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We have SharePoint 2013 on-premises setup with office web apps. Document co-authoring works when multiple users are editing same word document in browser but if they open and edit into office word client application (Tested with both - Office 2010,2013) any single user can edit at a time. Another user gets read only document and unable to save changes.

Is there any extra configuration needed? Are we missing anything?

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i think its "by design":

Check out – When a user checks out a document for editing, the document is locked for editing by that user. This prevents co-authoring. Do not enable the Require Check Out feature in document libraries in which co-authoring will be used. By default, Require Check Out is not enabled in SharePoint Server 2013. Users should not check out documents manually when co-authoring is being used. For more information, see Set up a library to require check-out of files. more on link: https://technet.microsoft.com/en-us/library/ff718249(v=office.15).aspx

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i tried it on SharePoint 2013 Server with my colleague, but you should use MS Office 2016. This version of Office has capability to edit documents on client side in co-authoring.

Co-authoring on document saved on SharePoint 2013 Server with Office 2016

Co-authoring on document saved on SharePoint 2013 Server with Office 2016

I hope this helps to You! :)

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