Understand and evaluate hosting options for SharePoint farms

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Applies to: Microsoft Azure, Office 365 Enterprise, SharePoint Server 2013 Enterprise, SharePoint Server 2013 Standard, Windows Server 2008 SP 2, Windows Server 2012

Topic Last Modified: 2016-12-16

Summary: Learn about the options for hosting a SharePoint farm and the recommended criteria to evaluate and select a suitable option for your organization.

As you determine how to host a SharePoint farm, the choices that you make can affect the functionality of the farm. For example, the hosting option that you choose might impact support for SharePoint features, scalability, licensing, and cost. The following information helps you choose an option that is appropriate for your organization’s immediate and long range SharePoint strategy.

In this article:

You can use several hosting environments to deploy and operate a SharePoint farm. These options range from the traditional farm deployment that runs on physical computers that you maintain to third-party hosted environments and cloud-based services. Each hosting environment enables you to deliver core SharePoint farm features and services. However, differences might cause you to prefer a specific environment.

Cloud computing is an option to host a SharePoint farm. You could use a public or private cloud. You should understand the concept of cloud computing as you entertain hosting options. A heavily virtualized IT environment is not necessarily a cloud platform.

The NIST-SP 500-291, NIST Cloud Computing Standards Roadmap publication from the National Institute of Standards and Technology (NIST) defines cloud computing:

"The NIST Definition of Cloud Computing identified cloud computing as a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (for example, networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction."

The essential characteristics of cloud computing can be summarized as follows:

  • There is on-demand, self-service for users.

  • There is broad network access.

  • There is a shared resource pool for users.

  • There is an ability to elastically scale resources in response to user demand.

  • There is the ability to measure the services, such as network bandwidth and storage that is used by users.

The NIST-SP 500-291, NIST Cloud Computing Standards Roadmap publication also identifies service models and deployment models for the cloud.

The service models are as follows:

  • Cloud Software as a Service (SaaS)

  • Cloud Platform as a Service (PaaS)

  • Cloud Infrastructure as a Service (IaaS)

The deployment models for cloud services are as follows:

  • Private cloud

  • Community cloud

  • Public cloud

  • Hybrid cloud

For more information, see The NIST Definition of Cloud Computing (SP 800-145).

Microsoft offers and licenses two categories of SharePoint farm solutions. The solution in the cloud is SharePoint Online, and the on-premises solution is SharePoint 2013.

  • SharePoint Online is a product that Microsoft provides as Software as a Service (SaaS). Users subscribe to the SharePoint service and Microsoft hosts these SharePoint solutions in its data centers.

  • SharePoint 2013 follows the traditional software licensing and installation model. Customers install and configure an on-premises solution on servers that the customer owns and maintains, or on servers that another organization’s data center hosts.

The SharePoint hybrid scenario, also described in this article, is not a farm solution in the same sense as the SharePoint Online or SharePoint 2013. That is to say, Microsoft does not offer and license a SharePoint hybrid environment as a solution. The SharePoint hybrid environment is actually a combination of the on-line and on-premises SharePoint solutions.

Compare SharePoint Options contains a summary of the SharePoint features in each solution, licensing information, and subscription information.

There are two subscription plans available for SharePoint Online.

  • SharePoint Online stand-alone plan

  • SharePoint Online Office 365 plan

SharePoint Online is a Software as a Service (SaaS) offering that is available as a stand-alone service.

The following resources provide information about SharePoint Online features, subscriptions, and service level agreements.

All Office 365 plans include the SharePoint Online service, but some plans do not support all SharePoint features. SharePoint feature availability across Office 365 plans identifies the SharePoint Online features that are available in Office 365 and the SharePoint 2013 features that are available in each plan.

The following resources provide information about Office 365 features, subscriptions, and service level agreements.

Customers install and configure SharePoint 2013 on-premises solutions on servers that the customer owns and maintains, or on a hosted infrastructure that another organization provides.

SharePoint 2013 is available and licensed as one of the following on-premises solutions:

  • SharePoint Foundation 2013

  • SharePoint Server 2013 Standard CAL

  • SharePoint Server 2013 Enterprise CAL

The scope of available SharePoint features varies among the previous solutions. SharePoint feature availability across on-premises solutions identifies whether a feature is available in a solution.

You can deploy SharePoint 2013 solutions on physical and virtual infrastructures, which include the following environments:

  • On-premises, physical or virtual

  • Private cloud (in-house)

  • Private cloud (hosted)

  • Public cloud

SharePoint 2013 is deployed and hosted on the infrastructure and platform that a customer’s data center provides and maintains. Although the infrastructure can be completely physical, many data centers use a combination of physical hardware and virtualization technologies to host a SharePoint farm.

You can deploy a SharePoint 2013 farm on Windows Server 2008 Hyper-V technology or other server virtualization technologies that are certified by the Windows Server Virtualization Validation Program (SVVP).

