Modular Data Center Market - Size, Share, Industry Trends, and Forecasts (2024 - 2031)

By Component:

Based on components, the market is segmented into solutions (all-in-one modules and individual modules (IT module, power module, and cooling module)) and services (consulting, installation & deployment, maintenance & support).

Trends in the Component:

• The integration of cooling systems into IT modules proved to improve energy efficiency and performance.
• AI-powered remote monitoring and management systems offer predictive maintenance and minimize the risk of downtime.

The Solutions (All-in-One Modules) sector accounted for the largest revenue share of the total modular data center market share in 2023.

• IT, power, and cooling systems are all integrated into the all-in-one modules and are preconfigured. The businesses use this technology to streamline the deployment process.
• Organizations that require rapid scalability use this technology to reduce complexity as well as downtime using the plug-and-play approach.
• They can be integrated into industries ranging from IT and telecom to healthcare. Moreover, they are energy efficient, meeting the demands of the data centers.
• In September 2022, Modular All-in-Ones was launched by Schneider Electric for data centers. It ensures the optimization of energy efficiency and the automation of operations in the data center.
• In conclusion, scalability and energy efficiency drive the modular data center market demand.

The services sector is anticipated to register the fastest CAGR during the forecast period.

• The need for specialized consulting and support services increases with the rise in the complexities of the deployment processes of modular centers.
• With the increase in organizations requiring personalized solutions services like installation, deployment, and customization are in constant demand.
• These services are also essential for fast deployment and reduced disruptions in sectors like BSFI and healthcare.
• The rising requirement for quick deployment and minimal disruption in critical sectors such as BFSI and healthcare has increased the reliance on expert services.
• In April 2022, A modular data center as a service unit, called Compass Quantum was released by Compass. This includes a range of activities including installation and operations.
• Thus, the need for tailor-made services and fast deployment drives the growth of this segment in the market.

By Data Center Size:

Based on data center size, the market is segmented into small, mid-sized, and large based on their size and capacity.

Trends in the Data Center Size:

• The real-time processing and reduced latency, are ensured by deploying micro-modular data centers near the data sources, utilizing edge computing.
• The remote operations can be performed utilizing the containerized small data centers.

The large data centers sector accounted for the largest revenue at 47.85% of the overall modular data center market share in 2023.

• Hyperscale computing, storage of large data, and processing needs can be met by utilizing large data centers.
• Moreover, they have become essential to the IT and telecom sectors, as they can easily support advanced technologies including machine learning, big data analytics, and cloud computing.
• They can expand the capacities and scalability of enterprises without any disruption to the current operations.
• In February 2023, the U.S. Department of Defense (DoD) under the Joint Warfighting Cloud Capability (JWCC) received the availability of AWS Modular Data Center. This ensures the deployment of self-contained data centers to limited infrastructure locations by the DoD, with AWS infrastructure.
• Therefore, the accommodation of vast data and implementation of advanced technologies drive the modular data center market demand.

The mid-sized data centers sector is anticipated to register the fastest CAGR during the forecast period.

• Industries such as retail and finance utilize mid-sized data centers as they offer both capacity and flexibility, ensuring an efficient flow of moderate data needs.
• They do not require any significant upfront investments, while also allowing rapid scaling to meet growing data needs, especially due to its modular design.
• Regional enterprises and colocation services majorly use these centers as they are cost-efficient and provide effective solutions.
• Their adaptability across industries and geographic regions has positioned them as a high-growth segment.
• In conclusion, the efficiency and reduction in cost boost the modular data center market trends.

By Deployment:

Based on deployment, the market is bifurcated into brownfield and greenfield.

Trends in the Deployment:

• To ensure seamless integration with public cloud providers and the security of sensitive data, hybrid cloud strategies are integrated with brownfield deployments.
• Modular data centers, ensuring sustainability and AI-based systems are used to optimize the consumption of power in greenfield deployments.

The Brownfield sector accounted for the largest revenue share in 2023.

• Already existing systems are integrated with the modular data centers in brownfield deployments, to reduce the cost and minimize disruption.
• This allows expansion of the data center capacity, especially in organizations like BSFI and healthcare, which cannot afford to halt the ongoing operations.
• Additionally, the organizations do not require the acquisition of land, since they leverage the existing infrastructure, accelerating the timelines for implementation.
• Thus, the continuity of operations and reduction in cost, enables the expansion of the market, placing the brownfield deployment as the largest segment by deployment.

