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2021

Modular Data Center Market

Modular Data Center Market Size, Share, Competitive Landscape and Trend Analysis Report by Component (Solution (All-in-one and Individual) and Services (Consulting, Deployment, and Support & Maintenance)), Enterprise Size (Small & Medium Enterprises and Large Enterprises), Industry Vertical (BFSI, IT & Telecom, Retail, Manufacturing, Healthcare, Energy, Media & Entertainment, Government, and Others): Global Opportunity Analysis and Industry Forecast, 2020-2027

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Author's: Vikas Gaikwad & Rachita Rake | Vineet Kumar
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Modular Data Center Market Statistics: 2027

The global modular data center market size was valued at $14,952 million in 2019, and is projected to reach $59,971 million by 2027, registering a CAGR of 18.7% from 2020 to 2027. Modular data center is an effective alternative to the traditional brick and mortar data centers, as it is a portable system that can be conveniently stationed anywhere to support customers’ existing data center, or it can be integrated into a system of modules. These data centers consist of all the standard components such as power, IT, cooling, fire protection, and access control elements. In addition, these modular solutions facilitate energy efficiency, as they consume less power compared to traditional data centers.

On the basis of component, the solution segment exhibited the highest growth in 2019, and is expected to maintain its dominance in the upcoming years, due to increase in adoption of modular data center solutions and advantages associated with modular data center such as enhanced energy efficiency, mobility, speed & agility, and scalability, in comparison with traditional data center solutions.  However, the services segment is expected to witness highest growth, as there has been an extensive adoption of deployment and integration services among end users for ensuring effective functioning of modular data center solution throughout the process.

Modular-Data-Center-Market-2020-2027

By enterprise size, the global modular data center market share was dominated by the large enterprises segment in 2019, and is expected to maintain its dominance in the upcoming years. This is attributed to the fact that various issues are associated with higher carbon footprint and higher power consumption in large enterprises, which propel the demand for modular data center solutions. However, the small & medium enterprises segment is expected to witness the highest growth, owing to the elimination of the need for specialized support skillsets along with the benefits such as the manpower & administration savings, real estate savings, and lower power utilization efficiency (PUE). 

North America dominates the modular data center market share, owing to huge presence of leading modular data center providers and the flourishing IT & telecom industry. In addition, surge in investments by key players as well as government for developing the innovative prefabricated data center fuels growth of the market. For instance, in February 2018, EdgeCore Internet Real Estate announced the plans to invest $2 billion in the North American data center market. However, Asia-Pacific is expected to exhibit highest growth rate during the modular data center market forecast period, owing to the factors such as extensive development of 5G network infrastructure in the region and rise in number of start-ups as well as small- & medium-sized enterprises (SMEs) in the developing economies such as India, China, and South Korea.

The report focuses on the growth prospects, restraints, and modular data center market analysis. The study provides Porter’s five forces analysis of the modular data center industry to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the modular data center market trends.

Segment review

The modular data center market is segmented on the basis of component, enterprise size, industry vertical, and region. Depending on component, the market is bifurcated into solution and services. On the basis of enterprise size, it is classified into small & medium enterprises and large enterprises. By industry vertical, it is classified into BFSI, IT & telecom, retail, manufacturing, healthcare, energy, media & entertainment, government, and others. Region wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Modular Data Center Market
By Component
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Services is projected as one of the most lucrative segments.

COVID impact analysis

Post COVID-19, the size of the modular data center market is estimated to grow from $18,084 million in 2020 and projected to reach $59,971 million by 2027, at a CAGR of 18.7%. The current estimation of 2027 is projected to be higher than pre COVID-19 estimates. The COVID-19 outbreak has low impact on the growth of the modular data center market. The spread of COVID-19 has considerably augmented data traffic. In addition, upsurge in storage volume requirement due to the pandemic driven by proliferation of emerging technologies such as artificial intelligence (AI), big data, and Internet of things (IoT). This will continue to drive the modular data center investments across the globe. 

The industry players such as Amazon, Google, Facebook, and Microsoft continue to lead spending on data centers, followed by Alibaba, Apple, and Tencent. For instance, in April 2020, Alibaba Cloud announced to invest $28.2 billion in cloud infrastructure as well as the construction of advanced data centers in upcoming three years. Such investments significantly fuel the growth of the modular data center market.

Modular Data Center Market
By Organization Size
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Small & medium enterprises segment is projected as one of the most lucrative segments.

Top impacting factors    

The growth of the global modular data center market is driven by increase in demand for rapidly deployable & scalable data centers. In addition, various factors such as upsurge in adoption of cloud services by small & medium size enterprises (SMEs), rise in demand for green data centers, and increase in demand for energy-efficient data centers fuel the growth of the market. Moreover, rise in investments to develop advanced data centers during the COVID-19 pandemic considerably propelled the growth of the modular data center market. However, challenges associated with transportation of the modular data center and vendor lock-in hamper growth of the market. On the contrary, surge in demand for modular data centers by colocation providers and emergence of fourth generation of data centers are expected to provide lucrative growth opportunities for the expansion of the market during the forecast period.

