Data Processing, Hosting, and Related Services — Business Survival Rate
An estimated 51% of data processing, hosting, and related services businesses survive their first 5 years, based on U.S. Census Bureau Business Dynamics Statistics. The annual business closure rate is 12.6%.
Is Data Processing, Hosting, and Related a Good Business to Start?
With a 51% five-year survival rate, data processing, hosting, and related services is near the national average (~50%). This means roughly half of new entrants will still be operating after 5 years — typical business risk that rewards solid planning and execution.
The annual exit rate of 12.6% indicates moderate turnover. Success depends on differentiation, location, and operational efficiency rather than inherent industry advantages.
Entry vs. Exit Rates
Annual rate of new businesses opening versus existing businesses closing.
Net positive: more businesses opening than closing (+1.3 pp spread).
Job Creation & Destruction
The industry is adding jobs faster than losing them — a positive sign for both workers and new business owners looking to hire. Total employment: 600,966 workers across 9,920 firms.
Want to know how much data processing, hosting, and related services businesses actually make?
See full revenue benchmarks for Data Processing, Hosting, and Related Services →Frequently Asked Questions
- What percentage of data processing, hosting, and related services businesses fail?
- Approximately 49% of data processing, hosting, and related services businesses fail within their first 5 years. The annual closure rate is 12.6%, with 1,094 firms closing permanently in 2023.
- Is the data processing, hosting, and related services industry growing or shrinking?
- The data processing, hosting, and related services industry is currently growing with a net job creation rate of +3.1% per year. New businesses are entering at 13.8% while 12.6% close annually.
Source: U.S. Census Bureau, Business Dynamics Statistics (2023). Survival rate estimated from annual exit rates.