Modular Data Center Market Size (2025 – 2030)

The Modular Data Center Market was valued at USD 29.93 billion in 2024 and is projected to reach a formidable market size of USD 79.79 billion by the end of 2030. Over the forecast period of 2025-2030, the market is projected to expand at a robust CAGR of 17.7%.

The global modular data center market is currently undergoing a profound and accelerated transformation, marking a definitive shift away from the protracted, high-capital, and inflexible nature of traditional "stick-built" data center construction. This market represents a paradigm shift in digital infrastructure deployment, championing an agile, prefabricated, and scalable approach. At its core, a modular data center is a self-contained, containerized system that incorporates all the essential components of a traditional data center—including IT racks, power, cooling, security, and fire suppression—into standardized, factory-built modules. These modules are then transported to the desired location, where they can be rapidly deployed, commissioned, and made operational, often in a fraction of the time required for conventional builds. This market is no longer a niche solution for temporary or remote needs; it is rapidly becoming the mainstream strategy for enterprises, colocation providers, and hyperscalers seeking to navigate an increasingly volatile and data-intensive landscape. The core value proposition is one of unprecedented agility. In an era defined by the exponential data generation from 5G, the Internet of Things (IoT), and the sudden, massive computational demands of Generative AI, the ability to deploy new compute capacity in months, rather than years, has become a critical competitive differentiator. This "just-in-time" infrastructure model allows organizations to precisely match their capital expenditure with their immediate capacity requirements, eliminating the costly over-provisioning that plagued traditional data center projects. The current market scenario in 2024 is characterized by intense innovation, driven primarily by two powerful and parallel forces: the rise of Artificial Intelligence (AI) and the imperative of edge computing. The computational density required to train large language models (LLMs) and run AI inference workloads generates extreme heat, rendering traditional air-cooling methods obsolete. This has created a surge in demand for specialized, high-density modular solutions that come pre-integrated with advanced liquid-cooling or direct-to-chip cooling systems. These modules are purpose-built to handle the thermal load of next-generation GPUs and CPUs, making them the default choice for AI-specific deployments.

Key Market Insights:

• According to McKinsey & Company, surveys of data-centre stakeholders show that prefabricated and modular solutions account for 40 % to 60 % of a data centre’s individual parts on average, with some industry-leaders reaching 80 %-85 % modularization in their designs.
• In 2024, modular data center deployments are consistently achieving up to 50% faster time-to-market compared to traditional construction. This agility has become a critical business driver, allowing companies to respond to sudden demands for AI compute or new market entries in as little as six months, versus the 18-24 months typical for conventional builds.
• A 2024 analysis of new data center projects revealed that approximately 55% of builds utilizing factory-built modules reported significant and immediate cost benefits. These savings are primarily derived from reduced on-site construction labor, minimized weather delays, and the high degree of predictability in factory-controlled manufacturing processes.
• Reflecting the AI boom, a key trend in 2024 is the surge in demand for high-density modules. Vendors are actively marketing and deploying solutions capable of supporting up to 200 kW per rack, a density that is nearly impossible to manage with traditional air cooling and is specifically designed for GPU-intensive AI and HPC workloads.
• The engineering efficiency of modular designs is enabling organizations to achieve significant physical compression. In 2024, businesses deploying modular solutions are reporting a reduction in their overall data center footprint by as much as 40% compared to the space required for a traditional facility with the same compute capacity, freeing up valuable real estate.
• The modular edge data center market, a sub-segment of the total, is valued at USD 3.18 billion in 2024. This specific and rapid growth underscores the market's decentralization, as enterprises aggressively push compute power to remote locations to service IoT devices and low-latency applications, a task for which modular designs are perfectly suited.
• In 2024, large enterprises (organizations with over 1,000 employees) remain the dominant customer base. This segment holds the largest share of the market, leveraging modular solutions for large-scale capacity expansion, hyperscale build-outs, and major disaster recovery site implementations.

Market Drivers:

The modular data center market is being supercharged by the seismic technological shifts of Artificial Intelligence (AI) and 5G.