SharePoint 2013 is deployed and hosted in a private cloud that a customer’s data center provides and maintains. A private cloud combines resources, such as servers, storage, and networking, in a data center that you manage. The infrastructure that you create enables you to abstract resources into units so that you can provide applications and resources efficiently. Customers of a private cloud can request services, and you can scale the resources as the demand of the infrastructure changes.

The software that is the foundation for a Microsoft private cloud is Windows Server 2012 and System Center 2012. For more information, see Microsoft Private Cloud and Private Cloud Fast Track.

In this scenario the SharePoint 2013 farm is deployed and operated on a private cloud that a service provider’s data center hosts. While this solution delivers the same benefits as private and public cloud computing, it eliminates the infrastructure, operations, and maintenance costs. Like the private cloud scenario, Windows Server 2012 and System Center 2012 are foundation products. For more about cloud service providers, see Service Providers.

Azure Services for Windows Server provides a user experience that resembles what users have when they work with virtual machines and websites on the Azure platform. The Service Management Portal and Service Management API makes this front end for a private cloud possible. Azure Services for Windows is available to service providers and customers who want to implement and management a Windows private cloud. For more information, see Service Management Portal and Service Management API. Download the Service Management Portal and Service Management API Express bits to install the Admin and Tenant portals and the Service Management API on one computer.

Public cloud offerings, such as Azure, provide the infrastructure and platform services to host a SharePoint 2013 farm. The key difference between public and private clouds is that public clouds typically use a multi-tenant model, which means the host resources are shared among subscribers and not dedicated to a single customer. For more information, see the following articles:

An organization can create a hybrid SharePoint environment that consists of a SharePoint Server 2013 on-premises farm and a subscription to a SharePoint Online service. There are several reasons why an organization may choose this approach. SharePoint customers identify the following reasons as the most common for adopting a hybrid solution:

  • The size of an organization does not make it practical to implement cloud computing exclusively, at least not in the short term. The geographical distribution of an organization also affects the level of adoption for cloud computing.

  • Regulatory compliance and governance requirements determine where an organization’s content must be stored. This prevents an organization from storing content in the cloud that is hosted in a remote location.

  • Relationships with business partners and vendors may require on-premise farms to maintain these relationships.

  • The nature of the business requires a higher service level than a cloud service can provide.

  • The organization must protect its current investment in IT and maximize the return on investment.

  • Strategic planning and budgeting cycles affect cloud adoption, especially if a large scale migration is required.

  • The hybrid scenario provides a transitional environment from an on-premises deployment to the cloud.

  • A hybrid environment enables you to use preferred features from SharePoint 2013 on-premises and SharePoint Online.

To learn more the hybrid scenario, see Hybrid for SharePoint Server 2013.

Choosing a suitable SharePoint farm hosting option to meet your organization’s business goals and objectives is a complex process. Although common elements apply to any organization that is evaluating hosting options, no generic, all-encompassing formula applies to every organization. There are several reasons for this, such as the following:

  • Organizations have unique characteristics and requirements. Organizations in the same line of business differ because of size, geopolitical factors, and so on.

  • The level of technical maturity and scope determines what is or can be handled in-house.

To evaluate these options, you have to define relevant criteria that you can apply to all the options. After you establish these criteria, you have to determine their relative importance and develop a way to evaluate each option. This process may seem to be fairly simple, which is true when you are dealing with quantifiable criteria such as farm uptime (number of nine’s) and cost per seat for a subscription. However, there are always intangibles to consider, such as improved productivity and processes.

The financial aspect, which includes cost, cost savings and return on investment (ROI) is usually the first criterion in any discussion about hosting technologies. Cost benefits, which are explained later in this section, should not be the only consideration when you select a hosting option.

You should consider many other intangible and difficult to quantify factors when you evaluate hosting options. The following examples apply, in varying degrees, to most organizations and can be used to generate quantifiable evaluation criteria.

  • The role and importance of SharePoint in supporting the current and future business strategy.

  • How the various hosting options fit in the current and future IT strategy.

  • General business, technology and operations requirements.

  • How to measure the actual benefits against the projected benefits.

  • The projected effect that a specific option will have on business processes and staff.

The following table categorizes the items that organizations typically use to identify evaluation criteria. Although there are variations and differences in levels of detail, these categories apply to most IT environments.


Category Item Description

Physical data center

  • Servers and peripherals

  • Network infrastructure including switches and routers

  • Racks and cabling

  • Uninterruptible power supply (UPS)

  • Benches

The physical hardware that consists of the infrastructure to host applications.

Facilities power and environment

  • Power lines and junction boxes

  • Telecommunications lines

  • Air conditioning and fire suppression

  • Facilities maintenance

Facilities requirements to support the data center hardware. There is also a cost associated with maintaining facilities.

