No matter your level of involvement in the data center industry, it’s likely you’ve heard of or have some experience with modular data centers (MDCs). These prefabricated data centers have become a popular alternative to traditionally constructed options. Looking behind us, we see the incredible growth of this segment of the data center market and some impressive innovation, but what do we see when we look ahead? Here are five predictions from our experts on how the modular data center market will evolve in the next five years.
1. The modular data center market will continue to grow.
We can confidently predict that modular data centers will continue to expand in popularity. More precisely, experts project the global MDC market will grow at a compound annual growth rate (CAGR) of 18.78 percent from its value in 2024 over the following five years.
MDC growth will continue to be driven by the unique advantages these data centers offer, including scalability, reliable quality and rapid deployment. These features are especially valuable for businesses needing quick expansions or deployments in remote locations. As these use cases expand, so will the popularity of MDCs as an alternative to stick-built data centers.
2. MDCs will play a crucial role in the expansion of edge computing.
One prominent use case for modular data centers is edge computing. MDCs—particularly, all-in-one units—are an ideal option for edge computing. These self-contained units are ready for deployment in nearly any environment at the network edge. The standardized and highly efficient manufacturing process also means these units can be built and deployed much faster than traditional data centers, allowing companies to keep up with demand.
The expansion of edge computing is crucial for reducing latency for end users across the network edge and for improving the delivery of a variety of services, such as:
- Remote monitoring and analytics
- Content and media delivery
- Internet of Things (IoT) devices
All these applications and more will depend on strategically placed modular data centers to provide seamless computing and data access.
3. MDCs will incorporate more advanced technologies.
Technology never stops evolving, so the MDCs leaving the factory floor five years from now will likely be equipped with the new and improved technologies we’re striving toward today. This may include AI-driven management systems, enhanced cooling techniques and improved energy efficiency measures.
It’s difficult to predict precisely what these advanced technologies will consist of, but one thing is certain: These advancements will further optimize MDCs’ performance and operational costs, making the benefits they currently offer that much more substantial.
4. MDCs will empower companies’ sustainability goals.
As the IT world and the world at large focus more and more on going green, we expect to see modular data centers reflect this emphasis. Over the next five years, we’re likely to see new regulations and best practices crop up around environmental issues, and these will inform the MDCs of tomorrow.
MDCs will become more sustainable in these two main ways:
- MDC manufacturers will incorporate more sustainable manufacturing practices and materials into the MDC build process.
- All parts of the MDC value chain will work together to equip MDCs with more energy-efficient systems.
We also expect to see companies leveraging the existing advantages of MDCs—which are inherently more efficient than large, stick-built facilities—to meet their sustainability goals.
5. The applications for MDCs will continue to expand.
Modular data centers hold mass appeal for a wide variety of use cases. However, the market for modular data centers may be segmented further into specific use cases (such as disaster recovery, temporary deployments and permanent installations) and by industry. Each segment will have tailored solutions that optimize performance and operational efficiency. Note that this level of customization is already possible with vendors like PCX who can tailor the end product to the customer’s exact specifications.
Whether or not we see more tailored solutions by use case and industry, we expect to see the applications for MDCs expand due to growing awareness around the versatility of this product.
The Next Chapter for the Modular Data Center Market
Looking ahead, the modular data center market is poised for transformative growth driven by its inherent advantages over traditional construction. Larger trends such as edge computing, technological advancements and sustainability will shape the next chapter of MDCs. Additionally, their inherent adaptability will enable MDCs to be used in a variety of contexts, cementing their well-earned position of prominence in future data infrastructure.
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