Modular Data Center Market - By Component (Solution, Services), By Application (BFSI, IT & Telecom, Energy, Government, Healthcare, Industrial) & Forecast, 2024 - 2032

Modular Data Center Market Size

Modular Data Center Market was valued at USD 18.8 billion in 2023 and is estimated to register a CAGR of over 16.9% between 2024 and 2032. The market growth is driven by the growing demand for scalable and cost-effective data center facilities.
 

Modular data centers tend to be more affordable than conventional brick-and-mortar data centers. They generally require lower initial capital expenditure as organizations can invest in modules incrementally. Additionally, modular solutions can lead to reduced operational costs due to their efficient designs, which optimize power usage and cooling, resulting in lower energy bills. For instance, in March 2024, Eaton launched its new SmartRack modular data center solution, designed to meet the increasing demand for edge computing, machine learning, and artificial intelligence. This innovative offering allows organizations to deploy data centers quickly and efficiently, with a focus on reducing development cycles and costs.
 

In addition, energy efficiency is a major consideration in the construction of many modular data centers. By integrating cutting-edge cooling technologies and energy management systems, they can assist businesses in lowering operating expenses and achieving their sustainability objectives. The energy-efficient modular data center detighten, becoming increasingly viable as environmental rules tighten and energy prices keep rising.
 

The modular data center market is facing several restraints due to factors such as challenges in high-performance computing. Many HPC applications rely on specific hardware setups and networking options, which can prove difficult to integrate into a modular data center architecture. The inability to seamlessly integrate specialized computing hardware or proprietary networking solutions can deter HPC users from adopting modular designs. Also, while modular data centers offer flexibility, they may not provide the same level of customization as traditional data centers built specifically for HPC. Organizations with specific computing requirements can find it difficult to modify a modular system to meet their needs, making them favor custom facilities.
 

Modular Data Center Market Trends

The modular data center industry is experiencing a shift toward the adoption of sustainable solutions by adopting eco-friendly materials and practices due to the growing awareness and stringent regulations regarding environmental safety. Sustainable facilities often utilize energy-saving technologies to reduce energy usage, such as enhanced cooling systems, LED lighting, and effective power distribution units. Further, many companies are concentrating on adopting renewable energy sources, such as wind or solar energy, to connect data center operations with sustainability objectives. For instance, in May 2024, EdgeCloudLink (ECL) successfully delivered its first hydrogen-powered modular data center in Mountain View, California, marking a significant milestone in sustainable data center solutions. This innovative facility is designed to operate off-grid, utilizing hydrogen fuel cells for power generation.
 

Additionally, as businesses adopt edge computing to support IoT devices and low-latency applications, modular data centers are increasingly being deployed at the edge. This trend is driven by the need for localized data processing and storage, lowering latency and enabling enterprises to react swiftly to data demands.
 

Modular Data Center Market Analysis

Based on component, the market is divided into solutions and services. In 2023, the solutions segment accounted for a market share of over 79%. It includes turnkey, all-in-one modular data centers that provide power, cooling, and IT equipment as part of a comprehensive infrastructure package in a single unit. This integrated approach reduces the need for assembling and integrating individual components from several manufacturers, thus simplifying the deployment process. It streamlines implementation and procurement, making it a practical choice for companies seeking a hassle-free deployment process. For instance, in September 2022, Schneider Electric launched EcoStruxure Modular Data Center All-in-One solutions, designed to provide a comprehensive and flexible approach to deploying data centers. These prefabricated modular offerings aimed to simplify the process of building and scaling data center infrastructure. The solutions combined power, cooling, racks, and management systems into a single, pre-engineered module.
 

Based on application, the modular data center market is categorized into BFSI, IT & telecom, energy, government, healthcare, industrial, and others. The BFSI segment is expected to hold over USD 21.2 billion by 2032. The financial sector is undergoing a significant digital transition, with a growing emphasis on AI, big data analytics, cloud computing, and customer-focused services. Modular data centers provide the infrastructure required to support these projects, allowing businesses to effectively implement cutting-edge services and technology. The flexibility of modular solutions allows BFSI companies to test new technologies without having to make significant financial commitments. For instance, in August 2024, Vertiv launched the Vertiv MegaMod CoolChip, a high-density prefabricated modular data center solution designed to accelerate the global deployment of AI computer infrastructure. This launch positioned Vertiv as a leader in providing high-density, rapidly deployable modular data center solutions tailored for AI workloads. It addresses the growing demand for AI-ready capacity by delivering a turnkey, factory-integrated offering that simplifies the process for customers.
 