Software and applications

  • Licenses

  • Maintenance agreements

Product licensing may include product support. Understand your licenses. Also consider licensing, maintenance, and support for third-party applications.

Hardware, software, and application maintenance

  • New hardware, upgrades, replacement, and recycling.

  • Software updates, patches, and upgrades for SharePoint farm and applications.

New or upgraded hardware that is required to scale out or scale up. Hardware replacement is an alternative to repairs or maintenance of obsolete equipment.

Updates, patches, and upgrades include the operating system, SharePoint software, prerequisite software, and in some cases, application software.

Support and personnel

  • Server infrastructure management and operations.

  • Network infrastructure (LAN and WAN) management and operations.

  • SharePoint farm management and operations.

Support processes, tools, and staff to manage, operate, and maintain the servers. This includes monitoring (performance, capacity and alerts), reporting, troubleshooting, and problem resolution or problem repair.

Support processes, tools, and staff to manage, operate, and maintain the networks. This includes monitoring (performance, capacity and alerts), reporting, troubleshooting, and problem resolution or problem repair.

Support processes, tools, and staff to manage, operate, and maintain the SharePoint farm. This includes monitoring (performance, capacity and alerts), reporting, troubleshooting, and problem resolution or problem repair.

Compliance and governance

  • Data storage location and retention.

  • Off-site backup storage.

  • Security and auditing.

Processes, tools, and staff to make sure that regulatory compliance and governance requirements are monitored, audited, and maintained.

Backup processes and storage requirements for the infrastructure and the SharePoint farm.

Security and auditing requirements for the infrastructure and the farm.

Business continuity and high availability

  • Service levels and Service Level Agreements (SLA).

    • Number of 9s

    • Recovery time objective (RTO)

    • Recovery point objective (RPO)

  • Redundancy to support high availability.

  • Disaster recovery plan

  • Disaster recovery farm

SLA requirements (number of 9s, RTO, and RPO), including ownership and associated costs and penalties.

Redundancy requirements and strategy for the infrastructure and the farm.

Create, maintain, and test a disaster recovery plan.

A recovery strategy and options to recover the farm at another location.

Conversion and migration

  • Content

  • Customizations and applications

  • Accounts

  • Farm settings

For existing SharePoint environments: content migration requirements, and if supported, conversion or migration of customizations and applications. Migration of user accounts and farm settings.

For a new SharePoint farm: possible content conversion and migration to a SharePoint environment, migration or addition of user accounts to farm.


  • Solutions

  • Workloads

  • Capacity, performance, and access

  • Scalability

  • Integration

The SharePoint solution on the host can meet the following requirements.

  • Supports the desired features and meets functional requirements.

  • Supports specific workloads identified for the farm.

  • Is able to provide the capacity and meet user performance expectations. Additionally the farm meets access requirements (for example, remote access, support for mobile devices, and business working hours).

  • The farm can scale up or scale out appropriately in response to changes in volume or growth.

  • The farm environment can be integrated with existing products and solutions.

In addition to providing a way to evaluate hosting options, your criteria also give you a way to determine the potential business value that they can provide.

Available processes and tools enable you to calculate total cost of ownership (TCO) and return on investment (ROI) for investments in computer technology. Typically, TCO and ROI are tangible and easy to calculate when you are dealing with the hardware, software, and other aspects of IT in an organization. However, the service-based cloud computing model introduces intangible benefits that make it difficult to measure ROI.

The traditional ROI model works well for IT purchases that you treat as a capital expense. Initial costs, such as asset purchases, are combined with recurring costs, such as maintenance, to produce qualitative metrics to justify expenditures. These metrics include costs savings, productivity gains, time savings, and others.

Business and IT experts frequently identify the following benefits or business value that cloud computing provides.

  • Rate of adoption

    An organization can set up and use cloud services almost immediately You don't have to obtain, install, and configure an infrastructure to support a SharePoint farm.

  • Flexibility and speed of change

    Reduced cost enables an organization to adapt quickly to changing market trends and remain competitive.

  • Reduced TCO

    Cloud computing reduces in-house technical skill requirements, maintenance costs, and implementation costs.

  • Rapid resource adjustment

    The cloud platform supports dynamic and rapid adjustment of resources in response to an organization’s needs. For example, you can scale in response to growth or reduction.

  • IT cost control

    The cloud enables an organization to effectively manage IT costs by reducing the risk of over or under provisioning IT technology and services.

  • Process improvement

    An organization can focus on how to improve processes in response to market changes instead of how to manage solutions and applications.

The following articles help you understand how to measure cloud ROI and business value.

TCO and ROI resources

Many resources and tools help you model and analyze investments in information technology. The following organizations are well-known and experienced in this area.

