Teams, SharePoint and OneDrive: Which Tool for Which Job?
They overlap. They're confusing. Here's a practical guide to deciding what belongs in Teams, what belongs in SharePoint, and what belongs in OneDrive.
Microsoft 365 gives you three places to put files and have conversations: Teams, SharePoint, and OneDrive. They overlap deliberately — Teams is built on top of SharePoint; files “in Teams” are actually in SharePoint; a Teams channel has an associated SharePoint site, and so on.
This overlap is useful technically and confusing practically. Staff routinely ask: “Where should I put this?” Here’s the short answer.
The one-sentence version
OneDrive for personal work. SharePoint for team libraries. Teams for active conversation and collaboration.
If you remember nothing else, start there. The rest of this post is detail.
OneDrive — your personal cloud drive
OneDrive is your personal cloud storage. Think of it as your home directory: your drafts, your one-off notes, files you’re working on before they’re ready to share.
Best for:
- Drafts and work in progress
- Personal notes and scratch work
- Files you might share with one or two people occasionally
- Anything private to you (HR docs addressed to you, personal certifications, etc.)
Not for:
- Anything the business owns and needs to outlive your employment
- Files that belong to a team or department
- Documents multiple people need to edit regularly
The offboarding test: if this file needs to still exist when you leave the company, it shouldn’t be in your OneDrive.
SharePoint — your team’s document library
SharePoint is your team’s or department’s document library. Files live at the team level, not the individual level — they persist when people leave, they’re owned by the team, and permissions are managed at the library or site level.
Best for:
- Team files that persist beyond individual tenure
- Department documents (policies, procedures, templates)
- Project artefacts that multiple people contribute to
- Reference material that many people read but few edit
- Intranet-style content (news, announcements, company info)
Structure that works well for most SMBs:
- Company intranet site (home page, announcements, policies)
- One site per department (Finance, Marketing, Operations, etc.)
- One site per major project or initiative
- Hub structure tying them together
Permissions matter. SharePoint’s main advantage over a shared network drive is granular permissions. Use them. Not everyone needs edit access to everything.
Teams — active conversation and collaboration
Teams is where active work happens — conversations, meetings, quick file sharing, project collaboration. Behind the scenes, each team is backed by a SharePoint site (files tab → SharePoint) and a mailbox (group email), but staff interact with the Teams app.
Best for:
- Ongoing conversation within a team or project
- Meetings (video, audio, screen share)
- Active documents being co-authored right now
- Quick file sharing within a group
- Channel-based organisation (General, Projects, Random)
Not so good for:
- Long-term reference material (use SharePoint)
- Personal notes and drafts (use OneDrive)
- One-off conversations with external people (use Outlook + email)
Tip: when you create a “Team” in the Teams app, you’re also creating an Entra ID group, a SharePoint site, a mailbox, a OneNote notebook, and a Planner board. Don’t create teams casually — clean up later is painful. Use channels within existing teams more, new teams less.
The hybrid scenarios that actually come up
”I need to share this file with a colleague once”
OneDrive share link. Individual grant, can be revoked, can be time-limited, doesn’t clutter any team’s library.
”This project is a three-person collaboration”
Create a Teams team for it if the project has real conversation volume, or a shared SharePoint site if it’s mostly document-driven. If it’s a one-off, a shared OneDrive folder from one person’s drive is fine.
”This is a company-wide policy document”
Company intranet SharePoint site. Read access for everyone, edit access for HR or whoever owns it. Keep it in one canonical place; don’t email PDF copies around.
”The leadership team needs a confidential shared space”
Dedicated Teams team for Leadership, with membership restricted and permissions set appropriately. The underlying SharePoint site inherits the Teams permissions.
”Sales team needs a shared library of templates and collateral”
Sales department SharePoint site. Everyone in sales has edit access; potentially external partners have read-only access to specific folders.
”An external partner needs to submit files to us”
Use SharePoint guest access (M365 B2B) for ongoing collaboration. For one-off submissions, a secure upload link.
Common anti-patterns to avoid
Everything in OneDrive. When every business file lives in individual OneDrives, the business doesn’t actually own its documents. When someone leaves, files disappear (or are painful to reclaim). Team files belong in SharePoint.
One Teams team per project. Teams proliferation is a real problem. Use channels inside existing teams where possible. Create new teams only when the audience and purpose are genuinely distinct.
Every team set to “public” for discoverability. Default to private, set to public only when you mean it. Public teams are visible to the whole organisation, which is rarely the right default.
Sharing files as email attachments. Attachments fragment the source of truth. Share the SharePoint or OneDrive link instead — everyone stays on the latest version.
Migrating the file server folder structure directly into SharePoint. The deep nested folders that worked on a network drive don’t work well in SharePoint. Rethink the information architecture during migration; don’t just lift-and-shift.
A practical decision flow
Next time you’re deciding where a file goes, work down this list:
- Just you, for now? OneDrive.
- A team or department’s business-owned document? Their SharePoint site.
- Being actively collaborated on in a project? Teams channel (which is SharePoint under the hood).
- Cross-team reference material? Central SharePoint intranet.
- Confidential to a specific small group? Private Teams team with restricted membership.
The bottom line
Teams, SharePoint, and OneDrive aren’t competitors — they’re layers. OneDrive is the personal layer, SharePoint is the organisational layer, and Teams is the active-collaboration layer on top.
When staff understand the distinction, file management becomes natural and scalable. When they don’t, you end up with critical business files scattered across individual OneDrives, broken links in emails, and confusion about who’s working on what.
If your M365 tenant grew organically and you’ve got that scatter, it’s fixable. We help Australian businesses design a clean Teams + SharePoint structure, migrate content off file servers and OneDrives, and train staff to use each tool where it works best. Get in touch to talk about what that looks like for your business.