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The IT and telecom segment is estimated to witness significant growth during the forecast period. In the global market, Modular Data Centers hold a significant share, particularly in the IT and telecom sector. These centers are essential for providing the required computing power and storage for various applications and services in the industry. With the rise of cloud computing, the demand for data centers has escalated, as businesses seek to access resources without substantial capital expenditure. The IT and telecom segment was the largest and was valued at USD 4.02 billion in 2018. The influx of data from businesses and individuals necessitates data centers capable of handling vast amounts of information. Recession or not, Modular Data Centers offer scalability and rapid deployment, making them attractive to mobile network providers and data center colocation providers. Green data centers, with their standard design and cooling systems, are increasingly popular due to their energy efficiency. Big data, AI, cloud computing, 5G infrastructure, Internet of things, and cloud-based solutions are driving the market's growth.
North America is estimated to contribute 30% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The Edge computing trend is driving the growth of the market in the US and Canada, particularly in the BFSI industry. Large enterprises are shifting towards energy-efficient data centers to minimize costs and CAPEX, opting for cloud solutions from hyperscale providers like AWS, Microsoft, and Oracle. As of 2021, the US hosts over 2,670 data centers, making it the global leader. Quicksilver Capital and the World Economic Forum highlight the importance of digital transformation in this context. These offer Scalable data centers for large enterprises, enabling them to meet their computing capacity requirements efficiently.
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They have emerged as a popular solution for businesses seeking scalability and rapid deployment during times of economic uncertainty, such as a recession. These data centers utilize a modular design, allowing for easy expansion and contraction based on demand. Green data centers, which prioritize energy efficiency, are a key focus in the modular data center market. Mobile network providers and large enterprises are major consumers, as they require cloud-based networking and 5G infrastructure to support digital transformation initiatives. The solutions sub-segment and services segment of the modular data center market are expected to grow significantly, as businesses increasingly turn to cloud-based solutions for their data storage and processing needs. The World Economic Forum has the importance of energy-efficient data centers in reducing carbon emissions and mitigating the environmental impact of digitalization. Quicksilver Capital and other investors have shown interest in the modular data center market, recognizing its potential for innovation and growth. Overall, the modular data center market is poised for expansion, driven by the need for scalable, energy-efficient, and quickly deployable solutions.
Requirement to reduce complexity of traditional data centers is notably driving market growth. In today's business landscape, enterprises operating a single traditional data center face increasing complexity in management and rising capital expenditures due to advanced power and cooling systems. The economic downturn (recession) further the need for cost-effective and scalable solutions. Modular Data Centers offer a standardized, mobile design for rapid deployment, making them an attractive alternative. Mobile network providers and colocation providers are among the key adopters. Modular Data Centers provide a greener approach with energy-efficient cooling systems (HVAC) and IT equipment. Big data, AI, cloud computing, 5G infrastructure, and IoT require high operating temperatures, making modular design essential. Modular IT modules from companies like HPE cater to various organization sizes, including SMEs and commercial and industrial sectors.
Rapid deployment addresses transportation challenges, including truck regulations and over-the-road laws. Modular Data Centers offer cloud-based solutions, disaster recovery, and function module services, making them a valuable investment with a good return on investment. Cooling systems, HVAC, and IT equipment are integrated into the modules, reducing the need for on-premises services. Despite their benefits, lack of awareness and understanding of Modular Data Centers may hinder their adoption. However, as technology continues to evolve, the integration of AI, robotics, and automation in cloud-based solutions and 5G infrastructure will further boost their popularity. Thus, such factors are driving the growth of the market during the forecast period.
Implementation of software-defined modular data center is the key trend in the market. In today's business landscape, enterprises are increasingly adopting to manage their IT infrastructure more efficiently. During economic downturns like recessions, the flexibility and cost savings offered by these data centers become particularly attractive. Modular Data Centers, which utilize a standard design for scalability, can be rapidly deployed for mobile network providers and colocation providers. However, transportation challenges, such as truck regulations and over-the-road laws, can impact deployment. These data centers, which support both legacy applications and cloud computing services, are essential for big data processing and 5G infrastructure. They offer greater security, higher availability, and energy efficiency, making them ideal for green data centers.