Increase in demand for rapidly deployable & scalable data centers 

The emergence of fourth industrial revolution, big data analytics, and the Internet of Things demands for flexible IT resources. In addition, rise in penetration of cloud computing and rapid digitalization have led to a steady growth of the data center industry. In addition, implementation of work-from-home policy and rise in trend of remote working culture drive the demand for modular data centers. This has led to increased focus on speed to market and the ability to deploy data center capacity efficiently and rapidly. Moreover, the modular approaches to build medium- or large-scale data centers offer both the speed to deploy as well as the quality of construction along with ease of operation. Hence, the demand for rapidly deployable & scalable data centers augments the modular data center market growth.

Modular Data Center Market
By Industry Vertical
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Healthcare industry is one of the most significant segments.

Upsurge in adoption of cloud services by SMEs 

Cloud computing has become an emerging technology over the last few years that has abolished the burden of purchasing licensed software and heavy hardware, which is more advantageous to SMEs. The adoption of cloud services in SMEs is increasing rapidly, as it enables such enterprises to concentrate on their essential business events, and thus improves efficiency.

Moreover, the adoption of cloud services has offered SMEs with the benefits such as unlimited computing power, lower IT expenditure, easy access of data & applications, and competitive advantage. Modular data centers are designed to deal with changes in servers such as cloud computing and virtualization. In addition, rise in demand for cloud computing has led to the emergence of innovative modular data center for SMEs, which fuels growth of the market. For instance, in November 2020, Microsoft launched a new Azure in a shipping container service called Azure Modular Datacenter. It offers an option for setting up an Azure datacenter in challenging or hybrid environments where previously cloud computing would not have been possible.

Modular Data Center Market
By Region
2027
North America 
Europe
Asia-Pacific
LAMEA

Asia-Pacific region is projected as one of the most significant segments.

Key Benefits For Stakeholders

  • This study includes the modular data center market analysis, trends, and future estimations to determine the imminent investment pockets.
  • The report presents information related to key drivers, restraints, and modular data center market opportunity.
  • The modular data center market size is quantitatively analyzed from 2019 to 2027 to highlight the financial competency of the industry.
  • Porter’s five forces analysis illustrates the potency of buyers & suppliers in modular data center market.

Modular Data Center Market Report Highlights

Aspects Details
Modular Data Center Market By Component
By Component
  • Solution
  • Services
Modular Data Center Market By ORGANIZATION SIZE
By ORGANIZATION SIZE
  • Large Enterprises
  • Small & Medium Enterprises
Modular Data Center Market By Industry Vertical
By Industry Vertical
  • BFSI
  • IT & Telecom
  • Retail
  • Manufacturing
  • Healthcare
  • Energy
  • Media & Entertainment
  • Government
  • Others
Modular Data Center Market By Region
By Region
  • North America  (U.S., Canada)
  • Europe  (UK, Germany, France, Russia, Rest of Europe)
  • Asia-Pacific  (China, India, Japan, Australia, Rest of Asia-Pacific)
  • LAMEA  (Latin America, Middle East, Africa)
Key Market Players
Key Market Players

Huawei Technologies Co. Ltd., Schneider Electric., .Dell Inc., Eaton, Rittal GmbH., BaseLayer Technology LLC, Hewlett Packard Enterprise Company., CommScope Inc., IBM Corporation, Vertive Group Corporation.

Analyst Review

The data center industry is witnessing enormous transformation. The industry is undergoing a paradigm shift in adoption of modular data center as a portable solution for deployment of data processing capacity. As energy consumption and costs are continuing to rise, businesses are being challenged by rising demand for more efficient data center solutions. Traditional data centers are no longer compatible with industry growth, considering the large capital investments as well as complex logistics required for upscaling. As a result of this, modular power construction has become an emerging construction method for data center upscaling to allow businesses to respond to unprecedented surges in industry growth in an efficient way.

Moreover, due to the utilization of integrated hardware in modular data centers, it eradicates the need for specialized support skillsets. In addition, it consists of management software that enables remote administration and management. Moreover, it features integration with popular data center infrastructure management (DCIM) suites. This ensures administration and manpower savings, thereby fueling the demand
for modular data center solutions.

Furthermore, massive volume of data created by the adaptation of emerging data-driven technologies such as artificial intelligence (AI) and Internet of Things (IoT) has increased the power, computing, cooling, and networking demands of the data center for storage, data transfer, and big data analysis. In addition to this, ongoing advancements in the field of modular data center provides lucrative growth opportunities for the market growth. For instance, in October 2020, Huawei Technologies launched its next-generation Smart Modular Data Center 5.0.  This solution uses AI to build next-level data center intelligence, enabling the full use of SmartLi, the proprietary smart lithium battery to implement full lithium battery backup.

The modular data center market is competitive and comprises a number of regional and global vendors competing based on factors such as cost of solutions & services, reliability, quality of the product, and support services. The market is concentrated with major players consuming 50–60% of the share. The degree of concentration will remain the same during the forecast period. Owing to the competition, vendors operating in the market are offering advanced modular data center solutions to improve the marketing strategies of enterprises. On the other hand, the growing investment trend of companies across the several industries in modular data centers fuels the market growth. In addition, key players are heavily investing in R&D activities to develop effective modular data center technology and services offerings, which is opportunistic for the market.

Author Name(s) : Vikas Gaikwad & Rachita Rake | Vineet Kumar

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Modular Data Center Market

Global Opportunity Analysis and Industry Forecast, 2020-2027