SharePoint vs. OneDrive: where should business files live?

OneDrive and SharePoint both store files in Microsoft 365, sync to your computer, and support sharing and version history. The difference is ownership: OneDrive belongs to a person, and SharePoint belongs to a team or the organization. Getting this right avoids a common and painful problem.

OneDrive: your personal work files

Each user's OneDrive is their own workspace for drafts, personal working files, and documents they haven't shared widely yet. It's tied to their account. When an employee leaves and their account is deleted, their OneDrive is retained only for a limited period, 30 days by default, unless an administrator transfers or preserves it.

That's why company records shouldn't live in one person's OneDrive. If a shared spreadsheet or client folder belongs to someone who leaves, access becomes a scramble.

SharePoint: shared team and company files

SharePoint sites hold files that belong to a department, project, or the whole company. Permissions are managed by the site, not by individual sharing links, and the files remain available as people come and go.

Where Teams fits

Files shared in a Teams channel are stored in that team's SharePoint site. Files shared in a one-to-one or group chat are stored in the sender's OneDrive. That distinction surprises many people, and it's another reason important shared documents belong in a channel or SharePoint library rather than a chat.

A simple rule of thumb

• Only I need it, or it's a draft: OneDrive.
• My team needs it, or it's a company record: SharePoint or a Teams channel.
• It's a client or project folder: a SharePoint library or site for that client or project.

Setting it up well

Create a small number of SharePoint sites organized around how your business works, such as departments, clients, or projects, and give access through groups rather than individual links. Sync only the libraries people need on their computers. Then set a clear expectation that shared work moves out of OneDrive once it's ready for others.

When an employee leaves, review their OneDrive before the account is removed, and move anything the business needs into SharePoint.

Zach Albano

Founder of Albano Tech, providing managed IT, Microsoft 365, and cybersecurity services to businesses in Delaware, Maryland, and the Philadelphia region. More about Zach.