Modular Data Center Market

[310 Pages Report] The Modular Data Center market size is expected to grow from USD 25.8 billion in 2023 to USD 81.2 billion by 2030 at a Compound Annual Growth Rate (CAGR) of 17.8% during the forecast period. The impact of the recession (before, during, and after the recession) on the market is covered throughout the report. Easy detection, maintenance of redundant data centers, easy compliance to government regulations and set standards, rising need among verticals across regions for energy-efficient green data centers, proliferation and strong adoption of data center colocation facilities worldwide are a few fundamental factors/forces that drive the global Modular Data Center market.

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Recession Impact on the global Modular Data Center market 

The impact of a recession on the Modular Data Center market can be significant and multifaceted. During economic downturns, businesses often tighten budgets and become more cautious in their capital expenditures, decreasing demand for data center solutions, including modular ones. Organizations may delay or scale back their IT infrastructure investments as they prioritize cost-cutting measures. Additionally, the financing challenges often accompanying recessions can hinder businesses’ ability to secure funding for modular data center projects. As a result, the Modular Data Center market may experience a slowdown in growth, with reduced sales and deployment of modular solutions. Conversely, some companies may still see the value in modular data centers as a cost-effective and scalable solution, especially if they prioritize efficiency and flexibility in their IT infrastructure. The impact of a recession on the Modular Data Center market ultimately depends on the specific dynamics of the economic downturn and the resilience of the companies to adapt to changing market conditions.

Modular Data Center Market Dynamics

Drivers:Increased demand for rapidly scalable and deployable data centers

Because their modular design offers an efficient method of adding and removing data center components, modular data centers are readily scalable. Their popularity among small and mid-sized businesses is further increased because, unlike traditional data centers with rigid designs, they are also easily movable (SMEs). Mobile network providers, which use distributed data centers as a platform to execute the network function virtualization, find these data centers’ scalable design and compact size appealing. Modular data centers also save a lot of time during deployment. Built-in IT space, as well as cooling and power capabilities, are features of modular data centers. Additionally, such data centers comprise components with a standard design, which allow for rapid construction and deployment and are more economical to build than traditional data centers.    

Restraints: Transportation of modular data centers

Prefabricated modules have certain limitations regarding placement and removal because they are bulky and heavy, even though they are movable. Modules could be too heavy to install on a building’s roof or provide a logistical problem in congested urban areas. Usually, trucks are used to deliver data center modules to their destination. Regulations in most nations and regions govern truck transportation on public highways. Over-the-road laws regulate vehicle weights and dimensions, including cargo and right-of-way and speed limits, for the public’s safety. Truck and cargo weight and measurement standards are set to ensure that all vehicles authorized to utilize the roadway system safely can do so. These standards reflect the capacities of roads, bridges, and other facilities. In the US, for example, the interstate highway system has uniform regulations for weights and dimensions of tractor and trailer combinations; however, individual states may enforce separate regulations that further define the weight distribution of truck loads. These vary by state and govern all aspects of trailer geometry, from the distance of the rear axle from the trailer’s kingpin to the payload weight by axle to the different distances between axles. This is similar to the European Union and large countries where standard regulations exist for the region. Still, member countries, provinces, states, etc., enforce their own separate set of regulations.    

Opportunities: Demand from colocation providers for modular data centers

Most businesses do not undertake a significant capital expenditure unless they are confident about maximizing the return on investment, ideally as quickly as possible. Enterprises willing or able to spend extra money overprovisioning space for potential growth struggle with how much capacity to bring online. For instance, if they develop too much data center capacity, the organization’s capital will be wasted. On the other hand, if IT capacity needs to grow faster than anticipated, the business may have to scramble to seek approval for additional money. Instead, many companies use colocation data centers to help them better manage their capacity needs.

Moreover, many enterprises have turned to colocation data centers as big data explodes. This reduces the upfront costs for customers. Gradually scaling a data center is one of the most challenging areas for colocation providers. Thus, using modular design in their data centers is one method colocation providers can successfully scale more quickly and efficiently. Best-in-class modular data centers also supply built-in cooling and power redundancies to minimize the potential for downtime. 

Challenges: Implementing effective cooling systems

Modular data centers come with in-built cooling systems. These cooling systems are typically containerized. However, room-based and row-based cooling is challenging to adopt. It is beneficial when a company uses modular data centers to expand its current data center. Modular data centers are now frequently employed for enterprise data requirements and are incredibly powerful. They can create significant heat levels per square foot and sustain densities of up to 30 kW. The total resources utilized for HVAC (heating, ventilation, and air conditioning) systems and services in modular data center systems were put under strain by the high temperatures, which drove up data center expenses even further. High heat density levels compel organizations to enhance their air conditioning capacity and develop their cooling infrastructure. Even with the additional air conditioning, it is difficult to prevent the data center from briefly failing from overheating. The recommended and permitted operating temperatures for IT equipment are published by the American Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE). The intent is to provide better guidance to ensure the equipment’s reliability and performance while maximizing the cooling system’s efficiency. Hence, most organizations prefer operating in these temperature ranges. These complications in managing the heat levels inside modular data centers may hinder the growth of the global modular data center market.

Modular Data Center Market Ecosystem

Based on Individual modules, the IT module will hold the largest market share in the Modular Data Center market during the forecast period.

