Strategies for managing projects in SharePoint

I work in an IT department, and we use SharePoint to manage our projects with business constituents. Currently, the structure we have in place is one large document library, and each project has its own folder in that library.

What I'd like to do instead is create sub-sites for some of the projects (so that discussions, tasks, documentation, etc. can be logically grouped together within the scope of a project). However, we do a decent number of projects per year, and I'm concerned about what will happen as the number of sub-sites grows. (I should also mention that our entire intranet portal is a single site collection, so all of these project sites, along with all other sites in our intranet, would all be in this one site collection.)

What are some strategies for dealing with this? I remember Bob saying something during the class I just took with him about trying not to exceed 200 sites per site collection. Creating a sub-site per project would certainly do that, so I'm trying to figure out what I should do (or least what factors I should be considering in making a decision).

Thanks!

The logical grouping of sites in to Site Collections has many benefits which include (but not limited to) governance, security administration, aggregation and so on.  I would have recommended initially breaking project sites out from the rest of your Intranet content from the start.

200 Sites in a Site Collection is a good number to stay below as a general rule of thumb.  You have to ask yourself, if I break our projects out in to their own Site Collection, how quickly will I reach the 200 barrier?  If its 2 years down the road then you may wish to move forward and deal with it later.  If its 2 months down the road then I would deal with it now.

That makes sense.

It also brings to mind one other question I have on the same subject. From what you've seen, do companies tend to archive their project sites at some point in time after projects are completed, or do they just keep the sites sitting around in SharePoint (meaning that as the number of sites grows, sites will eventually need to be grouped into site collections)? Is there an advantage to one approach over the other?

It depends.  The question you can ask yourself is "how valuable is the project information once its complete and closed?"  If you feel its important, which most do, then it should be archived for future research needs.

You then need to determine what archive means; one meaning could be to simply lock the content down so it is read only.  Another meaning might be to move the project site into a different "archive" Site Collection.  I personally like the idea of moving the content in to another site collection because I then have much better control over search scope.