Many organizations using SharePoint 2010 and above use folders in
order to categorize and organize their content. But I feel the best approach
would be to leverage metadata as much as possible.
Document Sets were
introduced in SharePoint 2010 and provide a broad range of capabilities to
manage content. In addition to simply categorizing content the they allow
the grouping of related content into a single entity. The content that is
contained within a Document Set can be treated as an atomic unit or a part of a
larger set of documents that can be treated consistently.
A document set is a group
of related documents that can be created in one step and then managed as a
single entity. A document set is not a view, but a special content type. It
is managed and deployed from a site collection level. You can create custom
document set content types with site columns and managed metadata. You can
apply unique permissions to document sets. You can view a document set’s version
history. You can trigger workflows within a document set.”
Document Sets and Folders present a similar interface to users,
however the functionality in Document Sets are specifically targeted to support
business processes and the management of content as a single unit.
Few key differences are listed below:
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Document sets are not available in SharePoint Foundation 2010
while folders are available.
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Document sets can be created only in document libraries, whereas
folders can be created in either libraries or lists.
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Folders are not allowed within document sets.
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Document sets can’t be nested, whereas folders can be nested.
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Metadata can be assigned to document sets but not folders.
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Workflows can be started on document sets but not folders.
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