IT modules can house cabinets that hold IT equipment, such as servers, storage and networking devices, cabling infrastructure, units for distributing power, air ducts, and other air distribution systems and systems for managing air humidity. The modular data center architecture enables the deployment of these units at various levels of data center infrastructure, such as IT devices, IT cabinets, IT pods, IT rooms, or at the total facility level. IT modules are designed to be easily maintained and replaced in case of failures. Moreover, they support third-party vendor components and hardware, making integration easy. Schneider Electric, HPE, and others provide these solutions for modular data center customers.

Based on organization size, SMEs hold a higher CAGR in the Modular Data Center market during the forecast period.

SMEs are defined as companies with less than 1,000 employees. These businesses are implementing inexpensive, readily expandable solutions. Additional advantages of modular data centers include their cheaper deployment costs compared to traditional systems. Furthermore, these systems’ quick deployment speeds contribute to the rapid growth of data center infrastructure. Modular data centers are simple to maintain and run based on a standard design. These advantages fuel the popularity of modular data centers by SMEs. Making the best use of their current data center space is the driving force behind small and mid-sized data centers. Businesses are moving to high-density data centers, which can handle larger data loads by cramming several servers into a small area. However, high-density facilities need specialized enclosures to support their additional cooling needs.

North America to hold the largest market share in the Modular Data Center market during the forecast period.

Modular Data Center adoption in the North American region has gained considerable momentum, positioning the region as a leader in the field/market. According to experts, North America is expected to have the highest adoption rate of modular data centers compared to other regions. This is due to the growing interest of American households in innovative technologies as well as the increasing investment of North American companies in advanced technologies such as commercial and industrial IoT, 5G, cloud computing, and AI. Many companies use modular data centers to reduce latency, handle network traffic, and lower operational expenses.

North America has captured the largest modular data center market size. The US and Canada are the two leading North American nations influencing the expansion of modular data centers. A study conducted by MarketsandMarkets found that over 55% of businesses have implemented cloud solutions, and over 91% offer at least one cloud-based service. Fewer capital expenditures, simpler IT administration, more agility, and security are among the leading forces for cloud computing’s rise in North America. The US has significant market players, including Schneider Electric, Dell, HPE, IBM, and Vertiv.

Key Market Players

The Modular Data Center market is dominated both by established companies as well as startups such as Dell Technologies (US), HPE (US), IBM (US), Rittal (Germany), Vertiv (US), Huawei (China), Eaton (US), BaseLayer (US), Eltek (Norway), Silent-Aire (Canada), Cannon Technologies (UK), Microsoft (US), Meta (US), AWS (US), Apple (US), Google (US). These suppliers have a sizable clientele, a robust geographic reach, and well-functioning distribution networks. They combine organic and inorganic growth techniques to increase revenue production, such as product launches, agreements, and business expansions.

This research thoroughly analyses these significant competitors in the modular data center market with their corporate profiles, most recent advancements, and essential market strategies. 

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Scope of the Report

This research report categorizes the Modular Data center market to forecast revenue and analyze trends in each of the following submarkets:

Based on Component:

• Solutions
  • All-in-one modules
  • Individual modules
• IT modules
• Power modules
• Cooling modules
• Services
  • Design & Consulting
  • Integration & Deployment
  • Support & Maintenance

Based on Vertical:

• BFSI
• IT & Telecom
• Government & Defense
• Manufacturing
• Retail
• Media & Entertainment
• Healthcare
• Other Verticals

Based on Region:

• North America
  • US
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • Australia & New Zealand
  • Rest of Asia Pacific
• Middle East & Africa
  • GCC Countries
    • Saudi Arabia
    • UAE
    • Rest of GCC Countries
  • South Africa
  • Rest of the Middle East & Africa
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America

Recent Developments

• In November 2023, Vertiv launched Vertiv™ SmartMod™ Max CW, a modular data center that is pre-built and designed to meet the increasing demand for rapid computing deployment. The system supports up to 200kW of total IT load in a single unit and uses chilled water cooling to reduce environmental impact and increase energy efficiency. This solution is now available in the North American region. The SmartMod™ Max CW is factory-assembled and tested, reducing on-site preparation, assembly time, and costs compared to traditional data center construction. The system offers a range of customization options, such as power and cooling capacities, rack sizes, and module dimensions. This flexibility allows data centers to tailor the solution to their specific requirements, from small-scale operations like edge data centers to mid-sized enterprises, government and public sector entities, and healthcare organizations.
• In July 2023, Schneider Electric (France) and HCLTech (India) entered into a deal (collaboration) to create carbon-efficient solutions for data centers in the Asia Pacific region. The aim is to assess risk and responsibility and integrate HCLTech’s sustainable IT practices with Schneider Electric’s operational technology (OT) to develop solutions that improve efficiency, productivity, and modernization of data centers. This initiative also aims to reduce the overall carbon footprint.
• In July 2023, during the Global Smart Green Data Center Summit, Huawei unveiled two new solutions: the EHU (environment handling unit) and the iManager-M mobile intelligent management solution. These solutions are designed to optimize accessible cooling sources, improving cooling efficiency and reducing water and power consumption for greater sustainability. With this technology, data centers can achieve a PUE (power usage efficiency) as low as 1.15 and a water usage effectiveness of only 0.6 L/kWh.
• In May 2023, Dell announced its new edge operation software platform, NativeEdge. NativeEdge is an edge operation software platform for edge infrastructure and application deployment, which includes device onboarding at scale, remote management, and multi-cloud application orchestration to data centers/edge.
• In December 2022, Eaton installed its largest facility in Africa, with a power capacity of 10 MW, at its Midrand site. The upgraded facilities comply with the requirements of data center sites, with power solutions to support them. Despite the limited space and restricted on-site installation time, all the necessary configurations were made to accommodate the project.

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