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With document libraries I have often found the advice to never set versioning on without setting an upper limit on the number of major and minor versions. One such case being this - refer point 6.

However then every once in a while there is a business case where you would need to ensure that versions as old as 7-8 years are being retained, for the off chance that you need to produce the audit trail. Normally, in order to achieve this, you would need to set the version limits to SharePoint maximums.

However my question is,

(A) Is SharePoint the best choice for such sensitive data? Have you come across any other tool/custom setup that is more efficient than SharePoint at this?

(B) With SharePoint, have you come across a configuration that handles the requirement in such a way that doesn't eat up the database much and still meets the audit requirements? (As in, could there be any configuration of information management policies or workflows that works here?)

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Either you need to keep all the versions or you don't. If you do, you are gonna take a hit on space, no matter what the platform. If your use case utilized major an minor versions and you kept the major versions only, you might find a happy medium. (or a sad sage)<--sorry obligatory for personal reasons

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