What Are Modular Data Centers?

Modern businesses consider data one of their key assets. The information derived from data empowers organizational leaders to make informed decisions, improve operational efficiency, gain better access to scalability and enhance the customer experience. If leveraged strategically, data can also significantly provide businesses with a competitive advantage.

While the value of data is clear, businesses also need to plan for both their day-to-day and long-term management of this valuable asset. To accomplish this, they need data centers to store, process, interpret and manage the vast amounts of data flowing through their organizations. Generally, businesses have two primary options: a traditional data center or a modular data center.

When making the decision of whether to invest in a modular data center, it’s important to consider a few key factors, including type, benefits and potential limitations or challenges. In this article, we’ll look to answer some of your top questions regarding modular data centers.

What is a Modular Data Center?

A modular data center is a data center that performs the same functions as a traditional data center. The primary difference is that it is constructed from pre-engineered, standardized components. Unlike traditional data centers, which are built on-site, a modular data center is assembled in a different location, tested for usability and then delivered to your business – ready to install! You can integrate the components into your existing infrastructure or form a new standalone data center.

Many decision-makers responsible for the purchase of technology often wonder what the differences are between modular data centers and traditional builds. Here we’ll take a look at the key attributes of each one.

Traditional Data Centers

These centers are “heavy duty,” highly reliable and able to handle excessive use and power. However, they are more expensive to build, require much more power and are limited in scalability since they are limited by available physical space.

Modular Data Centers

On the other hand, modular data centers are highly cost-effective, energy-efficient and more scalable. With this solution, businesses lose some customization, but do gain many other advantages.

As with any technology decision, it’s important to evaluate issues such as organizational requirements, budget and future needs when making a decision.

Types of Modular Data Centers

Modular data centers are not a one-size-fits-all solution. If your organization is considering going this route, you will have choices. Unlike the rigidity of traditional data centers, modular structures are more “Lego-like” in nature, since you aren’t locked into a set physical space. Rather, you can adapt where or when needed. The following are modular data center options your business can consider.

• Containerized. This type of modular is often referred to as an “all-in-one” solution. Constructed in standardized units, it includes IT equipment, power infrastructure and a cooling system. They are also easy to transport and deploy.
• Prefabricated modules. This product consists of pre-engineered components, is built off-site and then assembled on-site.
• Hybrid solutions. A product that combines the advantages of traditional modular data centers but includes the scalability and fast deployment of modular designs.

Not sure what would be ideal for your company? The knowledgeable and experienced experts at Red River can help you identify the best solution.

Benefits of Using Modular Data Centers

In today’s increasingly complex technology infrastructures, modular data centers are becoming a popular option for businesses of all shapes and sizes. In 2024, the market was valued at a significant $30.27 billion and is estimated to reach a staggering $81.56 billion by 2031 – that’s more than doubling in just a mere six years. The reason for this growth is typically attributed to the numerous advantages businesses can enjoy.

Rapid Deployment

Traditional data centers require a much longer timeframe to be constructed and ready to use. In contrast, modular data centers can be quickly deployed and configured for use. As a result, companies can quickly scale their IT infrastructure to the timetable they desire.

Cost-Efficiency

Due to the prefabrication and standardized construction of modular data centers, this option delivers significant cost savings. Maintenance is also easier to manage for smaller or mid-sized companies, further adding to cost-efficiency.

Sustainable

Since less onsite construction is involved and fewer materials are required to build modular data centers, this makes them a more sustainable solution. This is especially true when factoring in the savings associated with a business’s lower energy consumption. Furthermore, since sustainability is important to society, businesses embracing Earth-friendly strategies are likely to gain more traction in various markets.

Scalability and Flexibility

One of the greatest benefits of modular data centers is that they are not constrained by physical space. They can be easily reconfigured or expanded as needed. All you need to do is add or remove modules when you want, providing your organization with a high level of flexibility as technology evolves, or your business changes or grows. Some models are also highly portable and can be quickly transported to another location if or when a need arises.

Energy Savings

Modern modular data centers are designed to be highly energy efficient. They also don’t require the extensive support that traditional data centers do, because they don’t need vast cooling systems and physical space.

Security and Compliance

Companies can improve their security posture using modular data centers. This is because they can control the location of their systems while simultaneously limiting access to their IT infrastructure. Furthermore, businesses can store their valuable data in highly controlled environments that they own.

Use Cases

If you’re wondering how a modular data center might work, consider how other businesses are leveraging them. The following are popular types of use cases.

