Data Processing & Hosting

The 11,482 data processing and hosting companies in the US provide outsourced information technology services to businesses and other organizations. These services include automating business processes, website hosting, providing business software applications via the Internet, video streaming services, time-shared computer capacity, and data entry and reporting services.

Protecting Security of Customer Data

High profile incidents of computer hackers gaining access to social security and credit card numbers housed on a customer's behalf has increased security concerns for data processing and hosting companies.

Cloud Computing

Widespread adoption of cloud computing has increased demand for data processing and hosting companies.

Sep 1, 2026 - State, Local Officials Investigate "Ghost" Data Center Demand

• Data centers have requested roughly as much electricity across the middle swath of the United States as it takes to power every home in the country, but much of that demand may be an illusion, according to Reuters news service. A Reuters review of utility and grid data found that electricity requests from very large power users, mostly data centers, exceed 700 gigawatts, or more than 10 times industry estimates of current US data center power use, across portions of the Midwest, Mid-Atlantic and the South. Consumer advocates and regulators have cautioned that many requests are likely to be duplicative or made by companies without the funds or expertise to see the projects through, according to Reuters. The uncertainty is leading data center hot spots like Texas, Pennsylvania, and Ohio to enact rules to filter out projects that could drive up prices and provoke political backlash without ever being built. Some major utilities are cutting their data center demand figures once financial guardrails, like requiring upfront payments, are put in place, according to Reuters.
• Hyperscalers increasingly want to connect their data centers to off-grid power, according to The Wall Street Journal. The approach bypasses lengthy wait times to connect to the grid. Many hyperscalers are looking to smaller natural-gas turbines that have shorter wait times than the heavy-duty ones but even small turbines are selling out, and reciprocating (aka piston) engines are gaining traction. Reciprocating engines are the type that power cars and cruise ships. Reciprocating engines tend to be smaller, less efficient, more emissions heavy, and require more frequent maintenance than turbines but they are more readily available. Lead times for reciprocating engines can range from one to two years, according to BloombergNEF. Some heavy-duty, utility-scale turbines have wait times of seven to eight years.
• An increasing number of states are trying to limit or ban data center construction in mid-2026, according to the National Conference of State Legislators (NCSL). The proposals all target new facilities and are often paired with requirements to study the impacts of data centers, according to the NCSL. Proponents argue that moratoriums on data centers will allow additional time to explore their effects on local communities and improve power grid resiliency. Opponents argue that the moratoriums will hamper AI development and hurt local economies. Lawmakers in Maine passed the nation’s first statewide ban on large data centers in April but the legislation was vetoed by Governor Janet Mills.
• Revenue for computer data processing and hosting firms increased 13.9% year over year and 6.1% quarter over quarter in the fourth quarter of 2025, according to the US Census Bureau. Data processing and hosting industry employment decreased slightly and wages for nonsupervisory employees increased slightly during the first five months of 2026, according to the US Bureau of Labor Statistics (BLS). Data processing and hosting firms increased prices slightly during the first six months of 2026, according to the BLS.

Industry size & Structure

The average data processing and hosting company has about 50 workers and $28 million in annual revenue.

• There are about 11,482 data processing and hosting companies in the US that employ 570,188 workers and generate revenue of $325.6 billion.
• 50% of firms operate out of a single location.
• Large data processing and hosting companies include Automatic Data Processing, FISERV, Rackspace Hosting, and Alliance Data Systems. Web hosting and cloud computing services are also provided by units of large companies, such as AT&T, Amazon.com, Google and SS&C Technologies.