  • Alinean; ROI and TCO tools (http://www.alinean.com )

  • Glomark – Governan; Enterprise Value Creation (EVC™ ) (http://www.glomark-governan.com )

  • McKinsey; Valuation: Measuring and Managing the Value of Companies (http://www.mckinsey.com )

  • IDC; The Hidden Costs of Information Work (http://www.idc.com)

  • Forrester; Total Economic Impact (TEI) (http://www.forrester.com/TEI )

  • Gartner; Guidance Framework for Creating a Defensible Business Case (http://www.gartner.com )

  • Cranfield School of Management; Managing the Realization of Business Benefits From IT Investments (http://www.som.cranfield.ac.uk/)

Decision tree analysis is a common method to evaluate the value of different decisions. This method provides a visual and analytical decision support tool that calculates the expected values of alternatives. This technique allows for the assignment of values to various decision paths. The result is a final “expected value” of any one path. The “expected values” typically highlight one decision as more favorable than another.

The following example shows how a company used a very simple decision tree to analyze the hosting options for a SharePoint farm. Realistically, every organization will have different criteria for selecting an option but this example can be adapted to meet the requirements of different scenarios.

In this example Contoso is a Widget manufacturer with a global user base. Although Contoso’s leadership supports deploying a SharePoint farm, the organization has not chosen a hosting option. The company has the following options to evaluate: on-premises on physical servers in the organization's Windows Server 2003, Datacenter Edition or on a cloud platform. Another decision is the type of cloud: private (SharePoint 2013 deployed on-premises running on Hyper-V host servers) or public (SharePoint Online)?

Contoso identified the following criteria as the most important to support its business:

  • The level of SharePoint farm uptime availability for its global user base.

  • A lower total cost of ownership (TCO) in relation to the current physical IT environment.

  • The ability to customize SharePoint functionality when the farm is hosted in a specific environment.

Before the Contoso team created the decision tree, it assigned a weight to each of the criteria to identify relative importance. The weight might be based on a number scale and percentage system. Regardless of the approach, the idea is to have a way to quantify the criteria. For example, how important is availability compared with TCO and customizability? Using 1 as the total for all the options, the team assigned the weights that are in the following table.


Criteria Weight



TCO Reduction




After the Contoso team assigned weights to criteria, it created the decision tree in the following illustration. Standard symbols are used to represent decision points (squares) and criteria evaluation point (circles.) When you refer to the illustration, note the following:

  • The first decision point is at the root of the tree, where the choices are an on-premises option or a public (off-premises) option.

  • Following the on-premises branch, the next decision point is between the virtualized, private cloud option and physical servers. Each of these options uses the criteria evaluation points that the Contoso team established.

  • Following the public branch, the next decision point is between the hosted private cloud option and the public cloud. Each of these options uses the criteria evaluation points that the Contoso team established.

Hosting options decision tree with weighted critera for each path.

The Contoso team then reviewed all of the criteria in each path and assigned scores to the criteria. The scale is 1-10; 10 is the best score. The following illustration shows the scores that the team assigned to all the criteria for each option.

Hosting options decision tree with weighted criteria and scores for the criteria.

The final step in the decision tree analysis was to calculate the total expected value for each path. The Contoso team used the following steps to calculate these values for each option.

  • Multiply the weight by the score to obtain a result for each criterion.

  • Add the results for each criterion in a path to get a total for the path.

The following illustration shows the final results of the Contoso decision tree analysis.

Hosting options decision tree with final scores calculated for each option.

Based on the results of their analysis the Contoso team decided that the Public cloud option, with a score of 7.75, was the best choice to host its SharePoint farm.

The following table gives a summary of the decision tree analysis.


Location Option Criteria Weight x score Result Total score


Virtual, private cloud

  • TCO reduction

  • Availability

  • Customizability

  • .30 x 4

  • .45 x 7

  • .25 x 10

  • 2.50

  • 3.15

  • 2.50



Physical servers

  • TCO reduction

  • Availability

  • Customizability

  • .30 x 1

  • .45 x 7

  • .25 x 10

  • 0.30

  • 3.15

  • 2.50



Hosted private cloud

  • TCO reduction

  • Availability

  • Customizability

  • .30 x 5

  • .45 x 9

  • .25 x 8

  • 1.50

  • 4.05

  • 2.00



Public cloud

  • TCO reduction

  • Availability

  • Customizability

  • .30 x 9

  • .45 x 9

  • .25 x 4

  • 2.70

  • 4.05

  • 1.00


Many resources and tools can help you to analyze data, create models, and produce metrics. However, the value of these results depends on the quality of the data that you provide. Your evaluation criteria and weights must be relevant and sufficient to accurately reflect the business requirements of the SharePoint farm. Finally, when you evaluate the business value of a hosting option, consider the intangible benefits in addition to the financial aspects. A balanced approach makes sure that you consider all aspects of investment, which in turn, contributes to selection of the optimal solution to host the SharePoint farm.