SharePoint vs OneDrive vs Teams comes down to ownership. OneDrive holds files one person owns and is still working on; SharePoint holds files the business or a team owns; and Teams isn't a third store at all: channel files live in a SharePoint site, and files sent in a chat sit in the sender's OneDrive. Key IT applies that split when moving Melbourne businesses into Microsoft 365.
Get it wrong and the cost shows up later: tender files stuck in a departed manager's OneDrive, or Copilot summarising an over-shared HR folder for whoever asks. Every Microsoft detail below was checked against Microsoft's documentation in October 2026.
What is the difference between SharePoint, OneDrive and Teams?
OneDrive is personal work storage. Microsoft's OneDrive service description says it's provisioned per user to serve individual needs, and that departmental or organisation-level data isn't a supported use. Business plans include 1 TB per user.
SharePoint is where shared business files belong: sites and libraries owned by a group, not a person. Business plans pool SharePoint storage at 1 TB plus 10 GB for every licence, counted apart from OneDrive, according to Microsoft's SharePoint limits.
Teams is the front door. Microsoft's Teams and SharePoint integration guide explains that creating a new team creates a SharePoint site. Standard channels share it, each with a folder; each private or shared channel gets its own site, open only to its members. Chat attachments are different: Microsoft's Teams file storage article says files sent in a one-to-one or group chat are stored in the sender's OneDrive and shared only with that conversation.
Where should each type of file live?
Ask of every file: who needs it if its author goes on leave tomorrow? Nobody means OneDrive. A team or the business means SharePoint, usually reached through Teams.
| Type of file | Where it belongs | Why |
|---|---|---|
| Drafts and personal working files | OneDrive | Nobody else sees them until you share |
| Desktop and Documents on work laptops | OneDrive, using Microsoft's Known Folder Move | Staff keep their habits; files land in the cloud |
| Accounts, payroll and HR | A SharePoint site with a small membership, or a private team | Access follows a group, not whoever set it up |
| Live projects, jobs and client matters | A team, with a channel per workstream | Conversation and files together, stored in SharePoint |
| Staff handbook, letterhead and forms | A SharePoint site everyone reads and few edit | One current copy, not a dozen emailed ones |
| Work with clients, subcontractors or consultants | A separate site or team that allows external sharing | Confidential sites stay closed to outsiders |
| Files dropped into a one-to-one chat | The sender's OneDrive, so move keepers to a channel | Chat files go wherever the sender's account goes |
Still on a file server? Our file server to SharePoint migration checklist deals with path limits, permissions and cut-over before anything moves.
How do OneDrive, SharePoint and Teams compare on sharing, sync and recovery?
| Question | OneDrive | SharePoint | Teams |
|---|---|---|---|
| Who can open files? | The owner, plus anyone they share with | Site members, plus people sent a link | Team members; private and shared channels only their own members |
| External sharing | Same as the SharePoint setting or stricter, never looser | Set for the organisation, then tightened per site | Follows the connected site and Teams guest settings; shared channels can't share with outsiders who aren't channel members |
| Sync to File Explorer | OneDrive sync app | Same app: sync a library or add a shortcut | Same app, via the channel's library |
| Deleted files | Restorable for 93 days | Recycle bins hold items for 93 days | As for SharePoint |
| When the person leaves | Their manager gets access by default; 30-day retention unless changed | Files stay with the site | Channel files stay with the team |
Version history works the same way in both. Microsoft's version history limits page lets admins choose Microsoft's recommended automatic setting or a manual version cap, with or without an age limit; versions past those limits are deleted permanently, skipping the recycle bin. Under the automatic setting, Microsoft's version storage guide keeps every version from the first 30 days, up to 500, then thins older ones to hourly, daily and weekly snapshots. Ideal for undoing a bad edit; no substitute for backup.
For syncing, Microsoft recommends OneDrive shortcuts where available, and its limits page advises syncing no more than 300,000 files from any one library.
How should a small business handle external sharing?
Deliberately, because it's on out of the box. Microsoft's external sharing overview confirms it's turned on by default across SharePoint and OneDrive, and advises keeping confidential information in a site with external sharing off, with extra sites for work involving outsiders.
The riskiest option is the "Anyone" link. Microsoft's sharing settings documentation describes these as links that open without signing in; a forwarded copy works for whoever receives it, and you can't track who has access. If you allow them at all, three settings close most of the gap:
Change the default link type to Specific people or Only people in your organisation, so a hurried click doesn't create an open link.
Make Anyone links expire after a set number of days, and restrict them to view-only.
Set guest access to expire, so a subcontractor from a job two years ago doesn't still hold a key.
A builder might run one site per project for drawings shared with subcontractors, apart from tender and finance sites; an accounting or consulting practice might run a team per client, with guests invited by name. More on IT for construction companies and professional services firms.