In 2023, North America dominated the modular data center market with around 38% of the market share. The demand for modular data centers in the region is experiencing significant growth due to a combination of technological, economic, and regulatory factors. The growing usage of big data, IoT devices, and cloud computing has led to an unprecedented increase in data generation and consumption. This has resulted in businesses across various sectors demanding an effective system to effectively manage and analyze enormous volumes of data. Modular data centers offer the flexibility and scalability required to meet this increasing demand for data without requiring a substantial initial investment in permanent infrastructure.
 

Additionally, energy efficiency is becoming a greater concern for businesses, particularly in North America where corporate sustainability objectives and regulatory restrictions are becoming more prevalent. Modular data centers often employ advanced cooling technology and eco-friendly designs that support environmental campaigns. For instance, in February 2023, Amazon Web Services (AWS) launched its modular data center solution, specifically designed for the U.S. Department of Defense (DoD) as part of the Joint Warfighting Cloud Capability (JWCC) contract. This new offering aims to facilitate the rapid deployment of cloud services in challenging environments. The modular data center further supports low-latency applications, making it suitable for military operations that demand quick access to data and cloud capabilities in the field.
 

In Europe, organizations are increasingly embracing digital transformation to boost innovation, improve consumer experiences, and increase operational efficiency. The infrastructure required to support these projects is provided by modular data centers, enabling companies to implement cutting-edge technologies such as cloud computing, big data analytics, and artificial intelligence. The region has robust data protection regulations, such as the General Data Protection Regulation (GDPR), that require organizations to handle data responsibly. Modular data centers are designed to meet these legal requirements, thus ensuring companies safeguard confidential data and remain compliant.
 

Further, the Asia Pacific region is experiencing significant urbanization, with millions moving to cities. This trend is increasing the need for data processing and storage capacity as metropolitan areas need better infrastructure to enable digital services and economic activity. Modular data centers can be swiftly implemented in urban environments to meet this increasing need. Also, rapid economic growth in countries, such as China, India, and other Southeast Asian nations, is driving the demand for IT infrastructure. As businesses expand and digital services proliferate, there is a growing demand for scalable data center solutions, which modular facilities can seamlessly offer.
 

Modular Data Center Market Share

Hewlett-Packard Enterprises and Huawei Technologies Co. Ltd. dominate the market with over 10% of the market share in 2023. HPE offers modular solutions designed for hybrid cloud settings, including the HPE Modular Data Center and HPE Edge Solutions. As HPE's modular solutions are built to maximize performance, businesses can effectively handle a variety of workloads. These solutions integrate easily with existing IT environments and cloud services, allowing for flexible resource management.
 

The market for modular data centers is dynamic and evolving rapidly with both long-standing competitors and new entrants. The market is growing due to significant trends such as rising data demands, cloud technology adoption, and an emphasis on sustainability. The market is expected to grow further as businesses seek more scalable, affordable, and adaptable solutions to satisfy their IT infrastructure requirements.
 

Modular Data Center Market Companies

Major players operating in the market are:

• Hewlett-Packard Enterprises Development LP
• Huawei Technologies Co. Ltd.
• Schneider Electric SE
• Dell Inc.
• IBM Corporation
• Cisco Systems Inc.
• Eaton Corporation
• ZTE Corporation
• Cancom SE
• CommScope Inc.
   

Modular Data Center Industry News

• In May 2024, Sonic Edge partnered with Iceotope to launch the Iceotope AI Pods, a new offering in the market specifically designed for high-performance AI applications. This collaboration aimed to address the growing demand for rapid deployment of AI-ready infrastructure. The AI Pods are multi-tenant micro data centers with a footprint of 12m by 4m and a power capacity of up to 450 kW, making them suitable for various AI workloads.
   
• In March 2024, Nautilus Data Technologies launched a new modular data center offering known as EcoCore, which was designed to enhance prefabrication efficiency and streamline the construction process. This innovative product line is based on the cooling technology that Nautilus developed for its own data centers.
   

The modular data center market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2021 to 2032, for the following segments:

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Market, By Component

• Solution
  • All-in-one
  • Individual
• Services
  • Consulting
  • Installation & Deployment
  • Maintenance & Support

Market, By Application

• BFSI
• IT & Telecom
• Energy
• Government
• Healthcare
• Industrial
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Benelux
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • Singapore
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America 
• MEA
  • GCC
  • South Africa
  • Rest of MEA