Summary:
- Colocation and on-premises data centers are losing share to hyperscalers but are still growing at a slower rate.
- On-premises data center capacity is experiencing growth due to genAI applications and GPU infrastructure.
- Enterprise workloads are shifting towards cloud providers, but a significant subset are remaining on-premise, leading to an increase in enterprise GPU servers.
Article:
On-Premises Data Centers: A Shift in Growth Trends
While the dominance of hyperscalers in the data center market continues to grow, colocation and on-premises data centers are not disappearing. Instead, they are experiencing slower growth rates compared to their cloud counterparts.
Slow Growth, Not Shrinkage
It may seem like colocation and on-premises data centers are shrinking in relevance, but in reality, they are still growing. The key difference is that their growth is not as rapid as that of hyperscalers, creating the illusion of decline.
The Rise of GenAI Applications and GPU Infrastructure
One factor contributing to the resurgence of on-premises data center capacity is the adoption of genAI applications and GPU infrastructure. These technologies are driving a boost in enterprise GPU servers, attracting a substantial subset of workloads to stay on-premise.
John Dinsdale, Chief Analyst at Synergy Research Group, notes, “While many enterprise workloads are moving to the cloud or colocation facilities, there is a notable increase in the use of on-premise GPU servers for specific applications.”
As the data center landscape continues to evolve, it’s clear that on-premises facilities are not becoming obsolete. Instead, they are adapting to new technologies and applications, ensuring their continued relevance in the ever-changing world of data management.
