Modular Data Center Market Forecast 2035: Rapid Expansion Fueled by Digital Transformation

Modular Data Center Market

Modular Data Center Market

According to the report, the global modular data center market is likely to grow from USD 27.3 Billion in 2025 to USD 104.3 Billion in 2035 at a highest CAGR of 14.3% during the time period. The modular data center market at the global level have been growing attributable to the rise in demand for scalable, energy-efficient IT infrastructure, accelerated digital transformation, and the need for rapid deployment in edge and remote environments. Favorable sustainability policies are together with the rise of cloud services across industries, are further support growth in the market.

Prominent solutions have providers using advanced technologies around performance improvements, reduced operations costs, and reduced time to market deployment. For example, in June 2025, Schneider Electric announced the new launch of a modular data center that featured integrated cloud connectively using AI and improved energy management applications to support telecom and financial institutions high-reliability, low-latency IT infrastructure. HPE also reported a new product launch in April 2025 of new edge-ready modular alternative with autonomous diagnostics features with real-time application monitoring for industrial applications that support demanding industries.

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Key Driver, Restraint, and Growth Opportunity Shaping the Global Modular Data Center Market

There is increasing interest from enterprise customers in cost efficient & scalable IT infrastructure, among other factors, driven by increasing demands for standardization, digital service acceleration in multiple industries, and the need for ongoing management. Organizations are showing an increased interest in modular systems that leverage integrated AI processing, edge computing, and advanced cooling technology for applications that require real-time data processing, sustainability, and benefits of faster time to deployment. In June of 2025, Vertiv announced the launch of next-gen prefabricated modular data center solutions that are designed to deploy into hyperscale and edge environments, having integrated machine learning based thermal optimization and remote management capabilities, for operational efficiency and uptime.

Nonetheless, the modular data center market is also beginning to see challenges. Projects are typically slow to implement due to initial capital challenges, legacy processes and systems, and regulatory compliance in different regions. In February of 2025, Rittal announced project delays in Eastern Europe related to changing regulations regarding energy efficiency, and challenges related to local infrastructure, proving the need for adaptative designs and increased regional agreement.

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Regional Analysis of Global Modular Data Center Market

The highest demand for modular data centers is in North America, due to the regions developed digital infrastructure, early adoption of edge and cloud technologies, and the highly concentrated zone for hyperscale data center operators and technology companies. For example, Microsoft partnered with Eaton in 2025 to begin deploying modular data centers with AI, to reduce power management and improve cloud service speed across several states in the United States. Overall, this partnership symbolizes the region’s growth towards deploying scalable and intelligent infrastructure.

The Asia Pacific region is growing rapidly due to the increase of the 5G rollout, smart cities initiatives, and cloud growth in India and China. In 2025, India began integrating modular data centers into their public infrastructure to enable real-time data processing.

The growth in Europe is induced by more stringent energy regulations and sustainable efforts. The partnership between Schneider Electric and the French government to deploy solar powered modular data centers can cut emissions by as much as 35% by the end of 2024.

Prominent players operating in the global modular data center market include prominent companies such as Baselayer Technology, LLC, Bladeroom Group Ltd., Cannon Technologies Ltd., Cisco Systems, Inc., Cloudframe, CommScope Holding Company, Inc., Cupertino Electric, Inc., Dell Technologies, Delta Electronics, Inc., Eaton Corporation, Flexenclosure AB, Gardner DC Solutions, Hewlett Packard Enterprise (HPE), Huawei Technologies Co., Ltd., IBM Corporation, ICS Cool Energy, Nortek Air Solutions, Panduit Corp., Rittal GmbH & Co. KG, Schneider Electric SE, Vertiv Group Corporation, along with several other key players.

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North America Leads the Modular Data Center Market amid High Cloud Adoption and Edge Infrastructure Investments

High cloud adoption, heightened investments in edge infrastructure, and consumer preference for scalable, low-latency processing are driving North America to remain a leader in the global modular data center market. The robust hyperscale presence, a digital-first mindset, and widespread deployment of 5G in the region collectively demonstrate the potential for far-reaching modular architectures in sectors such as telecom, BFSI, and government.

The U.S., specifically, is growing containerized and prefabricated data centers to support accelerated AI workloads, IoT applications, and disbursed networks, respectively. Several government-backed initiatives to accelerate adoption, such as the National AI Research Resource Task Force and federal support for resilient digital infrastructure, are driving the regional momentum.

Further, in February of 2025, a top U.S. cloud provider announced the plan to distribute modular edge data center services to major metropolitan areas to support real-time processing with lower levels of congestion. This move demonstrates the prior example of North America moving towards agile, energy-efficient, and cloud-enabled infrastructure via modular data center solutions.

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Key Trend: Integration of AI, IoT, and Liquid Cooling for Smart, Sustainable Modular Data Centers

A growing trend in the marketplace is to incorporate artificial Intelligence, IoT sensors and next generation cooling methods (liquid cooling for example) into modular data centers resulting in enhanced performance and efficiency. Smart monitoring enables predictive maintenance, distributes workloads, and allows for real time temperature control within the prescribed environment.

For example, Delta Electronics announced a next generation modular data center in May 2025 that is designed so that smart AI cooling management and IoT asset tracking would allow Styke for hyperscale operations, sustainably. This trend reflects a broader notion in the industry toward smart, automated MODS that align best with green IT and a digital-first ideology.

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Mr. Debashish Roy

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This release was published on openPR.

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