Modular Data Centers Market

Market Definition

The market encompasses prefabricated, containerized infrastructure solutions designed for rapid deployment, scalability, and efficient operation of IT workloads. These standardized units integrate computing, storage, power, and cooling systems, enabling easy transport and on-site assembly.

The report outlines the primary drivers of market growth, along with an in-depth analysis of emerging trends and evolving regulatory frameworks shaping the industry's trajectory.

Modular Data Centers Market Overview

The global modular data centers market size was valued at USD 27.09 billion in 2024 and is projected to grow from USD 30.76 billion in 2025 to USD 84.49 billion by 2032, exhibiting a CAGR of 15.53% during the forecast period. 

This growth is attributed to the rising demand for scalable and flexible data center solutions across key sectors such as cloud services, telecommunications, and enterprise IT. Increasing adoption of cloud computing, edge computing, and the Internet of Things (IoT) is highlighting the need for faster deployment and efficient management of data infrastructure.

Major companies operating in the modular data centers industry are Eaton, Dell Inc., Schneider Electric, Vertiv Group Corp, Huawei Digital Power Technologies Co., Ltd., IBM, Hewlett Packard Enterprise Development LP, Cannon Technologies Ltd, BladeRoom Group Limited., Rittal GmbH & Co. KG, EDGE MISSION CRITICAL SYSTEMS, LLC, Iron Mountain, Inc., Colt Data Centre Services Holdings., STULZ GMBH, and CommScope.

The growing emphasis on reducing energy consumption and improving operational efficiency is fueling market expansion. Additionally, ongoing innovations in modular design, enhanced cooling technologies, and increasing investments from hyper scale data center operators and technology vendors are accelerating market development.

• In November 2024, Schneider Electric expanded its EcoStruxure Modular Data Centre factory in Barcelona from 7,000 m² to 12,000 m². This expansion aims to address the growing demand for prefabricated, high-performance data centers driven by AI, making it the company's largest modular data center manufacturing site in Europe.

Key Highlights

1. The modular data centers industry size was valued at USD 27.09 billion in 2024.
2. The market is projected to grow at a CAGR of 15.53% from 2025 to 2032.
3. North America held a market share of 39.70% in 2024, with a valuation of USD 10.75 billion.
4. The tier 3 segment garnered USD 13.98 billion in revenue in 2024.
5. The solutions segment is expected to reach USD 55.62 billion by 2032.
6. The large enterprises segment is anticipated to witness the fastest CAGR of 18.12% over the forecast period.
7. The enterprise segment garnered USD 10.40 billion in revenue in 2024.
8. The IT & telecom segment is expected to reach USD 20.85 billion by 2032.
9. Asia Pacific is anticipated to grow at a CAGR of 19.12% through the projection period.

Market Driver

Surging Need for Rapid Deployment and Scalability

The progress of the modular data centers market is fueled by the growing need for rapid infrastructure deployment to support expanding digital ecosystems. Rising demand for low-latency services, real-time data processing, and flexible IT environments is prompting organizations to adopt modular solutions that can be deployed within weeks. These solutions enable incremental scalability, reduce upfront capital investment, and support agile response to fluctuating workload demands.

This shift is further supported by the need for business continuity, faster time-to-market, and the growing adoption of edge computing, which demands compact, high-performance setups. In response, data center operators and cloud providers are investing in scalable modular systems, accelerating market growth.

• In June 2025, Siemens Smart Infrastructure, Cadolto Datacenter GmbH, and Legrand Data Center Solutions launched a modular edge data center at Data Center World Frankfurt. Designed for rapid deployment, scalability, and energy efficiency, the solution features customizable prefabricated modules with integrated automation and IT infrastructure, optimized for AI and high-performance computing.

Market Challenge

Cooling and Power Constraints in Harsh Climates

Cooling and power constraints in harsh climates pose significant challenges to the expansion of the modular data centers market, particularly in regions with high ambient temperatures, humidity, and limited grid reliability. Maintaining consistent thermal conditions and uninterrupted power supply is critical for data center uptime. 

However, extreme environmental factors can reduce system efficiency and increase operational risk. Inadequate cooling can lead to overheating, equipment degradation, or increased energy usage, while inconsistent power availability can disrupt operations, particularly in remote or underdeveloped areas. These limitations can deter organizations from adopting modular solutions in such areas.

