A Comprehensive Guide to Types of Data Centers by Industry

If you search “types of data centers,” you’ll find plenty of definitions. What you won’t always find is context—specifically, how different industries actually use different types of data centers, and why those differences are becoming more important every year.

Across North America, data center capacity is in full swing, with vacancies reaching a historic low of 1.6% in mid‑2025, largely driven by cloud and AI demand and use. At the same time, the International Energy Agency (IEA) expects electricity demand from data centers to more than double by 2030. This means smart use across industries is more important than ever.

Let’s take a look at what data centers do, why they’re important, and which industries are using them the most.

What Are Data Centers?

A data center is the physical place where organizations run applications, store data, and move information securely and reliably. This includes everything from customer-facing platforms and analytics tools to mission‑critical systems and AI workloads.

They’re typically built by tech companies—companies like Microsoft, Google, and Meta are all investing in data center construction to support their platforms. These companies would have started out storing information onsite at their own offices. But with the expansion of applications and technology, greater storage volume has become necessary.

Behind the infrastructure itself, data centers are supported by specialized teams that typically include:

Data center technicians
Network and systems engineers
Facilities and critical infrastructure managers
Field technicians
Site reliability engineers
Operations or commissioning leads
Field service engineers
Mechanical engineers
Electrical engineers

These positions keep environments secure, resilient, and running around the clock.

How Have Data Centers Evolved?

To understand today’s landscape, it helps to look not just at what data centers are, but how their purpose has evolved alongside rapid digital expansion.

What has changed is the role data centers play. As digital services have expanded in recent years, data centers have become foundational infrastructure on par with power, networks, and cloud platforms. Availability, resiliency, and operational discipline are top priorities as architectures become more complex and distributed.

Breaking Down the 5 Core Types of Data Centers

When technology leaders talk about types of data centers, they’re usually referring to a few well‑established categories. Most organizations use more than one.

1. Hyperscale Data Centers

Hyperscale facilities are built to support massive, cloud‑scale workloads. According to Synergy Research Group, there were 1,189 hyperscale data centers worldwide at the end of Q1 2025, accounting for 44% of total global capacity.

These facilities power cloud platforms, AI workloads, and large‑scale digital services on a global scale. They continue to shape how the broader market for compute power evolves.

2. Colocation (Colo) Data Centers

Colocation (colo) providers operate shared facilities where businesses lease space, power, and connectivity instead of building their own data center sites. Colo has become a key option for organizations who need fast access to dependable data centers and look to balance control, flexibility, costs, and speed to capacity.

While this option does increase reliance on third‑party infrastructure and changes how organizations manage risk, it also enables scale, resilience, and cost efficiency when done well.

3. Enterprise (On‑Prem) Data Centers

Enterprise or on‑prem data centers are owned and operated by a single—and usually private—organization. While their share of global capacity has declined over time, there is a renewed role for on‑prem centers due to increased AI applications and infrastructure. These data centers are best for highly regulated, sensitive, or tightly integrated workloads that require direct control.

4. Edge Data Centers

Edge data centers are smaller, local facilities located closer to end users or devices. Their purpose is to reduce latency, improve performance, and enable real‑time processing through edge computing. It can also help with cost efficiency by improving overall bandwidth. AI, IoT, and cloud are driving more latency‑sensitive traffic, and traditional centralized models can’t always support these applications alone.

5. Cloud Data Centers

Cloud data centers are large, centralized facilities designed to deliver computing resources on demand. Operated by cloud service providers, these data centers allow organizations to access compute, storage, and networking capacity without owning or maintaining physical infrastructure.

They support enterprise applications, cloud‑native platforms, analytics, and AI workloads that benefit from flexibility and rapid scaling. For many organizations, cloud data centers offer speed to market and operational agility.

Top Industries Utilizing Data Centers

Every industry relies on data centers today. But the top industries utilizing data centers at scale tend to share one commonality. Digital systems are critical to how each industry operates, competes, and grows. Let’s look at the top six industries driving data centeruse.

Cloud, Software, & Digital Services

The technology sector depends on massive, always‑available computing power, making its infrastructure needs some of the most complex and fastest‑growing in the world.

It’s also the primary driver of hyperscale growth. The most common types of data centers used here are hyperscale and colo. These data centers primarily support:

Cloud platforms and SaaS delivery
AI training and inference
Global digital services

Ongoing capacity growth can be tied directly to cloud and digital services expansion. This area is constantly scaling as technology continues to develop. Data center‑to‑data center and intra‑data‑center traffic now account for the majority of global data center traffic,a fundamental architectural shift away from user‑centric network design.