• Edge computing. Businesses can strategically place their modular at the edge of their networks, putting it in proximity with data generation, streamlining processes and improving user experiences.
• Disaster recovery. Disasters are unpredictable, and going offline for any extent of time, especially a prolonged outage, would be disastrous for any business. A modular data center can help keep operations flowing smoothly.
• Remote locations. Perfect for branch offices or other locations, each one can essentially have its own server room without the need to build a full data center or convert space into a server room.
• Hyperscale needs. Modular data centers are the perfect solution for areas of business that have extreme scalability requirements.
• Small and gradual deployments. Ideal for businesses requiring scalable and flexible solutions, they can deploy in stages if they need to or gain a better ability to make decisions on the fly.
• Retrofitting existing facilities. Need to upgrade? Modulars make this very easy. Simply integrate into your existing infrastructure.
• Adapting to artificial intelligence. AI requires more power, and having a data center in proximity to AI end users increases efficiency and can improve capacity with a dedicated modular; you’re looking at a couple of months rather than years to construct a traditional data center.

When making a decision, it is important to consider your organization’s technology requirements, accessibility and scalability. Every business is different, and for many, modular data centers can easily resolve challenges they face.

Challenges and Limitations of Modular Data Centers

While modular data centers do eliminate many of the hurdles businesses can face, it is essential to know potential limitations so they can be addressed. In some cases, a modular data center won’t work.

Customization Constraints

One of the biggest limitations of a modular data center is the lack of customization. Essentially, since these centers are pre-built off-site, you might not be able to design them as you would prefer, like you can when building a center from scratch.

It is important to evaluate whether your company can work around the constraints that accompany modular data centers before making the investment. The bottom line is, the more customization you need, this will ultimately reduce the cost-benefits of modular data centers.

Initial Costs

Over the long term, modular data centers are highly cost-efficient, but the initial costs associated with setup, along with the complexities they involve, may be a deterrent for some businesses. It’s important to know you will incur costs for the manufacture and transportation of the modular data center. However, also keep in mind, these expenses are not going to be recurring costs like you might have with a traditional data center.

Integration with Legacy Systems

Integrating any type of newer technology with a legacy system will always pose challenges, and a modular data center is no exception. Challenges can include data compatibility, data migration, performance bottlenecks, lack of standardized interfaces, security vulnerabilities (due to a lack of modern security features and protocols), knowledge gaps and other integration complexities.

General Integration Challenges

The integration of modular units with existing infrastructure can pose difficulties, especially in areas such as power and cooling, along with network integration.

Complexities in Maintenance

Generally speaking, maintenance is simplified with modular data centers. However, if multiple modulars are utilized and each requires its own maintenance, this may pose problems for some businesses, especially smaller ones that may not have the resources or personnel to take charge of maintaining them.

Cybersecurity and Compliance Needs

Due to their distributed nature, each modular unit will need to be adequately and independently secured. If not, this can increase a company’s security vulnerabilities and put it at risk. Companies will need to have robust protocols in place to safeguard their modular data centers. Organizations will also need to ensure each unit follows all industry and governmental compliance requirements.

Any adaptation or update in technology will pose challenges. This doesn’t mean making a change will have adverse effects on the organization. For example, working with a skilled partner can help you overcome these obstacles, so your company can enjoy the benefits.

Future Outlook and Trends in Modular Infrastructure

With the anticipated growth of the modular data center business expected to boom over the next six years, you can expect the trend of businesses shifting to more flexible options to continue. This market, much like other tech niches before it (e.g., the cloud and artificial intelligence), is expected to be a significant growth area.

As the need for more agile and cost-effective data management solutions continues, expect modular data centers to become more “normalized”.  Currently, the market is poised to become more popular as these products are integrated into daily business operations. Not unlike other preceding technology initiatives that are now completely ingrained in our daily lives.

The Construction and Role of Data Centers is Evolving

How modern data centers are constructed is rapidly changing. Not only construction, but their role is evolving too. Due to the rise of remote work and a general need for mobility in today’s work environments, businesses must address the challenges associated with having secure and reliable access to data.

Modular data centers are a viable solution because of their fast construction, efficiency, scalability and cost-effectiveness. Other driving forces include incredible data generation and growth, the increase of AI use and the continued expansion of cloud use. Combined, it’s clear today’s businesses need additional solutions; portability, flexibility and sustainability will likely continue to prove to be principal factors involved in decision-making.

Is Your Business Exploring Its Data Center Options? Red River Can Help!

The management of data is a vital consideration in our digital age. As time moves forward, businesses are going to continue to be heavily reliant on the security and accessibility of data. For many businesses, modular data centers are the perfect solution due to their ease, cost-effectiveness and scalability.

If your business is ready to explore its data center options, the experts at Red River are here to help. We consider ourselves to be a technology transformation company. As a part of our processes, we actively stay up-to-date on the latest technologies. With more than 25 years in the market, we have steadily brought our knowledge, experience and expertise to our clients.

Your business has its missions to fulfill. Our mission is to deliver solutions to help you best accomplish your goals. To schedule a consultation with us, contact Red River today, and we can get the conversation started.

We look forward to connecting with you.