To overcome these issues, manufacturers are incorporating high-efficiency liquid and evaporative cooling systems, along with adaptive thermal controls designed for wide climate tolerances. Off-grid deployments are supported by integrating renewable energy sources, battery storage, and modular backup generators. 

Furthermore, advancements in enclosure design, such as insulated, weather-resistant shells and dust-proof filtration systems, are enhancing resilience and enabling reliable modular data center operations in extreme environments.

Market Trend

Growing Adoption of Cloud and Edge Computing

The growing adoption of cloud and edge computing is reshaping the modular data centers market by increasing demand for decentralized, scalable, and low-latency infrastructure. Cloud computing enables centralized data storage and on-demand resource allocation, while edge computing supports real-time data processing closer to end users, devices, and applications minimizing latency and bandwidth usage.

Modular data centers are well-suited for these environments due to their ability to be rapidly deployed at regional or edge locations, offering flexible configurations that support both cloud and edge workloads. Their standardized, prefabricated architecture allows organizations to expand computing capacity incrementally and efficiently in line with evolving digital demands. 

Moreover, the integration of 5G, AI, and Internet of Things (IoT) is accelerating the need for responsive and localized infrastructure. As digital transformation advances, modular data centers are becoming critical to modern cloud-edge ecosystems.

• In October 2023, JLL, Lumen Technologies, and Schneider Electric partnered to deploy modular data centers across the U.S. within six to nine months. The collaboration leverages Lumen’s fiber network, Schneider’s modular expertise, and JLL’s site selection to address growing demand fueled by AI, 5G, and edge computing.

Modular Data Centers Market Report Snapshot

Segmentation	Details
By Tier Type	Tier 1, Tier 2, Tier 3, and Tier 4
By Component	Solutions and Services
By Enterprise Size	Small & Medium Enterprises (SMEs), and Large Enterprises
By Deployment Type	Edge, Enterprise, and Colocation
By Industry Vertical	IT & Telecom, BFSI, Government & Defense, Healthcare, Media & Entertainment, Retail, and Others
By Region	North America: U.S., Canada, Mexico
	Europe: France, UK, Spain, Germany, Italy, Russia, Rest of Europe
	Asia-Pacific: China, Japan, India, Australia, ASEAN, South Korea, Rest of Asia-Pacific
	Middle East & Africa: Turkey, U.A.E., Saudi Arabia, South Africa, Rest of Middle East & Africa
	South America: Brazil, Argentina, Rest of South America

Market Segmentation

• By Tier Type (Tier 1, Tier 2, Tier 3, and Tier 4): The tier 3 segment earned USD 13.98 billion in 2024, mainly due to its optimal balance of reliability, scalability, and cost-efficiency, making it a preferred choice for enterprise and cloud data center deployments.
• By Component (Solutions and Services): The solutions segment held a share of 71.40% in 2024, propelled by increasing demand for pre-engineered, scalable infrastructure that enables rapid deployment and efficient management of data center operations.
• By Enterprise Size (Small & Medium Enterprises (SMEs) and Large Enterprises): The small & medium enterprises (SMEs) segment is projected to reach USD 47.87 billion by 2032, owing to the growing need for cost-effective, scalable, and easily deployable data center solutions that support digital transformation and business expansion.
• By Deployment Type (Edge, Enterprise, and Colocation): The colocation segment is anticipated to grow at a CAGR of 16.96% through the projection period, primarily fueled by increasing demand for outsourced data center facilities that offer scalability, security, and cost-efficiency to enterprises and service providers.
• By Industry Vertical (IT & Telecom, BFSI, Government & Defense, Healthcare, Media & Entertainment, Retail, and Others): The IT & telecom segment earned USD 8.34 billion in 2024,due to the rapid expansion of digital services, growing data traffic, and the increasing adoption of cloud and edge computing technologies within the industry.

Modular Data Centers Market Regional Analysis

Based on region, the market has been classified into North America, Europe, Asia Pacific, Middle East & Africa, and South America.

The North America modular data centers market share stood at around 39.70% in 2024, valued at USD 10.75 billion. This dominance is attributed to the presence of leading cloud and hyper scale data center operators, high digital transformation adoption rates, and strong investments in modular infrastructure technologies. 

Additionally, increasing demand for edge computing solutions, the rollout of 5G networks, and supportive government policies for data center sustainability are boosting regional market growth. 

Favorable regulations that promote energy efficiency and renewable energy integration, coupled with incentives for green data center development, further bolster this expansion. Additionally, the region’s emphasis on cybersecurity and data sovereignty is fueling innovation in modular design and accelerating adoption across industries.

