For many London SMEs, the question of OneDrive vs SharePoint vs Teams is answered by habit rather than by design. A contract may sit in one employee’s OneDrive, a working copy in a Teams channel and a final version in a shared drive that nobody maintains. Staff then spend time confirming which copy is current, and access to sensitive files is granted in ways nobody has reviewed. Microsoft 365 provides three locations with distinct purposes, and each has a correct use. This article explains what each location is for, where misuse creates risk, and how an outsourced IT department can set rules and keep them in place.
Table of Contents
- Quick Takeaways
- What Each Location Is For
- Teams as the Working Space
- Comparing the Three Locations
- Setting Rules That Hold
- Managed Microsoft 365 File Storage
- Frequently Asked Questions
- References
Quick Takeaways
| Key Insight | Explanation |
|---|---|
| OneDrive is for individual working files | Files stored there belong to one account. Shared company records should not depend on one person’s storage. |
| SharePoint holds official, long-term business records | Permissions are managed at site and library level, which supports access reviews and continuity when staff change roles. |
| Teams is the working space, with files stored in SharePoint | Each Team has an associated SharePoint site. Collaboration happens in Teams, but the file record sits in the library. |
| Move files from OneDrive to SharePoint once they become official | A three-stage pattern of draft, share and store prevents duplicate versions and orphaned copies. |
| Create one Team per client, project or department | Membership of a Team grants access to its channel files, so a company-wide Team exposes every file to every member. |
| Name an accountable owner for every Team and library | An owner approves access requests and removes access when a project ends. |
What Each Location Is For
Microsoft 365 assigns each file location a different role. OneDrive is personal storage for an individual’s files, drafts and temporary work. SharePoint is structured, shared storage for teams, departments or the wider organisation, with permissions managed at site level. Teams is the hub for chat, meetings and shared workspaces, and it draws its file storage from SharePoint.
The practical distinction is ownership. Use OneDrive for my files and SharePoint for our files. Microsoft’s published OneDrive plans separate individual offerings from business offerings, which reflects the same split between personal and organisational storage.
The three-stage working pattern
A draft normally starts in OneDrive, is shared with colleagues in a Teams channel for review, and moves to a SharePoint library once it becomes official or needs long-term retention. The most common failure is skipping the final step. An approved contract then remains in an individual’s OneDrive, where it is hard to find, hard to audit and difficult to reassign when that person changes role or leaves.
A written working rule helps staff apply this pattern. Any file that another person will need after the current project ends belongs in SharePoint, not OneDrive.
Teams as the Working Space
Teams is where discussion, meetings and file collaboration take place. When a file is uploaded to a channel, it is stored in the SharePoint site linked to that Team, so the conversation and the record are kept together. Every member of a Team has access to the files shared in it, which makes the Team the boundary for permissions.
Why one company-wide Team creates risk
Some SMEs create a single “All Staff” Team to avoid administration. This places departmental, client and HR files within reach of every member, and the business then relies on folder naming to limit exposure. In our experience, a separate Team for each client, project or department keeps access aligned with real working relationships and makes removal straightforward when work ends.
Pro tip: Before adding a new member to a Team, check which channel files and libraries that person will be able to open, because membership grants access to the Team’s shared files.
Comparing the Three Locations
The table below summarises how each location should be used and the failure that typically follows when it serves the wrong purpose. The distinction matters most for businesses that handle client contracts, payroll or project records, where a misplaced file affects both access control and audit.
| Location | Best Use | Main Risk When Misused |
|---|---|---|
| OneDrive | Drafts, personal notes and temporary working files | Official records become tied to one account and are hard to find or share after a change of role. |
| SharePoint | Official team files, departmental libraries and long-term records | Libraries without a named owner accumulate access that nobody reviews. |
| Teams | Project collaboration, conversations, meetings and channel files | A large, shared Team exposes files to members who have no need to see them. |
Each location is correct for its own purpose. Problems arise when staff treat one location as a substitute for another, particularly when a Team is used as a permanent archive.
Setting Rules That Hold
Guidance on file locations has limited value unless tenant settings and daily routines enforce it. Administrators set the defaults for sharing and library creation, and staff follow routines built around those defaults. Rules are most effective when they are written down, reviewed and tied to named responsibilities.
Naming an owner for every library
Each SharePoint library and Team should have one named owner who approves access and confirms, at regular intervals, that membership is still correct. Shared ownership often results in no ownership. When a project closes, the owner is responsible for archiving the library or removing members.
Responsibility for a file location should follow accountability for its content, not the identity of the person who created the first copy.
Limiting default sharing links
Where the tenant allows it, default sharing links should point to named people rather than to anyone holding the link. This reduces the chance that a confidential file is forwarded beyond its intended audience. Staff should still check the recipient list before sending a link, because a default cannot account for who is copied in.
Pro tip: Review sharing activity for libraries holding client or payroll files every quarter, and remove links that no longer serve a live purpose.
Managed Microsoft 365 File Storage
An outsourced IT department can design and maintain the structure described above, including Team design, library ownership, sharing defaults and the move of files from personal storage into SharePoint. Managed support also means that changes are recorded, reviewed and aligned with the wider security arrangements of the business.
iTO.London’s IT Support Plans start from £88.00 per user per month for Business 1 and from £75.00 per user per month for Business 2. The Essential 10 plan starts from £85.00 per user per month and includes 6 pooled engineer hours for 3 to 10 users. Starting rates include VAT, while licences, onboarding and additional work are itemised in your proposal.
Businesses planning a move to Microsoft 365 can review the Microsoft 365 migration guide for London SMEs and the secure file sharing guide for London SMEs. To discuss support, call +44 (0) 20 3886 3444 or use the contact form.
Frequently Asked Questions
Should company contracts be stored in OneDrive?
No. Contracts that other staff may need to access, audit or amend should be stored in a SharePoint library with a named owner. OneDrive is suitable for personal drafts before a document becomes official.
Where are files shared in a Teams channel actually stored?
They are stored in the SharePoint site associated with that Team. Teams provides the conversation and collaboration interface, while SharePoint holds the file record.
How many Teams should a small business create?
Most small businesses benefit from one Team per client, project or department. A single company-wide Team places all files within reach of every member and is difficult to justify during an access review.
Can a file move from OneDrive to SharePoint without disruption?
It can, but the move should be planned. Existing sharing links and permissions may need checking after the file changes location, and colleagues should be told where the official version now sits.
Does a managed IT provider need to be involved in setting this up?
It is not required, but an outsourced IT department can design the Team structure, configure sharing defaults and review permissions on a regular schedule. This prevents the drift that typically occurs when no one is accountable for the setup.
We would welcome feedback from London business leaders on how their teams currently divide files between OneDrive, SharePoint and Teams, and which rule has worked best in practice.