It’s official – more IT work is now off-prem than ever before, and it’s sucking up a whole load of power
- Third-party data centers now host more enterprise workloads than corporate server facilities
- AI infrastructure is steadily pushing rack power requirements to unprecedented operational levels
- Rising electricity costs continue squeezing already stretched data center operating budgets everywhere
Corporate IT infrastructure is increasingly moving beyond company-owned facilities as organizations rely more heavily on third-party data centers for critical workloads.
The Uptime Institute Global Data Center Survey found third-party sites now account for 46% of enterprise IT workloads, compared with 44% still running inside enterprise-owned corporate server farms.
The survey gathered responses from more than 800 data center owners and operators across multiple countries, with 52% located in North America and Europe. It found that 10% of respondents still rely on smaller IT rooms and server cabinets rather than dedicated facilities.
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Off-Premises becomes the default choice
Uptime Institute expects self-owned server halls to hold their current share of workloads through 2028, even as growth continues.
Analysts forecast that third-party facilities will expand further, reaching 48% of workloads and drawing capacity away from informal IT rooms.
Average rack power density has crossed 11 kW for the first time, driven by a shift toward higher-powered hardware across the industry.
Excluding a small cluster of ultra-high-density facilities, the typical rack density figure sits closer to 7.8 kW, up slightly from 7.5 kW in 2025.
Some operators are reportedly shortening hardware refresh cycles to under four years, reversing a trend among major hyperscalers toward longer lifecycles.
Firms such as Microsoft, Google and Meta have instead extended server lifecycles to six or seven years to reduce depreciation costs.
Power demands intensify industry pressures
Uptime found nearly a quarter (24%) of respondents now operate at least some racks rated 30 kW or above, compared with 19% last year.
Much of that increase came in the 50 kW-plus range, including some operators fitting AI and GPU servers into racks exceeding 100 kW.
Outages have declined for a sixth consecutive year, with the share of respondents reporting one dropping by three percentage points.
Even so, Uptime warns that unstable grids, extreme weather and supply chain constraints continue to threaten future reliability across the sector.
Roughly 71% of operators said their worst outage in the past year cost at least $100,000, up sharply from 57% previously.
Rising costs for power, staff and AI-related equipment now rank as the industry’s foremost financial concern.
Capacity forecasting, power availability and ongoing supply chain disruptions add further uncertainty for operators planning large future data center expansions.
Furthermore, over half of operators (53%) now report difficulty finding qualified candidates for vacant roles, up from 46% a year earlier.
Staff shortages further compound these pressures, since electrical and junior operations roles each show skills gaps affecting 38% of surveyed organizations.
Taken together, the figures suggest an industry stretched between surging demand and finite power, staff and equipment supplies — with no easy resolution in sight.
These mounting pressures explain why third-party facilities have overtaken corporate server farms for the first time.
Outsourcing high-density, energy-intensive workloads lets enterprises sidestep infrastructure investments that increasingly strain their own budgets and technical staff.
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Third-party data centers now host more enterprise workloads than corporate server facilities AI infrastructure is steadily pushing rack power requirements to unprecedented operational levels Rising electricity costs continue squeezing already stretched data center operating budgets everywhere Corporate IT infrastructure is increasingly moving beyond company-owned facilities as organizations rely more heavily…
