Modular Data Center Market Growth Accelerated by AI – Omdia

This article originally appeared in the Omdia blog.

New Omdia research reveals that the market for prefabricated modular and micro data centers will reach $11.7 billion by 2027, with growth peaking in 2023 and 2024, fueled by the need to speed-up data center builds in the wake of the AI boom.

The prefabricated modular data centers (PMDC) market comprises single and multi-module structures that can have one function (e.g. power, cooling) or all data center functions (e.g. all-in-one). Omdia expects $8.6bn of PMDC sales in 2027.

The largest category in the market, prefabricated power modules, grew the fastest among all module types tracked by Omdia as it enabled both new data center builds and the expansion of existing data centers’ power capacity.

Micro-modular data centers (micro-DCs) comprise single and multi-module designs, which are shipped pre-integrated by the supplier. Omdia expects $3.1 billion of micro-modular DC sales in 2027.

“Micro-DCs are appealing to both cloud service providers and enterprises” highlighted Vlad Galabov, cloud and data center research director at Omdia. “Hyperscale cloud service providers were early adopters of multi-rack micro-DCs. Offsite pre-integration sped up on-site installation.

“Following my recent visit to a Tencent data center in Tianjin, China in 2018, the teams had already deployed multi-rack micro-DCs at scale and were eager to share learnings on their intentions to increase their use of PMDC and micro-DC solutions in the future.”

Related:Modular Data Centers: When They Work, and When They Don't

Huawei is the leader in the global PMDC market, followed by Schneider Electric and Vertiv. Johnson Controls, Schneider Electric, and MC Dean are the three largest vendors in North America. Vertiv and Rittal are the two largest vendors in Western Europe, while Huawei is the largest vendor in Asia and Oceania and the rest of EMEA.

The micro-DC market is significantly more diverse due to its lower barriers of entry. Huawei is the market leader though Vertiv and DTCT follow close behind.  

“We expect PMDC and micro-DC innovation to continue, with a focus on high power density to support highly configured servers optimized for AI workloads,” highlighted Siraj Aziz, the analyst leading Omdia’s PMDC and micro-DC research. “Integration of liquid cooling and batteries are two key innovation areas we anticipate.”