Modular Data Center Market will grow at highest pace owing to increasing demand for scalable and portable data centers
The modular data center market consists of prefabricated and portable buildings or containers which are designed to host IT equipment such as servers, networking, and storage infrastructure. Modular data centers features scalability, portability, energy efficiency and reduced total cost of ownership as compared to the traditionally built data centers. They offer enhanced security, lower floor space requirement, faster deployment and reduced CAPEX.
The global modular data center market size was valued at US$ 18.49 billion in 2023 and is expected to reach US$ 87.65 billion by 2030, grow at a compound annual growth rate (CAGR) of 24.9% from 2023 to 2030.
Key Takeaways
Key players operating in the modular data center market are Rittal GmbH & Co. KG, BladeRoom Group Ltd., Eaton, Cannon Technologies Ltd., Hewlett Packard Enterprise Development LP, Dell Inc., Vertiv Co., International Business Machines (IBM) Corporation, Baselayer Technology, LLC, CyrusOne Inc. Modular data centers allow scalability as per the changing needs without requiring additional raised floor or other structural upgrades. This provides an advantage over traditionally built data centers.
The global Modular Data Center Market is witnessing high growth owing to the increasing demand for portable, rapidly deployable, scalable and energy efficient data center solutions across various industry verticals. Various factors such as growing adoption of cloud-based services, big data analytics, and IoT are fueling the demand for added data center capacity.
Technological advancements in the field of modular data centers such as adoption of edge computing and incorporation of renewable energy sources are further driving the market growth. The modular designs allow for flexibility to integrate latest solutions with ease.
Market trends
The modular data center market is witnessing increasing popularity of hyper-converged infrastructure framework wherein computing, storage, networking, and virtualization resources are packaged and managed as a single system. This helps in enhancing agility, scalability and reducing deployment timelines.
There is also a trend of increasing deployment of all-electric modular data centers which rely completely on renewable energy sources and energy storage to power the IT infrastructure. This is enabling achievement of sustainability goals of data center operators.
Market Opportunities
Increasing construction of edge data centers near major cities and industrial sites to support applications with low-latency requirements like IoT and autonomous driving presents significant growth opportunities.
Growing hyperscale deployments by cloud providers and communication service providers across various regions globally will also propel the demand for modular data center solutions over the forecast period.
Impact of COVID-19 on Modular Data Center Market Growth
The Covid-19 pandemic has affected the modular data center market significantly. During the pre-Covid times, the market was growing steadily owing to the advantages of modular data centers such as scalability, flexibility, and reduced power consumption compared to brick-and-mortar facilities. However, during the pandemic, the market experienced a short term decline as the priority shifted to handling the health crisis.
The lockdowns imposed globally disrupted the supply chains and stalled new deployments. Existing modular data center operators faced operational challenges due to restricted workforce mobility. There were delays in services, maintenance activities and new projects.
However, as the pandemic intensified the load on existing data center infrastructure with the surge in remote working and online activities, there has been a renewed focus on scalable IT infrastructure. Many organizations accelerated their digital transformation plans and cloud migration strategies to ensure business continuity. This has driven increased demand for hyper-scalable, energy-efficient and quickly deployable modular data center solutions in the past year.
To tap into this demand, major modular data center players have enhanced their product & service portfolios with new capabilities around edge/on-premise deployments, workload portability and disaster recovery. They are also focusing on automated, remote operations & maintenance models. With growing infrastructure requirements of 5G, AI and IoT, the long term outlook for modular data centers remains positive given their ability to be swiftly deployed wherever and whenever additional compute capacity is needed.
Geographical Regions with Highest Modular Data Center Market Concentration
North America has traditionally been the largest and most sophisticated market for modular data centers in terms of value. This is driven by high digitalization, hyperscalers, and stringent regulations around data sovereignty in the region. The U.S. accounts for the major share within North America with states like California, Texas, New York being the hub for modular deployments.
Asia Pacific is emerging as another major market concentrated with modular data center deployments. Countries like China, India, Japan, Singapore and Australia are leading the adoption in the region given the soaring data usage, cloud migration and focus on renewable energy based facilities. The APAC market is expected to surpass North America over the coming years led by China, which is also the fastest growing regional market for modular data centers globally.
Fastest Growing Regional Market for Modular Data Centers
APAC market is expected to be the fastest growing regional market for modular data centers over the next five years surpassing all other regions. This growth can be attributed to -
- Increasing digitization initiatives across industry verticals in APAC driving the need for scalable and quickly deployable infrastructure.
- 5G deployments and IoT/AI projects requiring edge computing facilities are driving hyperlocal capacity needs.
- Government initiatives promoting sustainable development and use of clean energy are boosting the popularity of modular data centers in the region.
- Hyperscalers are extensively investing in and deploying modular facilities to support their cloud regions and edge infrastructure in high growth APAC markets.
- Uptake from colocation providers and telcos are further fueling the fast paced adoption of modular deployments in the region.
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Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc.
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