What are the most common file mistakes in Microsoft 365?
The company's files in one person's OneDrive
Often the owner or office manager saves everything to their own OneDrive and shares folders out. Microsoft doesn't support that use, and its OneDrive retention and deletion guide says that when the account is deleted, the manager gets access by default for a 30-day retention period unless an admin changes it. A OneDrive left without a licence is archived on its 93rd unlicensed day.
A licence bought for a department
Giving "accounts@" its own OneDrive for team files breaks the same rule: Microsoft doesn't support assigning a per-user licence to a department or other non-human entity. Use a SharePoint site.
Sensitive work in a public team
Microsoft defines a public team as one anyone in the organisation can join. Fine for the social channel; wrong for payroll.
Chat as the filing cabinet
A signed quote dropped into a one-to-one chat lives in the sender's OneDrive, a poor home for a record the business needs next year.
Treating version history as a backup
Versions past a library's limits are removed for good, and the SharePoint and Teams recycle bin only holds deleted items for 93 days. Ransomware on a synced laptop or a hijacked account can damage cloud copies too, which is why Key IT adds an independent, immutable backup of Microsoft 365 mail and files through its backup and disaster recovery service.
Does Copilot respect SharePoint, OneDrive and Teams permissions?
Yes, and that's exactly why permissions matter. Microsoft's Copilot data, privacy and security page says Copilot only surfaces organisational data each user has at least view permission for, and urges customers to use SharePoint's permission models so the right people reach the right content. Copilot doesn't open new doors; it walks quickly through every door already left open. (Microsoft 365 Copilot now goes by Microsoft Copilot.)
Microsoft's oversharing report guidance calls content shared with "Everyone except external users" a top oversharing risk, because every internal user can see it and it surfaces directly in Copilot search results. Microsoft's documentation adds three points:
Outside access counts
Permissions given to other organisations through Teams shared channels are part of what Copilot respects.
Labels carry through
For files encrypted with sensitivity labels, Copilot honours each user's usage rights.
Clean-up tools come with the licence
Assign even one Copilot licence and SharePoint admins get SharePoint Advanced Management features, including oversharing reports and restricted content discovery, which keeps chosen sites out of search and Copilot results for anyone who hasn't recently worked with them.
Planning a Microsoft Copilot rollout? Pilot it with a small group, use the reports those licences unlock to take "Everyone except external users" off sensitive content and expire stale links, then widen access.
How does Key IT set up SharePoint, OneDrive and Teams?
Key IT's security-certified engineers look after Microsoft 365 for Melbourne businesses from migration through to everyday support, and harden every tenant with multi-factor sign-in and conditional access. Our Microsoft 365 time-savers show staff why a shared link beats an attachment. Support calls reach Key IT's helpdesk between 8am and 5pm on weekdays; for managed clients, on-call engineers cover urgent problems after hours, and businesses in regional Victoria are looked after remotely.
Frequently asked questions
Is OneDrive the same as SharePoint?
No, though they're closely linked. OneDrive is one person's work storage, licensed per user. SharePoint holds sites and libraries owned by a team or the whole business, so files stay put when people come and go. The OneDrive app syncs both, which is why many staff never notice the difference until someone leaves.
Where are files shared in a Teams chat stored?
In the sender's OneDrive, inside a Microsoft Teams Chat Files folder, shared only with the people in that chat. Files posted in a channel are stored in the team's SharePoint site instead. Anything the business must keep, such as a signed quote or final drawing, belongs in a channel or SharePoint library.
Should a small business use Teams or SharePoint for shared files?
Usually both, because they're the same storage seen through different windows. Use a team where people discuss the work as it happens, such as a project or client job; its files land in SharePoint automatically. Use a plain SharePoint site for content people mostly look up, such as policies, templates and archives.
What happens to someone's OneDrive when they leave?
When an admin deletes the account, Microsoft gives the person's manager (or a nominated secondary owner) access to their OneDrive by default, for a 30-day retention period unless the business changes it. It then sits in a recycle bin for 93 days, restorable only by an admin using PowerShell. Moving shared work into SharePoint before anyone resigns avoids the scramble.
Are "Anyone" links safe to use?
Only for material you'd be comfortable seeing anywhere, such as a public brochure. Anyone links open without sign-in, keep working when forwarded and can't tell you who has access. For clients, subcontractors and suppliers, a Specific people link is the safer default, because the recipient has to verify who they are.
Can Copilot show me files I don't have access to?
No. Microsoft says Copilot only draws on organisational content each user can already view. The catch is that staff can often view more than anyone intended, through public teams, company-wide sites and old sharing links. Tidy those before Copilot reaches everyone, so its answers reflect the access you meant to give.
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