From the Lab

Modular Data Center Market Running Fast

16781769174_da9509931a_oThe modular data center market is expected to grow at a fast clip. Estimates for absolute market values vary, but the reasons for growth seem clear.

In a mid-2015 report, research firm Markets and Markets has predicted that the modular data center market will grow at a compound annual growth rate (CAGR) of 33.2 percent from 2015 to 2020. Another analyst firm has also predicted very fast modular growth rates. According to 451 Research, the market will experience a four-fold increase between 2013 and 2018.

Despite similar growth projections, the two firms have widely divergent views on absolute numbers. Markets and Markets expects a market value of $35 billion in 2020; whereas 451 Research sees it growing to from a much lower base to $4 billion by 2018.

Whether that divergence is explained by separate definitions or unique methodologies or something else is a question for another day. What’s driving the underlying growth has a more ready explanation.

In a recent quarterly survey, 451 Research asked enterprises what happens when they have exhausted their data center capacity. By far, the top answer was “consolidate IT infrastructure to accommodate power and/or space availability.” The next two responses involved using off-premise cloud services or renting space at a colocation provider. Building a new data center was the fourth response, with buying a new one coming in at a distant fifth.

Modular data center technology is applicable across this range of scenarios. In the case of consolidating or retrofitting existing infrastructure, enterprises can readily deploy IT, power, cooling or generator modules. If using third-party cloud or colocation services, they may be tapping into modular designs that those providers have already implemented. If they opt to build or buy a new data center, they are likely to incorporate modular components and architecture, given that their benefits now are so well recognized, especially in the massive facilities integral to many of today’s web-scale companies.

Prefabricated modular data center components have certainly been a part of the Keystone NAP vision from the start. As we have noted in an earlier post, their versatility, density and efficiency remain key to our future.