Office 365 in lieu local file server?

We will be ditching our on-premise Exchange server in favor of Office 365.

For a 15 person office sharing a Comcast 30 meg down / 5 meg up internet connection, is it feasible/advisable to use office 365 in lieu of a local file server?

I'm concerned about needing to "download" a file each time it's accessed.  I guess this is mitigated if we get everyone using Office Cloud Apps but there's a certain simplicity of double clicking an .xlsx on a mapped drive on local file server. and having it open in a local copy of Excel 2016.

Of course if we don't have a local file server, we don't have to worry about backing it up - that's a big plus.  We've been lucky but I can close my eyes and imagine a file server failure and an inability to restore from backups.

Are sharepoint libraries the replacement for departmental groups previously stored on a local file server?

Our 1 local server contained active directory (in additional to exchange and files).  If we get rid of it, would we just have each person log into a local account on his/her own pc instead of active directory?   Then they would authenticate via a web browser to log into their cloud account?

I guess we could let the router dispense DHCP and define static IP's for the printers, and have each person add the printer by IP.

I'm having a hard time wrapping my head around having no server in the office.  Do people really do that?

Thanks for any thoughts,
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yo_beeDirector of Information TechnologyCommented:
From my point of view you are trading local access with solid speed for off premise resources.  With this trade-off something needed to be adjusted to accommodate this change of workflow.  What are your average size files and emails.  I  do not think 15 people with 30 down / 5 up will meet your needs.  

How much does a local setup cost you per year for at least 3 years?  Does that cost surpass increase ISP speed.
Vasil Michev (MVP)Commented:
SPO/ODFB is not a replacement for file servers. Yes, you can store documents and generic file there, but it's main strength is collaboration. Applications that work with generic file shares might/will have problem if you move their files to SPO/ODFB. If you want actual file server replacements, look at the Azure files feature:

That said, lots of people have already chosen to go that path, lured by the 1TB per user offering in O365. WIth Files on demand, you can now have a unified view of all the documents/files stored in SPO/ODFB from your local desktop, without the need for downloading them, so if you are already using Windows 10 (fall creators update), you might as well give it a try.

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Rob KnightConsultantCommented:
You still need to consider backing up even when using cloud services. Should.a file become corrupted/deleted, it's simply synced back to the cloud.

I would recommend a local NAS and a facility to back it up and take offsite.

Cloud services typically sync, so your users could have locally installed copies of Office 2016 and sync files locally using One drive. Unless they are processing huge files, this probably won't be an issue on your Internet connection as One drive syncs changes to files rather than the full file, unless of course it's brand new.

They edit the local copy and then it's synced automatically.

As you say, the most performant way would be to use Office Web Apps but they do have some limitations compared to the full apps.
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mike2401Author Commented:
Azur files is interesting @Vasil.  Since we're only one location (small office), we really don't need to centralize multiple islands of data and then sync to a local file server for performance.  Instead, it sounds like it really would be helpful to have a local file server.  Then we could back that up to the cloud (instead of the other way around).
mike2401Author Commented:
Thanks @RobMobility.   The more I'm thinking about this, since the cloud services often work with local syncing for performance, and since we really don't need collaboration features, I think a local server would be good and then back that up to the cloud.
mike2401Author Commented:
Thanks everyone!
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