When checking out documents using Office 2007 from a SharePoint library, the user is offered to copy the document to their local drafts folder. Is there a way to disable this option? I want all documents to stay on the SharePoint server and avoid local copies. I am using Windows SharePoint Services 3.0. Thanks.

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You can make it unchecked by default. According to this forum post there an option on the client. Change the Save / Configure option from "The server drafts location on this computer" to "The web server".

There is also a registry key that appears to achieve the same thing mentioned here:

[HKEY_CURRENT_USER\Software\Microsoft\Office\Common\Offline\Options]
"Local"=dword:00000000

I don't think you can remove the checkbox from the dialog altogether. Another registry key described on that page hides the check out dialog completely. Test thoroughly before deploying this as it may have unintended side effects:

[HKEY_CURRENT_USER\Software\Microsoft\Office\Common\Offline\Options]
"ShowCheckOutDialog"=dword:00000000
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Changing the "Local" registry value from 1 to 0 does default the Save Local Draft option to off (i.e., box is unchecked), but unfortunately, the "ShowCheckOutDialog" didn't seem to have an effect, and this is ideally what I would like. I was expecting this to be a server-side configuration option; I hadn't considered that this is really a client-side Office issue. Thanks for the enlightenment. --Steve – Steve Sep 22 '09 at 13:50
@Steve: Yes, it's all tied up with the ActiveX controls installed with Office 200x (the "Windows SharePoint Services support" option in client setup). – Alex Angas Sep 22 '09 at 15:55
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