by Brianna Crandall — May 31, 2019 — Increased cost-effectiveness with the adoption of prefabricated technologies in business operations is a major factor propelling growth in the modular data center market, according to a new research report by Global Market Insights. The major cost benefits offered by IT facilities are in the areas of deployment, installation, operations and maintenance costs. These advantages allow small-scale businesses to easily deploy and maintain their business operations with reduced capital expenditure.
Large facilities incorporate modern technologies that require high operational expenses and maintenance services, points out the report. Businesses are spending large amounts of money on installing preventive maintenance solutions to predict component failures or downtime. However, modular facilities with their portable size and design do not require such costly tools to manage the system components and devices, which is another driver for modular data center demand.
The rising demand for “edge” computing in business operations will also augment modular data center market share. The businesses are dependent on IT infrastructure that is cost-effective and close to the network source, providing better data transmission speed and accuracy. Edge computing differs from a traditional data center as it brings processing power from the center of the network to the “edge” — closer to where the data is consumed by a computer, smartphone, or other device — by deploying smaller and decentralized servers.
In support of edge computing, prefabricated facilities offer several features such as ease in deployment, unique design and architecture, and portability. These modular data centers are being installed at remote locations/sites to address latency and bandwidth issues by linking to regional data centers whenever needed to improve the user experience. Such factors are driving the adoption of edge computing, fueling the modular data center market.
IT and telecom sector
Businesses operating in the information technology (IT) and telecom sector require the speedy deployment of data centers. Modular facilities are fully integrated with network connections, servers, power lines, monitoring units, fire detection units, security, storage and cooling; customers therefore don’t need to buy these additional hardware components separately and appoint an in-house technical team to install and manage them.
In consequence, the IT and telecom industry is witnessing a high adoption rate of modular data centers to improve the scalability and flexibility of its business operations. With the rapid business expansion or relocation of a business base, the enterprises are dependent on IT equipment that can be easily shifted or deployed to a new location, which is accelerating growth in the modular data center market.
In 2018, solutions accounted for over 80% of the modular data center market revenue. With the increased demand for energy-efficient operations, several manufacturers are incorporating advanced technologies into power and cooling devices. For instance, Schneider Electric SE is offering optimized cooling solutions specifically designed for prefabricated SmartShelter modules and containers. Moreover, with the rapid expansion of business operations, IT facility size is also increasing to supporting data management tasks, driving the demand for modern IT solutions. Increasing demand for data storage and applications from enterprises will drive the demand for solutions in the modular data center market over the forecast timeline.
North American market
The North America modular data center market is witnessing high growth and is expected to expand at a compound annual growth rate (CAGR) of 20% over the coming years. The region is one of the earliest adopters of the technology owing to the region’s stable economic conditions and developed infrastructure. The growing use of internet services and connected devices has led to a rise in the demand for modular data centers in the region.
In the United States, an increased adoption of these facilities for military and defense applications has also been witnessed. For example, the US Army is implementing modular data centers in other countries. In February 2019, the US Air Force announced its plans to install a prefabricated facility at British Royal Air Force’s Lakenheath base in the UK. Moreover, the growing awareness of green data centers that support green initiatives, coupled with government regulations pertaining to power efficiency, is expected to aid market growth. ANSI and other standards are imposing strict regulations for the construction and operation of green data centers.
Major companies participating in the market include Cisco Systems, IBM Corporation, Baselayer Technology, Huawei Technologies Co., Hewlett-Packard Enterprise Company, Dell, Schneider Electric SE, SGI Corporation, IO Data Centers, BladeRoom Group Ltd., Vertiv Co., Cannon Technologies Ltd., Eaton Corporation, Flexenclosure AB, CommScope, Rittal GmbH & Co. KG., and Stulz GmbH, among others.
These players are engaged in partnerships to develop innovative technologies that will improve business operations and IT performance. For instance, in June 2016, Stulz GmbH announced its partnership with Technology Space Integration (TSI) to develop a modular data center kit. This partnership will allow the company to offer a complete solution for prefabricated facilities, from high-performance computing to telecom racks and cabinets, with the integration of STULZ cooling technology.
The global modular data center market research report includes in-depth coverage of the industry, with estimates and forecast in terms of revenue in US dollars from 2015 to 2025. Browse key industry insights spread across 210 pages with 219 market data tables and 27 figures and charts from the report, Modular Data Center Market Size By Component (Solution [All-in-One, Individual], Service [Consulting, Installation & Deployment, Maintenance & Support]), By Application (BFSI, IT & Telecom, Energy, Government & Defense, Healthcare, Industrial), Industry Analysis Report, Regional Outlook (U.S., Canada, UK, Germany, France, Italy, Spain, Benelux, China, India, Japan, Singapore, Australia, Brazil, Mexico, GCC, South Africa), Growth Potential, Competitive Market Share & Forecast, 2019 – 2025, in detail, along with the table of contents.