Your Office Lease Is Not an Infrastructure Strategy

Key takeaways

• Organizations continuously search for ways to maximize the value of expensive commercial real estate. 
• Server rooms should be included in office space ROI assessments. 
• Colocation services enable organizations to reclaim the valuable space consumed by server rooms while retaining control of hardware. 

Commercial real estate is often one of the largest recurring operating expenses for organizations. To squeeze every ounce of value out of their headquarters and branch offices, executive teams carefully negotiate (and renegotiate) lease terms, continuously evaluate office utilization, frequently redesign workspaces, and explore new ways to ensure every square foot supports the business. 

The space occupied by IT infrastructure, however, is often exempt from that same level of scrutiny. Many organizations continue to dedicate valuable square footage to server rooms that were built years ago, when keeping infrastructure on-site was routine.  
 
As those organizations grew, so did their IT infrastructure. IT teams installed additional racks of servers, upgraded cooling systems, and boosted electrical capacity to handle increasing reliance on technology from a growing business. What began as a modest server room gradually became a permanent fixture in the office, occupying some of the most expensive space the organization leases or owns. 

The decisions to build and expand on-premises infrastructure might have made sense initially. And even as cloud adoption accelerated, those decisions still might have been the right ones for organizations that need to retain tight control over dedicated equipment. But do those decisions continue to be in their best interest? 

As organizations rethink workplace policies and develop new infrastructure plans to accommodate tech-driven initiatives, the server room deserves the same strategic evaluation as every inch in the home office.  

Ensuring Real Estate Supports the Business 

The commercial real estate advisor CBRE reports that organizations are continuously searching for ways to optimize office utilization.¹ For example, many are experimenting with flexible seating arrangements that can accommodate shifting hybrid work models and return-to-office mandates. 

Leadership teams are generally willing to expand their space only when they can envision a return on that investment. Expansions are approved when they support anticipated workforce growth, accelerated R&D, or improved customer experiences. 

Infrastructure expansion should be subject to similar standards.  

Every square foot dedicated to a server room represents space that cannot be used for employee workspaces, conference rooms, or customer spaces. And that space is rarely insignificant. Even relatively small server rooms can take up significant space beyond the server racks themselves, consuming square footage for cooling equipment, electrical infrastructure, security controls, and more.  
 
As leadership teams ask more intentional questions about how their facilities are being used to create value, IT infrastructure spaces should be part of that conversation. The server room can’t be given a free pass simply because it’s always been there. 

Recognizing Server Room Decisions Are Business Decisions 

A server room is not just another IT asset. Because it takes up valuable floor space in an office, it’s a financial asset. And it’s also a long-term operational commitment. 

Maintaining IT infrastructure within an office means assuming responsibility for a variety of facilities functions. For example, organizations need to manage power distribution, cooling systems, physical security, environmental monitoring, and fire suppression. This work is critical for the ongoing operation of IT equipment. But because the server room has distinct requirements from the rest of the office, handling this work often requires additional company investments—investments that are dedicated to operating a building rather than moving the business forward. 

Continuing to operate an on-premises server room, then, is very much a business decision, not just a technical one. Leaders need to consider not only the costs of the office space it occupies but also the expanding budget it requires for perpetual maintenance.  

Taking the Real Estate Test 

Sometimes a simple hypothetical question can help leaders re-evaluate plans to maintain or expand their server room: If we were starting from scratch with this space in the office, would we choose to fill it with servers? 

Many organizations continue to operate internal server rooms because that’s how the business has always functioned. Yet if the same organization were opening a new headquarters today, the leadership team might make very different choices about where infrastructure belongs. 
 
Those revised choices stem from greater options. The emergence of cloud services opened new opportunities for many organizations that had previously run everything on premises. Today, even organizations that must run select workloads on dedicated servers still have options that could provide advantages over the server room. 

Deploying Modern Infrastructure Without a Server Room 

Enterprise infrastructure strategies have evolved significantly over the past two decades. No longer constrained to on-premises facilities, the vast majority of organizations today use some kind of cloud services for at least part of their technology needs. 
 
Many, however, have a hybrid IT infrastructure. According to one recent data center report, 98% of IT leaders have adopted or plan to adopt a hybrid IT model.² Technology leaders are increasingly making cloud decisions workload by workload, finding the ones that can be run in shared cloud environments and identifying those that must continue to run on dedicated systems. 
 
For those workloads that shouldn’t be in the cloud, leaders then have additional options. They could continue using on-premises facilities, including those server rooms that take up valuable office space. Or they could use colocation facilities.  

Purpose-built colocation facilities enable organizations to keep certain workloads on their own dedicated servers while housing those servers in facilities managed by a trusted partner. These facilities provide all the necessary power, cooling, physical security, connectivity, and round-the-clock operational support for this IT equipment. 
 
For many organizations, the colocation model addresses technical, financial, and business goals. They can retain control over key workloads, eliminate the capital costs of facility upgrades, and free up valuable office space for other work.  

Rethinking Infrastructure for an Evolving Business 

Colocation facilities not only address today’s challenges; they also give organizations much greater flexibility for evolving needs. An organization might decide to expand into new geographic markets or build a new AI-powered product. These and other decisions could require rapid, large-scale changes to the company’s IT infrastructure. But expanding an outdated server room, which already takes up too much room in a corporate office, might not be feasible.  
 
Using a colocation facility would enable that organization to expand resources or shift workloads without having to undertake massive on-premises upgrades. Facilities decisions made years ago—or a lease renewed a few months ago—no longer have to constrain business growth. 

As long as office space remains a highly valuable corporate resource, leadership teams need to scrutinize how all of that space is used. In some cases, maintaining an existing server room is no longer the best decision. Fortunately, colocation facilities enable organizations to break away from an outdated approach without sacrificing IT control. 
 
Learn more about how colocation services can provide a flexible, scalable alternative to a server room.

FAQ

Q: Why do organizations continue to maintain and expand on-premises server rooms? 
A: Server rooms often exist primarily because of previously made decisions. Rather than challenge the status quo, organizations simply keep them running and expand them when necessary. In other cases, organizations cannot move certain workloads to the cloud—for performance, security, or compliance reasons—and have not explored alternatives. 

Q: Why should companies examine the value of server rooms as part of their commercial real estate discussions? 
A: Commercial real estate is a very costly expenditure for many organizations. Server rooms can take up significant space, restricting square footage for employee desks, conference rooms, and visitor centers. Maintaining that room also adds long-term operational investments. By moving hardware to outside facilities, organizations could convert that space for lower-cost, higher-value activities. 

Q: Why are colocation facilities a good alternative to an on-premises server room? 
A: Colocation services reduce the costs of maintaining and expanding on-premises facilities while enabling organizations to retain control over hardware. Organizations gain the agility to scale up or adapt to evolving business goals without undertaking costly, time-consuming upgrades. 

Citations
1 CBRE, 2025 Americas Office Occupier Sentiment Survey, August 2025 
2 CoreSite, 2025 State of the Data Center, May 2025