Training large language models (LLMs) and running AI inference tasks require compute density that generates immense thermal loads, pushing legacy data centers to their breaking point. Modular, liquid-cooled solutions are purpose-built to handle these 200 kW+ rack densities, making them the default choice for AI pods. Simultaneously, the 5G rollout is fueling a data explosion at the network edge. This requires a new architecture of low-latency "edge data centers," and modular designs are the only feasible way to deploy this processing power rapidly and cost-effectively at thousands of new locations, such as 5G tower bases.

In today's digital economy, speed is a non-negotiable currency.

Traditional "stick-built" data centers can take 18-24 months to design and construct, a timeline that is unacceptably slow for businesses needing to respond to a sudden surge in demand or a new market opportunity. Modular data centers shatter this limitation, reducing deployment timelines by up to 50%. This "just-in-time" infrastructure model allows organizations to deploy capacity in predictable, pre-engineered blocks, scaling their investment precisely in line with their growth. This eliminates the massive upfront capital risk of over-provisioning and allows businesses to get compute resources online in months, not years.

Market Restraints and Challenges:

The primary restraint facing the market is the logistical and transportational complexity of the modules themselves. These are not small components; they are large, extremely heavy, factory-finished structures. Moving these modules from the factory to the final site, especially in dense urban areas or remote locations, requires specialized heavy-haul logistics, road permits, and crane operations. This process can be costly and introduces significant "last-mile" risks. Furthermore, there is the challenge of integrating these new, standardized modules with an organization's existing, often decades-old, legacy data center infrastructure, which can create operational and management software-level incompatibilities.

Market Opportunities:

A significant and largely untapped opportunity lies in the data center retrofit market. A vast number of aging, inefficient data centers exist globally. Instead of a complete "rip-and-replace," companies can use modular solutions for targeted upgrades—for instance, deploying a modular high-density liquid-cooling pod to handle a new AI workload within their existing facility. Another major opportunity is the development of purpose-built, application-specific modules. As the market matures, vendors are moving beyond generic solutions to offer modules optimized for specific industries (e.g., healthcare-compliant HIPAA modules) or workloads (e.g., AI-as-a-Service liquid-cooled modules).

MODULAR DATA CENTER MARKET REPORT COVERAGE:

Modular Data Center Market Segmentation:

Modular Data Center Market Segmentation by Component:

• Solution
  • All-in-One Modules
  • Individual Modules (IT, Power, Cooling)
• Service
  • Design & Consulting
  • Integration & Deployment
  • Support & Maintenance

The Solution segment is the most dominant, commanding over 80% of the market in 2024. This is because the core of the market is the purchase of the physical, prefabricated hardware itself. Organizations are investing heavily in these pre-engineered, factory-tested modules to gain the core benefits of speed and scalability.

The Service segment is the fastest-growing. As the number of modular deployments explodes, there is a rocketing demand for specialized expertise. This includes consulting to design the right-sized solution, complex on-site integration and deployment services, and long-term support and maintenance contracts to manage these distributed assets.

Modular Data Center Market Segmentation by Application:

• Capacity Expansion
• Edge Computing
• Disaster Recovery
• High-Performance Computing (HPC)

Capacity Expansion remains the most dominant application. The primary use case for most enterprises and colocation providers in 2024 is to add new, scalable "blocks" of compute or power to their existing data center campuses, and modular designs offer the most predictable and fastest way to achieve this.

Edge Computing is unequivocally the fastest-growing application. The global proliferation of 5G, IoT, and smart city initiatives is creating an urgent need for localized data processing. Modular data centers, particularly micro-modules, are the physical enabling technology for the edge, leading to their explosive growth in this segment.

Modular Data Center Market Segmentation by Data Center Size:

• Small & Medium Data Centers
• Large Data Centers

The Large Data Centers segment is the most dominant, holding the largest market share in 2024. This segment includes hyperscalers, large colocation providers, and major enterprises, which are the biggest purchasers of high-capacity modules for massive, campus-scale deployments and rapid capacity scaling.