Financial Services

Because uptime, security, and transaction integrity directly affect financial risk, the financial services industry relies heavily on highly resilient and tightly controlled data environments.

This sector relies on data centers to support highly sensitive, always‑on systems where performance, security, and resiliency are tightly tied to business risk. The most common types of data centers used here are colo and enterprise, with selective use of hyperscale. These data centers primarily support:

Transaction processing and digital payments
Fraud detection, risk modeling, and analytics
Online and mobile banking platforms

Data centers are essential to maintaining uptime, regulatory compliance, and customer trust in financial services. Many institutions use a hybrid approach, balancing dedicated environments for sensitive workloads with shared infrastructure to support scale and redundancy.

Healthcare & Life Sciences

Healthcare and life sciences organizations manage some of the most sensitive and regulated data of any industry, requiring infrastructure that prioritizes privacy, availability, and compliance.

These companies depend on data centers to securely store, process, and share large volumes of sensitive data across care networks. The most common types of data centers used here are edge, enterprise, and colo. These data centers primarily support:

Electronic health records (EHRs) and clinical systems
Medical imaging storage and retrieval
Research data, analytics, and collaboration platforms

Data center strategies in healthcare prioritize security, availability, and data governance. As digital care delivery and data‑driven research expand, infrastructure should continue to grow, likely blending centralized systems with tightly controlled access models.

Manufacturing & Industrial Enterprises

Industrial operations increasingly depend on real‑time data, automation, and connected systems, making distributed and resilient compute infrastructure essential for efficiency.

In manufacturing and industrial environments, data centers power the systems that keep operations visible, efficient, and resilient. The most common types of data centers used here are colo, cloud, and edge. These data centers support:

Supply chain and enterprise resource planning (ERP) systems
Industrial analytics, automation, and digital twins
Data aggregation from connected devices and equipment

Manufacturers often operate a distributed model, where centralized data centers handle analytics and planning while edge environments support real‑time processing closer to production sites. As factories become more connected, data center demand continues to rise alongside operational complexity.

Media, Streaming, & Gaming

Because user experience hinges on instantaneous delivery and low latency, the media and entertainment industry requires data centers optimized for speed, bandwidth, and global reach.

Data centers are the backbone of content delivery and real‑time user experiences in media, streaming, and gaming. The most common types of data centers used here are hyperscale, colo, and edge data centers. Here’s what these data centers support:

Content processing, storage, and distribution
Live streaming and real‑time gaming experiences
User engagement analytics and personalization

This industry places heavy emphasis on bandwidth, latency, and global reach. Like with cloud and digital services, data center‑to‑data center traffic plays a major role as content is replicated and distributed across regions to maintain consistent performance at scale.

Public Sector & Government

Government agencies rely on secure systems to deliver services, driving the need for controlled, resilient, and compliant data infrastructure. A 2025 Congressional Research brief identifies data centers and cloud computing as foundational infrastructure for AI and emphasizes the need for reliable computing resources.

The most common types of data centers used here are enterprise and colo, with increasing use of cloud‑connected environments. These data centers primarily support:

Citizen services and government applications
Records management and data retention systems
Secure and mission‑critical operations

Public sector data center strategies focus on continuity, security, and long‑term reliability. As governments modernize legacy systems and expand digital services, demand for scalable and resilient infrastructure continues to increase.

What’s Consistent Across Industries

Across all industry use cases described above, three themes show up everywhere:

Capacity pressure is real—but it’s manageable. In North America, low vacancy means organizations need to plan earlier and think more proactively about how and where they secure data center capacity to support future operations.
Resiliency is about navigating complexity, not just upgrading hardware. Power availability, grid constraints, and growing reliance on interconnected facilities, networks, and third‑party services all play a role in operational risk and require a more holistic approach to reliability.
Networks matter more than ever. As more data moves between data centers rather than directly between users and applications, cloud architectures, AI workloads, and distributed computing have turned connectivity and interconnection into strategic priorities, not background considerations.

How Insight Global Supports Data Center Initiatives

As organizations blend hyperscale, colocation, enterprise, edge, and cloud models, the complexity of planning, building, and operating these environments increases significantly.

Even organizations that never build a data center depend on them every day. With digital capabilities in constant expansion, more business processes, customer interactions, and supply chains rely on digital infrastructure than ever before, which means the teams supporting that infrastructure matter just as much as the technology itself.

By providing skilled technical talent and professional services, Insight Global helps organizations execute complex data center initiatives with confidence, from early planning through ongoing operations. Reach out to our experts today to start a conversation.