If firms sign up for cloud-hosted services, then hundreds of square feet of office space could be freed up for other purposes, according to New York-based BBH Solutions.
Cloud computing is the provision of computing services from a computer network rather than from a local computer. Using this method, users don’t actually need the software involved to use a service. This means that the actual computer one uses needs only a minimum of software, ie a web browser and an operating system.
Bruce Hoernecke, CEO of BBH, said: “A typical one-hundred-person office could easily have a data center footprint of 500 square feet or more. With a cloud services arrangement, we could reduce the amount of space needed for IT infrastructure to one data rack with a router, switch, and cable patch panel.”
“Companies that enter the cloud also realise substantial savings on initial hardware investments, because they can leverage their provider’s existing infrastructure.”
Currently, internet giant Google is battling with Microsoft to dominate the quickly expanding world of cloud computing.
Both companies are competing for the business of companies that want to save by eliminating the need to maintain costly software.
Recently, Google unveiled Chromebooks, minimalist computers designed to use the company’s services.
Dave Girouard, Google’s president of enterprise, told USA Today: “Chromebooks is actually a huge leap forward for cloud computing.
“We’re excited about putting more pieces of the puzzle together. Our aim is to be No.1 in cloud computing.”
But Microsoft has announced that it is almost finished with its Office 365, a suite of cloud-hosted services.
Editor’s notes: The relationship between office space and the technology sector has evolved considerably since this article was published in 2011.
It is estimated that cloud-hosted services have expanded from a $76.9 billion market in 2010 to an annualised revenue run rate exceeding half a trillion dollars in 2026.
If we look at the technology sector as an occupier, there were mass global layoffs across the industry following the pandemic, which affected the amount of space these companies rented in various markets around the world, with a high level of downsizing and surrenders.
However, with the commercialisation of artificial intelligence AI services, the technology, media and telecoms (TMT) sector was becoming a larger occupier again.
It was also reported that AI and technology firms had accounted for more than a quarter of total central London office lettings take-up in Q1 2026.
Almost 250,000 square feet of office space had been acquired by AI giants Anthropic and OpenAI in the quarter alone.
Circa 12 million square feet was taken up through office leasing in Central London in 2025 by all occupiers across all sectors, up 5 per cent on the five-year average but down 9.8 per cent on the ten-year average.