In the Uptime Intelligence report Will power shortages drive an on-prem renaissance?, Uptime describes how the rise of AI and a shortage of power may, ultimately, lead to a rise in colocation costs and a shortage of space availability, encouraging a revival in on-site data center investment.

There are signs that CIOs and CFOs are now beginning to see the enterprise data center as a more competitive option than they did in the period from 2010 to 2020. Data from the 2025 Uptime Institute’s data center survey (see Figure 1) suggests that the attrition of enterprise data centers (in terms of share of workload) is real, but is both slow and slowing. The rate of attrition is certainly much lower than was envisaged a decade ago, when it was widely accepted that enterprise data centers had no future.

Figure 1 Share of enterprise IT workload is not predicted to decrease significantly

In 2025, enterprise operators estimated that about 45% of corporate workloads were on-premises, which was a significant attrition rate from five years earlier, when the data center proportion was 58%. What is notable, however, is that the rate did not fall from 2024 to 2025, as it had in previous years and, more importantly, it is not projected to decrease significantly by 2027 (down to 42%). In the past, operators have often forecast a faster transition to cloud and colocation than what ultimately occurred. This time, however, their collective forecasts indicate a slow rate of change, suggesting few data centers will be decommissioned.

To be fair, these figures come with many caveats and should be viewed only as a very approximate trend indication. For example, if most AI activity, including training, is off-site then this would make it difficult to measure and hard to attribute accurately. Additionally, the sample is skewed only toward large organizations with at least one data center or data center capacity in a leased space or colocation site. This creates a strong bias. The sample size has also declined gradually, but this could be down to a range of factors.

However this data is interpreted, it points to a clear message: while the public cloud and large companies are, and will continue to be, dominant, the on premises and private cloud sector is also strong and here to stay. The wider context is that all IT workloads are expanding fast and, with power and colocation capacity likely to become constrained, on-premises data centers may prove to be critical. This is not a good time to be giving up capacity.