Infrastructure in the Age of AI: Why Enterprises are Turning Back to On-Premise Data Centers

Over the last decade, cloud computing has become the dominant player in IT infrastructure. But ever-increasing data demands and cloud costs, latency-sensitive workloads, and compliance concerns have kept on-premise data center solutions on the table—and as the rapid shift from AI training to inference begins, we expect more companies to bring operations back to their home turf.

Now, this doesn’t mean the cloud will become obsolete—but it does indicate that companies are looking to regain control over their IT environments with strategic hybrid models that combine the flexibility and scalability of cloud solutions with the security, performance, and cost benefits of on-site operations.

How is AI inference impacting infrastructure?

As AI models mature and companies rapidly shift away from the training phase, McKinsey & Company estimates that inference will become the dominant AI workload by 2030. As with most shifts in the technology industry, the inference phase brings a new set of performance demands, compliance standards, and security protocols for IT environments.

The infrastructure requirements for AI’s inference phase differ from those of training. Where training demands vast high-performance compute power and storage to process large amounts of data, inference prioritizes low latency and end-user proximity with a smaller storage footprint to enable real-time data and responses. 

And, for companies processing sensitive data or operating in highly regulated industries, granular control over security and compliance is crucial. As AI-enabled cybersecurity threats become increasingly sophisticated, regional data protection laws are outlining more stringent data storage requirements to secure sensitive workloads. According to an IDC survey, 71% of companies already have compliance, security, or privacy requirements for AI—and that number is only going to grow. 

How can on-premise data center solutions help?

On-premise data center solutions offer oversight of infrastructure security and performance, ensuring mission-critical data and processes are protected, compliant, and optimized for real-time applications.

HIGH CONTROL

By bringing data center operations in-house, you can ensure critical infrastructure performs to your standards—not a third party’s. And not only are you in control of all management and decision-making, but internal teams often feel more motivated to innovate, fix issues, and find efficiencies than a third-party cloud or colocation provider.

LOW LATENCY

When you need real-time processing and response for latency-sensitive applications, even minor cloud bottlenecks and network delays can cause costly disruptions. An on-premise data center solution guarantees end users have real-time access to the information they need. 

ENHANCED SECURITY

With an on-prem data center solution, you gain control over the security and performance of your infrastructure, ensuring mission-critical data is protected and compliant with your industry’s complex requirements.

FIXED COSTS

Aside from the initial build and configuration costs, staffing and operating your data center in-house can provide significant savings compared to traditional colocated and cloud-based solutions. No third-party vendor management, no contract lock-ins and rental fees, no unpredictable pricing models. 

Are there drawbacks to on-prem deployments?

While on-prem solutions offer greater security, agility, performance, and cost control for large enterprises and companies operating in highly-regulated industries, they can become a burden for companies without adequate staffing and capital. Common challenges with deploying and maintaining an on-premise data center include:

• Steep Upfront Investment: Depending on the facility’s size and complexity, an on-premise data center deployment can take anywhere from 12 to 36 months, requiring a significant upfront investment in infrastructure and personnel.
• Staffing Requirements: Hiring, training, and retaining the right talent to operate and maintain an on-prem data center is costly and time-consuming. Internal teams are responsible for performance and security 24/7/365—data centers don’t run themselves, after all!
• Rightsizing Challenges: As your business evolves, so do your infrastructure needs.  Smaller on-premise teams may have more difficulty scaling to meet changing demand.

Selecting and deploying the right data center solution can be difficult—but it doesn’t have to be. Teladata’s data center experts can help guide your decision-making, handle implementation and migration, and facilitate a seamless build-out process, ensuring you get the most out of your infrastructure investment.

Teladata can help you get more from your data center.

At Teladata, we believe that strong partnerships are built on true client advocacy. We’re committed to helping you get the most out of your infrastructure investment, whether it’s through assessment services, consultation engagements, or a full-service partnership. 

DATA CENTER ASSESSMENT

Our process begins with a comprehensive Data Center Assessment to identify your company’s unique requirements and specifications and help evaluate potential data center solutions, including any combination of on-premise and colocation. Together, we’ll assess:

• Site Selection
• Physical Capacity
• Mechanical and Electrical Capacity
• Reliability/Redundancy
• Energy Efficiency
• Short-Term and Long-Term Needs
• Budget Creation
• Executive Reports for Funding/Approval

CONSULTATION

As your trusted consultants, Teladata will help create and execute migration plans that set clear expectations and mitigate downtime. We mind the details, planning for any required migrations seamlessly and ensuring your data center investment is maximized. We’ll help guide:

• On-Site Expansion
• Off-Site Expansion
• Colocation
• Budget Creation
• Executive Reports for Funding/Approval

FULL SERVICE

Teladata is your single point of contact for all things data center, from implementations and migrations to full-scale build-out processes. We believe partnership is about being a true client advocate, and we’ll liaise with vendors and contractors, manage budgets and timelines, and keep your team up-to-date at every stage to ensure we’re exceeding expectations. 

We’re your source for:

• Assessments
• Solutions Planning
• RFP/Bid Management
• Project Management
• Technology Fit-Up and Move Management
• Policies and Procedural Development
• As-Built Documentation

Ready to get to work?

So are we. Trust Teladata to help you strategize your next on-premise data center solution. 

Reach out today to schedule a call with our team.