Capital expenditure and return on investment are key considerations for organizations of all sizes, from SMEs to commercial and industrial entities. They can be integrated with cooling systems, HVAC systems, and IT equipment to maintain optimal operating temperatures. HPE and other leading IT module providers offer function module solutions for various industries, including disaster recovery and cloud-based solutions. Additionally, cloud-based networking, AI, and robotics and automation are increasingly being integrated into these data centers to enhance their capabilities. Despite their benefits, a lack of awareness and the continued popularity of on-premises services remain challenges. Such factors will increase the market growth and trends during the forecast period.
Lack of awareness and expertise in operating modular data centers is the major challenge that affects the growth of the market. In today's economic climate, adoption is on the rise, particularly among colocation and telecommunication service providers. These facilities offer several advantages, including scalability, rapid deployment, and energy efficiency, making them ideal for green data centers. However, many data center operators remain unaware of the benefits and the incremental capital expenditure involved in constructing modular facilities. Traditional data centers require substantial upfront costs, while modular designs allow for the addition of IT modules as demand grows. Mobile network providers and SMEs are increasingly turning to these due to their standard design and ease of transportation.
However, transportation challenges, such as truck regulations and over-the-road laws, can impact the cost-effectiveness of these solutions. They are particularly suited for organizations of all sizes, from commercial and industrial enterprises to those in the IT sector. With the increasing adoption of technologies like 5G, cloud computing, AI, and robotics and automation, the need for scalable and efficient data centers is more critical than ever. Despite the advantages, a lack of awareness and understanding of the specifics of Modular Data Center operation can negatively impact productivity. Proper configuration of cooling systems, HVAC, and IT equipment is essential to maintain operating temperatures and ensure optimal performance. Colocation providers offering function module solutions can help organizations overcome the challenges associated with Modular Data Center operation and reap the benefits of this innovative technology. Additionally, these providers can offer disaster recovery services and cloud-based solutions to help organizations maximize their return on investment.
The market is fragmented in nature. Some significant players include Amazon.com Inc.and Cannon Technologies Ltd.
The market research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Cisco Systems Inc., Colt Technology Services Group Ltd., Datapod, Dell Technologies Inc., Delta Electronics Inc., Eaton Corp. Plc, Furukawa Electric Co. Ltd., GREEN4T SOLUCOES TI LTDA, Hewlett Packard Enterprise Co., Huawei Technologies Co. Ltd., IE Corp., International Business Machines Corp., Iron Mountain Inc., Microsoft Corp., Rittal GmbH and Co. KG, Schneider Electric SE, Vertiv Holdings Co., and WESCO International Inc.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
Further, the applications market is segmented into BFSI, IT and Telecommunication, Retail and E-commerce, Healthcare, and others. The market is expected to grow at a steady pace due to the increasing adoption of cloud computing and the need for businesses to reduce their carbon footprint. The market is also driven by the growing trend of edge computing and the need for businesses to deploy data centers closer to their customers to reduce latency. In conclusion, the market is a growing and dynamic industry that offers significant opportunities for businesses looking to reduce their IT infrastructure costs and improve their operational efficiency. The market is expected to continue its growth trajectory in the coming years, driven by the increasing demand for data center infrastructure and the need for businesses to deploy data centers in remote locations.
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Market Scope |
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Report Coverage |
Details |
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Page number |
170 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 19.8% |
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Market Growth 2024-2028 |
USD 42.56 Billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
16.28 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 30% |
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Key countries |
US, UK, China, Germany, and Japan |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Amazon.com Inc., Cannon Technologies Ltd., Cisco Systems Inc., Colt Technology Services Group Ltd., Datapod, Dell Technologies Inc., Delta Electronics Inc., Eaton Corp plc, Furukawa Electric Co. Ltd., GREEN4T SOLUCOES TI LTDA, Hewlett Packard Enterprise Co, Huawei Technologies Co. Ltd., IE Corp., International Business Machines Corp., Iron Mountain Inc., Microsoft Corp., Rittal GmbH and Co. KG, Schneider Electric SE, Vertiv Holdings Co., and WESCO International Inc. |
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Market dynamics |
Parent market analysis, Market forecasting growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the market forecast period. |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Component
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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