The Greenfield sector is anticipated to register the fastest CAGR during the forecast period.

• Customization of data centers can be done with greenfield deployments ensuring scalability. The enterprises can ensure to meet the specifications that they need.
• This is majorly utilized for the expansion of organizations to new locations, increasing the organization's overall portfolio.
• Since tech giants are investing more in developing countries to meet data needs, greenfield deployments are increasingly being utilized.
• In January 2023, NTT announced the deployment of Liquid Immersion Cooling (LIC) and Direct Contact Liquid Cooling (DCLC) technologies, moving towards its goal of achieving green data spaces. This ensures a 30% overall increase in energy efficiency.
• As per the modular data center market analysis, the growing data and customization need to drive the greenfield deployment sector in the market.

By Industry Vertical:

Based on industry vertical, the market is segmented into IT & telecom, BFSI, healthcare, government & defense, retail, energy, and others.

Trends in the Industry Vertical:

• The integration of modular data centers with AI and blockchain applications allows faster processing of transactions and improved cybersecurity.
• In remote or conflict regions, government utilizes mobile modular data centers, to ensure secure operations.

The IT & Telecom sector accounted for the largest revenue share in 2023.

• Modular data centers are majorly used in the IT & telecom sector for cloud computing, storage, and retrieval of data and network operations.
• Scalability and decentralization of data centers have become essential with advancements in the 5G networks and edge computing.
• These data centers offer the flexibility and speed needed to meet the sector's ever-increasing data traffic and processing demands.
• In April 2023, STULZ Micro DC, a micro data center solution was launched by STULZ. It is an all-in-one, single-rack data center solution, with capabilities ranging from power protection and distribution, and cooling to monitoring and management along with fire protection and security.
• As per the segmental trends analysis, the increasing need and requirement for data centers in IT & Telecom drives the modular data center market growth.

The healthcare sector is anticipated to register the fastest CAGR during the forecast period.

• Modular data centers can handle massive amounts of data, due to healthcare institutions utilizing these data centers to handle large volumes of patient data.
• These data centers provide the necessary storage and processing capabilities to support electronic health records (EHR), telemedicine, and AI-driven diagnostic tools.
• They enhance medical tools such as electronic health records (EHR), telemedicine, and AI-based diagnostic tools, as they showcase the required processing and storage capabilities.
• Hence, the efficient handling of sensitive data and improved processing capabilities drive the modular data center market opportunities.

Regional Analysis:

The regions covered are North America, Europe, Asia Pacific, the Middle East and Africa, and Latin America.

Asia Pacific region was valued at USD 6,457.35 Million in 2023. Moreover, it is projected to grow by USD 7,506.53 Million in 2024 and reach over USD 24,628.05 Million by 2031. Out of this, China accounted for the maximum revenue share of 33.9%. As per the modular data center market analysis, due to the increasing investments in data centers, ensuring to meet the growing digital economy needs, especially in countries like China, India, and Japan. The rapid digitalization and the rising requirement for high-capacity data storage for industries like e-commerce, banking, and telecommunications, further accelerate the development.

• In January 2022, China Mobile and Huawei partnered up to complete a modular data center in six months. It deals with the influx caused by tourists using mobile data.

North America is estimated to reach over USD 31,390.48 Million by 2031 from a value of USD 8,478.89 Million in 2023 and is projected to grow by USD 9,831.61 Million in 2024.

The growth is driven by the increasing adoption of advanced technologies like cloud computing and artificial intelligence, which require scalability and flexibility of the data infrastructures. The energy efficiency and fast-paced deployments, contribute to the modular data center market expansion.

• In November 2023, JLL, Lumen, and Schneider Electric entered into a partnership to increase the delivery speed of modular data all across the U.S. This partnership ensures adaptability and scalability for modular data centers along with quick deployments.

The regional trends analysis depicts that the strict sustainability laws of Europe increase the adoption of green data centers driving the modular data center market expansion. The primary factor driving the market in the Middle East and African region is the increasing number of smart city projects and thus adoption of data centers. The increase in digital services and internet requirements, required scalability in data center solutions, accelerating the market in the Latin America region.