The Small & Medium Data Centers segment is the fastest-growing. Smaller businesses and enterprises are increasingly adopting "all-in-one" micro-modular solutions to replace aging server rooms or to deploy their first on-premise, enterprise-grade data center. The scalability and lower upfront cost make it a highly attractive option for this segment.

Modular Data Center Market Segmentation by End-User:

• IT & Telecom
• BFSI (Banking, Financial Services, and Insurance)
• Healthcare
• Government & Defense
• Retail
• Manufacturing

The IT & Telecom segment is the most dominant end-user, contributing the largest revenue share in 2024. Cloud providers, telecommunications companies (for 5G/edge), and colocation facilities are the market's anchor tenants, using modular solutions to build out their core infrastructure at an accelerated pace.

The Healthcare segment is the fastest-growing. The digitization of patient records (EHRs), the rise of AI-powered medical diagnostics, and the need for robust disaster recovery and HIPAA-compliant infrastructure are driving hospitals and healthcare networks to rapidly adopt modular data centers for their reliability and scalability.

Modular Data Center Market Segmentation: Regional Analysis:

• North America
• Europe
• Asia-Pacific
• Middle East & Africa
• South America

Most Dominant Region: North America dominates the market, holding the largest share of approximately 41% in 2024. This is due to the massive presence of hyperscale cloud providers, a mature data center market, and the rapid adoption of AI and edge computing technologies, particularly in the United States.

Fastest-Growing Region: The Asia-Pacific region is the fastest-growing, driven by massive digital transformation initiatives, 5G rollouts in countries like China, India, and South Korea, and a booming data center construction market. This region presents the most significant new growth-front for modular data center vendors.

Modular Data Center Market COVID-19 Impact Analysis:

The COVID-19 pandemic acted as a powerful, unforeseen accelerant for the modular data center market. As the world instantly shifted to remote work, e-commerce, and digital streaming, it placed an unprecedented load on existing digital infrastructure. This created an immediate, urgent need for new data center capacity. Modular solutions, with their 50% faster deployment time, became the go-to strategy for cloud providers and enterprises scrambling to meet this "black swan" surge in demand, cementing their strategic value.

Latest Market News (2024):

• November 2024: LG Electronics announced a strategic partnership with global infrastructure provider Flex. The collaboration aims to jointly develop and deploy next-generation, high-efficiency modular cooling systems specifically to address the extreme heat challenges posed by new AI data center workloads.
• July 2024: Omdia, a leading technology research firm, released a report highlighting that the global AI boom was a primary catalyst for the peak growth seen in the prefabricated modular data center market during 2023 and 2024, as enterprises rushed to deploy AI-ready infrastructure.
• July 2024: Vertiv, a major market player, introduced its "MegaMod CoolChip." This is a high-density, prefabricated modular solution featuring advanced liquid-to-chip cooling, designed to expedite the deployment of AI compute and reduce time-to-market by as much as 50%.
• February 2024: Schneider Electric and NTT DATA announced a major collaboration. The partnership will focus on jointly developing and marketing a suite of solutions combining Edge, Private 5G, and modular data center technologies to create powerful, integrated offerings for enterprises.

Latest Trends and Developments:

The most dominant trend in 2024 is the deep integration of advanced liquid cooling. As air cooling hits its physical limits, modules are now being designed "liquid-first." This is coupled with a rising focus on sustainability, with vendors engineering modules that offer ultra-low Power Usage Effectiveness (PUE) and utilize recycled materials. Another key development is the use of AI-driven DCIM (Data Center Infrastructure Management) software, which allows for the remote management, monitoring, and autonomous optimization of these new, highly distributed modular assets.

Key Players in the Market:

1. Schneider Electric
2. Vertiv Group Corp.
3. Huawei Technologies Co., Ltd.
4. Dell Inc.
5. Hewlett Packard Enterprise Development LP (HPE)
6. IBM Corporation
7. Eaton
8. Rittal Pvt. Ltd.
9. Cannon Technologies Ltd.
10. CommScope Inc.