The market for Modular Data Center is forecast to reach $71.3 billion by 2025, growing at a CAGR of 26.8% from 2020 to 2025. Modular data center solution units make IT infrastructure physically simpler to construct. The modular solution may be aimed at the level of the data center or at a more granular level. When companies move towards implementing more centralized technology based on the cloud, modular architecture will accommodate additional workload to meet business demands. The demand is driven by the versatility and scalability of modular data centres. Modular data center mobility allows clients to move their data centers, rather than demolish them and install a new one at a different location.
Component - Segment Analysis
By components, the integration and deployment services segment is expected to witness significant growth of around 31.6% during the forecast period 2020 – 2025. Installation and deployment services help small as well as large organizations in deployment of reliable data center solutions in a cost-effective manner. Integration and deployment services facilitate rapid assembling, integration, deployment and commissioning of the modular data center which is further driving the market. According to Cloudscene, there are 2517 data centers in the United States, 253 data centers in Canada and 2,252 service providers in the United States with 60 network fabrics in 2020. Also, according to a report by CBRE, the total capacity of United States primary data center markets grew by 200 megawatts (MW) or 8% in H1 2019. Developments such as these are boosting the deployment of modular data centers during the forecast period 2020 – 2025.
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End User - Segment Analysis
The Modular Data Center Market is broadly classified by end user environment into IT & Telecom, Government & Defense, Healthcare, Education, Retail, Energy, Manufacturing and Others. Among these, IT & Telecom segment held the major share accounting for around 24% in 2019. The telecom providers, to optimize their networks and the digital services running on them, are going to need more compute and storage capacity to be deployed across carrier networks. Moreover, the growing 4G penetration and the upcoming 5G wave will further inspire telecom providers to invest more network flexibility in the integrated data center industry and a much greater capacity to handle networks in spite of high data traffic. As carriers may benefit from improving network infrastructure, edge computing has become virtually a standard practice in the telecom industry. It is expected that the telecom companies will deploy micro modular data centers along with 5G cell towers to provide improved network coverage across industries.
Geography - Segment Analysis
The Modular Data Center Market is segmented across five regions, namely, North America, Asia Pacific (APAC), Europe, Middle East and Africa (MEA), and Latin America. North America accounted for the largest share of the overall Modular Data Center Market in 2019 of around 37%. The growth of mobile broadband, an increase in big data analytics, and cloud computing are driving the demand for new data center infrastructure in the region. North America region comprises a considerable amount of data centers, and many enterprises are switching from hardware to software-based services. Also, this region is predicted to be an addressable market for data center installations. U.S. is expanding its capacity with more than 411 MW, which is currently under construction. The primary United States wholesale data center markets recorded a combined 171 MW of net absorption in H1 2019, which is more than 56% of the 2018 full-year record. Furthermore, in October 2019, the United States Army has planned to invest USD 1 billion in cloud and data modernization over the next five years. It wants to deploy two modular data centers in Iraq with Schneider Electric's prefabricated modular data center range called a Smart Shelter Container. It will be responsible for voice, video, data, and infrastructure systems within the Ministry of Defense- Iraq areas of responsibility.
Drivers – Modular Data Center Market
Portability and scalability requirements
Because of their modularity, modular data centers are easily scalable and provide an easy way to add and remove data center components. In addition, these data centers are conveniently portable, as opposed to the rigidly built conventional data centers, which further contribute to their wide adoption in SMEs. The portable nature of these data centers, coupled with the small size, provides an attractive offering to mobile network providers, who utilize distributed data centers as a platform to run the Network Function Virtualization (NFV). Individual data center modules can be easily removed from one site and setup at another remote location. Modular data centers provide the means for the IT space, and cooling and power capabilities within the data center itself. Additionally, such data centers comprise components with a standardized design that allows for rapid construction and deployment and are more economical to build than the traditional data centers. Portability and scalability benefits offered by modular data centers have helped in propelling the demand for these solutions across most of the organization sizes.
Deployments in disaster-prone areas
Recovery from disasters is a significant concern of data center users worldwide. Since they can be installed in areas where conventional data centers cannot be installed, modular data centers are a cost-effective option for disaster recovery. Modular data centers can act as a temporary data center in situations where the main data center has been affected by natural calamities or other disasters. Additionally, modular data centers can be deployed in environments where the expertise to build a data center is not available or when a data center is required temporarily. These benefits are making modular data centers an attractive option in the disaster recovery strategy of the organization.
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Challenges – Modular Data Center Market
Rise in HVAC needs
Modular data centers have become increasingly efficient in recent years, and are commonly used for the requirements of enterprise data. Nowadays, modular data centers can accommodate densities of 20–30 kW or higher and end up producing high heat rates per square foot. The high heat levels created by the modular data center systems pressurize the total resources expended on heating, ventilation, and air conditioning (HVAC) systems and services, which further raises data center costs. High rates of heat density force organizations to extend their cooling network and increasing their air-conditioning power. In spite of this increased air conditioning, it is challenging to avoid the temporary failure of the data center due to overheating. These complications involved in managing the heat levels inside modular data centers may hinder the growth of the global modular data center market over the forecast period.
Market Landscape
Product launches, acquisitions, and R&D activities are key strategies adopted by players in the Modular Data Center Market. Modular Data Center market is expected to be dominated by major companies such as Baselayer Technology, LLC, BladeRoom Group Ltd., Cisco Systems, Inc., CommScope, Inc., Dell, Inc., Eaton Corporation, Huawei Technologies Co., Ltd., IBM Corporation, Iron Mountain Corporation, LLC, Rahi Systems, Rittal GmbH & Co., KG, Schneider Electric SE, SGI Corporation, Stulz GmbH, The Hewlett-Packard Company, Vertiv Co., and ZTE Corporation among others.
Acquisitions/Technology Launches/Partnerships
In December 2019, Amazon Web Services and Verizon announced a partnership called 5G edge cloud computing to help build new applications, IoT-empowered capabilities, and net-new value innovations. Verizon would be offering secure connections to AWS’s nearby cloud data centers (edge gateways), so one can tie in its compute and storage services through its 5G network.
In May 2020, Schneider Electric planned to work in collaboration with Sydney-based Leading-Edge Data Centers on a USD 30 million projects to ‘upgrade’ Australia’s digital economy and keep data on home soil. The company will provide Tier-3-designed, standardized, pre-assembled and fully integrated data center modules, designed to boost Leading Edge’s presence in six sites across New South Wales.
In October 2019, ABB enabled smarter data center solution for North Carolina-based GIGA data center that aims to make modular data center technology available to every company to maximize scalability while achieving an ultra-low Power Usage Effectiveness (PUE) rating.
Key Takeaways
North America has shown remarkable growth in data center infrastructure solutions attributed to the growth of mobile broadband, an increase in big data analytics and cloud computing leading to new data center infrastructures.
One of the major driving factors for the Modular Data Center Market is its portability. Because of their modularity, modular data centers are easily scalable and provide an easy way to add and remove data center components.
The complications involved in managing the heat levels inside modular data centers may hinder the growth of the global modular data center market
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