OneDrive is for files that belong to one person: drafts, sensitive documents and work you want to control access to. SharePoint is for files that belong to the business: shared folders, team sites and anything that has to stay put when someone leaves. Most small teams use both, and the easy rule is to start a file in OneDrive and move it to SharePoint the moment other people depend on it.
People often treat these as two rival products, but they're two halves of the same Microsoft 365 storage system. The real question isn't which one to pick. It's which one each file belongs in, and getting that wrong is how a business loses work when a team member moves on. I read Microsoft's SharePoint and OneDrive pages, its small business support guide and two Microsoft Learn pages on limits and deletion.
SharePoint and OneDrive side by side
| SharePoint | OneDrive | |
|---|---|---|
| Who owns the files | The team or the whole business | One named person |
| Typical use | Team sites, shared libraries, intranet news | Personal work files, drafts, private documents |
| Free option | Not stated: part of Microsoft 365 business plans | Yes, a free personal account |
| Storage rule | 1 TB per organisation plus 10 GB for each licence, up to 25 TB per site | Not covered on the pages I read |
| When someone leaves | Files stay with the site | Marked for deletion, kept 30 days by default |
| AI features | Copilot in SharePoint and a SharePoint Admin Agent | Copilot can summarise and compare files |
The 30-day rule most small businesses miss
This is the part that catches people out. Microsoft Learn explains that when a user account is deleted, their OneDrive is marked for deletion, and the default retention period is 30 days. By default the person's manager is given access and has those 30 days to download anything they want to keep. After that, the files go, unless an admin has changed the retention setting in the SharePoint admin center.
So if your proposals, client folders or templates live in one person's OneDrive, they're on a timer the day that person leaves. Files in a SharePoint site don't have that problem, because the site belongs to the organisation rather than to one account. Microsoft also notes that unlicensed OneDrive accounts are archived on their 93rd unlicensed day, which matters if you remove licences to tidy up.
What OneDrive does well
Microsoft's own small business guide puts it plainly: OneDrive is a good place to store work files or sensitive business files that you want to control access to. It backs up your important desktop files, keeps them available offline with Files On-Demand, and syncs changes across all your devices. For a freelancer or a one-person business, OneDrive on its own is often all you need.
What SharePoint does well
SharePoint is built for shared work. You get team sites, shared document libraries, a branded hub for company news and resources that everyone on the team can use. Microsoft now describes it as the knowledge platform for Copilot and agents, which means the files you keep there are also what Copilot draws on when your team asks it questions. Microsoft recommends syncing no more than 300,000 files in a single library, so very large archives are better split across sites.
A filing rule your team can follow
- If only you need it, save it to OneDrive.
- The moment a second person relies on it, move it to the right SharePoint site.
- Anything a client, an accountant or a new hire might need later belongs in SharePoint.
- Before removing a user, check their OneDrive for business files and move them across.
If you're weighing up storage more widely, my piece on using cloud storage to work more productively covers the habits that keep shared folders tidy, and if part of your team is on Google, here's how to transfer file ownership in Google Drive before someone leaves.
My advice on SharePoint or OneDrive
Don't choose one. Use OneDrive as each person's desk and SharePoint as the shared filing cabinet. The one thing I'd do today is look at who holds your most important files, because if the answer is a single person's OneDrive, you're one resignation away from a 30-day scramble.
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Frequently asked questions
Is SharePoint the same as OneDrive?
No. They're part of the same Microsoft 365 system, but OneDrive holds one person's files and SharePoint holds files that belong to a team or the business.
What happens to OneDrive files when an employee leaves?
Microsoft Learn says the OneDrive is marked for deletion when the account is deleted, with a default retention period of 30 days, and the manager gets access to download files in that time.
How much storage does SharePoint have?
Microsoft lists 1 TB per organisation plus 10 GB for each licence, with up to 25 TB per site.
Is there a free version of OneDrive?
Yes. Microsoft offers a free personal OneDrive account. SharePoint comes with Microsoft 365 business plans.
Should a small business use SharePoint?
If more than one person works on the same files, yes. It keeps shared files with the business rather than with one person's account.
