Collaboration via cloud computing utilizes shared files stored online, enabling simultaneous access and editing. Multiple users can work on the same document in real-time from any location with an internet connection. In contrast, local collaboration relies on files stored on a specific device or internal network server. Users typically work on individual copies, requiring manual file sharing (like emailing or USB transfer) and explicit version control, which prevents real-time co-editing and creates synchronization challenges.

For example, a project team might use Google Docs to collaboratively edit a shared strategy document remotely, seeing each other's changes instantly. A design agency sharing large multimedia files might opt for platforms like Dropbox Business for centralized cloud storage and feedback. Conversely, a small team working solely on an internal network drive might manually email file updates or physically hand off USB drives, slowing progress and risking conflicting versions.

Cloud collaboration offers superior accessibility, real-time interaction, and automatic version history, dramatically boosting team efficiency. However, it necessitates a reliable internet connection and raises privacy concerns. Local files offer greater offline access and direct control but hinder real-time teamwork. While cloud adoption is dominant due to its ease and power, certain industries handling sensitive data may still utilize highly secured local environments where internet access presents too great a risk.