• In March 2024, Eaton introduced its SmartRack Modular Data Center solution in North America to meet he growing demand for edge computing, AI, and machine learning. This prefabricated system supports up to 150 kW and includes integrated racks, cooling, and enclosures for rapid deployment in enterprise and industrial settings.

The Asia-Pacific modular data centers industry is set to grow at a CAGR of 19.12% over the forecast period. This growth is attributed to rapid digitalization, increasing internet penetration, and the expanding adoption of cloud and edge computing technologies across emerging economies. 

The presence of small and medium enterprises, coupled with growing investments in smart city initiatives and digital infrastructure development, supports the expansion of modular data center deployments. Government initiatives to enhance connectivity, IT infrastructure, and innovation hubs are spurring demand. 

Additionally, collaborations between technology providers, local governments, and global investors, along with advancements in modular design and energy-efficient solutions, are boosting regional market growth.

• In April 2024, Vertiv launched the AI-enabled SmartAisle 3 micro modular data center across Asia. Designed for rapid deployment and improved energy efficiency, the solution supports up to 120 kW and targets key sectors such as banking, healthcare, and government.

Regulatory Frameworks

• In the United States, the Federal Energy Management Program (FEMP) regulates energy efficiency in federal data centers by offering resources and guidelines to reduce energy consumption and operational costs.
• In the United Arab Emirates, the Dubai Data Law regulates data privacy and sharing, ensuring data sovereignty through strict compliance requirements for data controllers and processors.
• In the European Union, the General Data Protection Regulation (GDPR) enforces stringent rules on the processing and storage of personal data within data centers to protect user privacy.

Competitive Landscape

The modular data centers industry comprises established technology manufacturers and emerging startups focused on expanding product portfolios and geographic presence through technological innovation, strategic alliances, and tailored solutions. Companies are heavily investing in research and development to enhance modular designs, improve energy efficiency, and integrate features such as AI-driven automation and edge computing.

• In July 2024, Vertiv launched the MegaMod CoolChip, a high-density prefabricated modular data center solution designed for AI workloads. Equipped with liquid cooling and scalable power systems, it enables deployments up to 50% faster than traditional builds and supports high-performance computing globally.

They are also developing scalable, flexible infrastructure options to meet the diverse requirements of enterprises, telecom operators, and cloud service providers. Additionally, firms are forming collaborations with network operators, technology vendors, and system integrators to strengthen their supply chains, optimize deployment timelines, and accelerate market expansion.

List of Key Companies in Modular Data Centers Market:

• Eaton
• Dell Inc.
• Schneider Electric
• Vertiv Group Corp
• Huawei Digital Power Technologies Co., Ltd.
• IBM
• Hewlett Packard Enterprise Development LP
• Cannon Technologies Ltd
• BladeRoom Group Limited.
• Rittal GmbH & Co. KG
• EDGE MISSION CRITICAL SYSTEMS, LLC
• Iron Mountain, Inc.
• Colt Data Centre Services Holdings.
• STULZ GMBH
• CommScope

Recent Developments (Partnerships/Launch)

• In May 2025, Compu Dynamics Modular, LLC (CDM) launched turnkey modular data center solutions for AI, high-performance computing, and edge workloads. The prefabricated, vendor-neutral modules feature integrated cooling and power systems, enabling rapid, scalable, and energy-efficient deployment.
• In November 2024, Untether AI and Vertical Data formed a strategic partnership to develop AI-focused modular data centers. The collaboration combines Untether AI’s energy-efficient speedAI240 Slim accelerators with Vertical Data’s adaptable infrastructure to improve real-time AI processing at the edge.
• In June 2024, Hewlett Packard Enterprise (HPE) and Danfoss partnered to launch a modular data center heat recovery solution. It combines HPE’s infrastructure with Danfoss’ technology to cut energy use by up to 20% and reuse excess heat for sustainable building heating.
• In September 2023, Schneider Electric and Compass Datacenters expanded their partnership through a USD 3 billion, five-year agreement to produce and deliver prefabricated modular data centers. The collaboration aims to accelerate production, reduce costs, and meet the growing demand for AI-driven infrastructure.
• In April 2023, STULZ GMBH launched the Micro Data Center, a compact, all-in-one modular solution for edge computing. It includes power, cooling, fire suppression, monitoring, and security, supporting 4 kW to 100 kW per rack, making it suitable for applications such as high-performance computing, telecom, and IoT applications.