Demand for datacenters increases search for modular solutions

The prefabricated modular and micromodular datacenter market will reach a value of $11.7 billion by 2027, with peak growth in the period 2023-2024, reveals new research by Omdia. This boost will be fuelled by the need to accelerate the construction of new facilities to meet the boom in Artificial Intelligence (AI) solutions.

The prefabricated modular datacenter (PMDC) market is made up of single and multiple modules that can bring together one function (e.g. power, cooling) or all datacenter functions. According to Omdia, this segment is expected to add up to $8.6 billion in sales by 2027.

The largest category in this market, prefabricated power modules, has grown the fastest of all the other types of modules monitored by the survey, as it has enabled the construction of new datacenters and the expansion of the power capacity of existing datacenters.

Micromodular datacenters (microDCs) are made up of single and multiple module designs, which are shipped pre-integrated by suppliers. Omdia expects the segment to total $3.1 billion in sales by 2027.

‘Micro-DCs are attractive to both cloud service providers and companies. Hyperscale cloud service providers were the first to adopt micro-DCs in multiracks. Pre-integration has accelerated local installation,’ says Vlad Galabov, research director for Omdia’s Cloud and DataCenter areas.

Market leaders

Omdia’s study points to Huawei as the leader in the global PMDC solutions market, followed by Schneider Electric and Vertiv. Johnson Controls, Schneider Electric and M.C. Dean are the three largest suppliers in North America. Vertiv and Rittal lead in Western Europe, while Huawei is the largest supplier in Asia and Oceania and the rest of the EMEA region.

The microDC systems market is significantly more diverse due to lower barriers to entry. Huawei is the market leader, although Vertiv and DTCT follow close behind.

‘We expect to see more innovation in the areas of PMDC and microDC, with a focus on high energy density systems aimed at supporting highly configured servers optimised for AI workloads,’ says Siraj Aziz, an analyst at Omdia. ‘Our forecast is that the integration of liquid cooling and batteries will be two important areas of innovation,’ he adds.

Parallel to the creation of electricity networks

Blackstone, one of the world’s largest asset managers, in its earnings conference call for the second quarter of 2024, held on 18 July, highlighted significant investments in the area of datacenters, with more than $70 billion planned in its pipeline that currently consists of $55 billion, including datacenters under construction.

This figure is part of Blackstone’s wider strategy to capitalise on the growing demand for digital infrastructures, particularly driven by the rise of AI technologies. Blackstone claims to have the fastest growing datacenter platform in the world.

Stephen Allen Schwarzman, chairman and CEO of Blackstone, believes that the consequences of AI are as profound as those that occurred when Thomas Edison patented the electric light bulb. He believes that the construction of today’s datacenters to drive the AI revolution parallels the development of commercially viable products from Edison’s invention and the subsequent construction of electricity grids over the following decades.

Blackstone’s expectations are that there will be approximately $1 trillion in capital expenditure in the United States alone over the next five years to build new datacenters and a further $1 trillion outside US territory.

Blackstone also foresees investment opportunities in the field of energy. The asset manager explains that the need to supply energy to datacenters is one of the main elements that will contribute to an expected 40% increase in demand for electricity in the United States over the next decade, compared to the minimal growth of the last 10 years. Schwarzman believes that this trend will generate unprecedented investment opportunities for Blackstone which, according to him, is well placed to be the largest financial investor in AI infrastructures in the world.