What will be the proper answer for this question:
"How does SharePoint work?"
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That is about the same as asking "how long is a piece of string?". SharePoint is not a product that "does" anything in particular. There are a few things that come with SharePoint out of the box, without any consideration of what your company actually needs, but in most instances that will not be how YOU and your company may want to use SharePoint.
SharePoint is an egg-laying wool-milk pig.
It can be anything you want it to be, depending on how much effort, budget and resources you are prepared to throw at it.
So, SharePoint works however you configure it to work. You can make it to be
The basic mechanics of SharePoint include SQL Server as the storage system and IIS for presenting the web site. But there are so many layers and services that influence just exactly WHAT SharePoint does and HOW it works, that this is too much for a single question.
You should NEVER just install SharePoint and then wonder what to do with it.
The better approach would be to analyze your business needs and then evaluate IF SharePoint can be applied to solve one or more of these business needs. There may be other systems more suitable for your business situation. Or SharePoint may be a good starting point.
Excuse the rant.
First take a look at: http://www.aiim.org/What-is-Microsoft-Sharepoint This will help get you on the right path.
Then if you want to know more you can take a look at Wikipedia: http://en.wikipedia.org/wiki/Microsoft_SharePoint
Microsoft SharePoint is a Web application platform developed by Microsoft. First launched in 2001, SharePoint has historically been associated with intranet content management and document management, but recent versions have significantly broader capabilities.
SharePoint comprises a multipurpose set of Web technologies backed by a common technical infrastructure. By default, SharePoint has a Microsoft Office-like interface, and it is closely integrated with the Office suite. The web tools are designed to be usable by non-technical users. SharePoint can be used to provide intranet portals, document & file management, collaboration, social networks, extranets, websites, enterprise search, and business intelligence. It also has system integration, process integration, and workflow automation capabilities.
Enterprise application software (e.g. ERP or CRM packages) often provide some SharePoint integration capability, and SharePoint also incorporates a complete development stack based on web technologies and standards-based APIs. As an application platform, SharePoint provides central management, governance, and security controls for implementation of these requirements. The SharePoint platform integrates directly into IIS - enabling bulk management, scaling, and provisioning of servers, as is often required by large organizations or cloud hosting providers.
In 2008, the Gartner Group put SharePoint in the "leaders" quadrant in three of its Magic Quadrants (for search, portals, and enterprise content management). SharePoint is used by 78% of Fortune 500 companies. Between 2006 to 2011, Microsoft sold over 36.5 million user licenses. Microsoft has two versions of SharePoint available at no cost, but it sells premium editions with additional functionality, and provides a cloud service edition as part of their Office 365 platform (previously BPOS). The product is also sold through a cloud model by many third-party vendors.
And if you're still curious and need to ask more general questions from there then communities like http://reddit.com/r/sharepoint are good ones to ask more general discussion orientated questions (this community is more for direct trouble shooting or specific issues).