result is a technical server log.	The Microsoft 365 audit log, with search and export. On from the start in enterprise plans; in Business plans you just need to turn it on once.
Permissions	Folder permissions (NTFS). With dozens of folders with different permissions, it’s hard to keep track of who can see what.	Permissions mainly on whole sites and libraries, through groups. Fewer exceptions, and a saved document inherits the permissions of the place it belongs to.
Sharing with external people	Typically an email attachment — creating a copy outside your control.	A link for specific people, who have to verify their identity. Guest access can expire automatically.
Collaboration	”The file is open by another user.”	Several people edit the same document at the same time.
Working away from the office	VPN or remote desktop.	Browser, Office or mobile, with the same sign-in as the rest of Microsoft 365.
Working in File Explorer	Yes — that’s what people are used to.	Also yes, through the OneDrive app: the library shows up as a folder, and files download only when you open them.
Approved vs. draft version	Handled through the file name (“_v3_final_FINAL”) or a separate folder.	Major and minor versions with approval: readers see the approved text, authors see drafts too.
How long to keep a document	Manually, based on the internal policy and people’s memory.	Retention labels: a document is kept for the prescribed period even if someone deletes it, and can then be removed automatically (Business Premium, E3 and higher).
Maintenance	Hardware, disks, backups, capacity.	Microsoft runs the service; the organisation gets storage based on the number of licences. You take care of structure and permissions.

What SharePoint does without buying anything

Version history

Changes are saved as new versions — continuously with AutoSave in Office — and you can see who saved them and when. You can open or restore an older version. Instead of files like quote_v2_fixed_FINAL.docx, there is one document, and its history includes the text that actually went to the client. By default, Microsoft keeps up to 500 major versions; an administrator can set a different limit, or the automatic mode that Microsoft recommends to save space. How much space versions really take up, we measured in a separate article.

Restore without IT

A deleted file goes to the site recycle bin. First to the recycle bin the user can see, and once that is emptied, to a second recycle bin that the site administrator restores from — 93 days in total. For worse situations, such as ransomware or mass overwriting, a library has the Restore this library feature, which the site owner runs: it takes the library back to how it was at any moment in the last 30 days. No hunting for a backup and no waiting for IT.

Properties instead of a folder pyramid

A document can carry properties — type, customer, project, valid until. You can then find one document from several directions without it sitting in three folders. Contracts can be filtered both by partner and by expiry date, and nobody has to maintain two different folder trees. Folders still exist in SharePoint, and using them isn’t a mistake; they just stop being the only way to sort things.

Company templates and required fields

For a document type, you can set a default template and required properties. A new policy then starts out with the right header, and when saving, Office prompts the author to fill in the owner and the review date.

Search inside content

Search also looks inside the text of documents (Word, Excel, PDF and more), not just at names. “Where did we write about that warranty condition?” — type the phrase and the document turns up, even if its name is completely different. An important detail: results are always limited to what that person is allowed to see. Search will never show anyone a document they don’t have access to.

Audit trail

Opening, downloading, editing, sharing and deleting are all written to the Microsoft 365 audit log (Microsoft Purview Audit). In the basic tier, records are kept for 180 days; with an E5 licence, SharePoint and OneDrive records are kept for a year. The log can be exported to CSV — when an auditor asks who opened or downloaded the security policy in the last quarter, the answer is an export, not a guess.

One thing worth checking straight away: in enterprise plans (E3, E5) auditing is on from the start, but in the Business Basic, Standard and Premium plans Microsoft doesn’t turn it on by default. An administrator has to turn it on once in the Microsoft Purview portal. Until that happens, nothing is recorded — and you can’t look it up after the fact.

Safe external sharing

Instead of an attachment, you send a link for specific people, who have to verify their identity. Sharing can be revoked at any time, and for guests you can set access to expire on its own after a certain period. An external supplier gets the materials for the duration of the job, and when the job ends, so does their access, without anyone having to remember.

Working as before

People don’t have to change everything at once. All they need is the OneDrive app, which comes preinstalled on Windows 10 and 11: in the library in the browser, they click Add shortcut to My files, and the library (or just a selected folder) appears in File Explorer, in the OneDrive folder. They work with it like a folder on a drive — opening, saving, moving. Files download only when they open them, so the whole company’s paperwork doesn’t fill up the laptop’s disk. Documents still open in desktop Word and Excel.

The other way is the Sync button in the library; Microsoft, however, recommends shortcuts, because only the selected folder is synced and a shortcut works on every device where the person is signed in. One thing worth knowing in advance: unlike a network drive, a library has no drive letter (like S:); it sits in the user’s profile under OneDrive.

Where it takes more

So that this isn’t an advert, here is what SharePoint won’t do for you, or what takes more effort than a server.

• Someone has to design the structure. What document types you have, who owns them, who may access them. It’s a one-off job, but it is a job. The reward is that permissions aren’t set when saving — a document inherits them from where it is stored.
• People’s habits are a real cost. This is what gets underestimated most often. What helps is going team by team, short training and simple rules on “what goes where”.
• SharePoint is big. It can do hundreds of things, and for an ordinary user that is sometimes too much. Turn on only what you really need.
• Some features depend on the licence. Versions, recycle bin, library restore, search and basic audit are in all the standard business plans. Retention labels, which make sure a document is kept as long as it must be, need Business Premium or E3 for manual labelling; automatic labelling and a default label for a whole library only come with E5. Longer audit retention also needs E5.
• It has limits. The full path to a file can be at most 400 characters. Syncing to Windows is recommended for at most 300,000 files in a library. The number of files isn’t the limit — a library can hold up to 30 million items. Storage, however, is limited: the organisation gets 1 TB plus 10 GB per licence, and additional space is bought on top. What this means for a migration is coming up in the next part.
• Teams isn’t a requirement. Documents in SharePoint work on their own. If the company communicates elsewhere, nothing has to change.

And about AI

The last argument isn’t about features but about where work tools are heading. An AI assistant can only work with what it can see. When documents are on a server, everyone has to paste them into the chat by hand. When they are in Microsoft 365 with the right permissions, AI tools built on Microsoft 365 can use them directly — and show each person only what they have access to. Well-organised documents with the right permissions are therefore a prerequisite, not an add-on. Which AI tool you choose is a separate decision; we wrote about preparing content for AI in SharePoint Online and AI readiness.

Key takeaways

1. The biggest cost isn’t the licence but changing habits. Most companies already pay for SharePoint; budget time for designing the structure and for the people.
2. Versions, restore and audit are included from the start. What you handle with backups and IT on a server, a user or site owner does themselves in SharePoint.
3. You don’t have to change everything at once. File Explorer stays, and you can move over in stages — that’s what the next part is about.

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At EP365 we help organisations decide whether and how to move their documents to SharePoint — from reviewing the current state, through designing structure and permissions, to training. We most often handle it as a Restart or a governance design. If you’re not sure whether it makes sense for you, drop us a line.

In the next part: how to move from a file server step by step, without a big bang — where to start, what doesn’t carry over in a migration, and which limits to watch out for before the very first file.