This article is the third analyst insight of a four-part series from IHS Markit in which the Data Center Infrastructure team will explore the potential benefits of edge data centers and what they mean for related infrastructure markets. This discussion focuses on how edge data centers are affecting the market for containerized and modular data centers. For an introduction to edge data centers, see part one of the series. Also see part two for a discussion of UPS systems in edge data centers.
The containerized and modular data center market continues to grow at double-digit rates year over year, with shipments expected to increase 21% in 2016. The current and historical growth has largely been driven by hyperscale data center operators, which have homogeneous compute loads and massive needs for new and refreshed IT equipment, and some niche applications where a mobile, ruggedized data center is the only option (for example, disaster recovery and military deployments).
IHS Markit is looking at a new driver for this market: the emerging need for and growing importance of small data centers closer to the end user. The Internet of Things (IoT), bandwidth-intensive content and the greater expectations for speed of access require that more data centers reside closer to end users. These data centers can cache bandwidth-intensive content, aggregate data from local connected devices and limit the traffic to and from geographically dispersed facilities. Containerized and modular data centers (CMDCs) uniquely answer many of the requirements of an edge data center. The following are some characteristics of CMDCs that are well suited to edge applications:
- Low service requirements: Largely designed to be “lights out” data centers, CMDCs have indeed overcome many of the original serviceability concerns. Most of them, however, are still not designed for regular visits by IT staff. Edge data centers need maintenance and upgrades infrequently, so operators need not invest in the additional space and features that human occupancy typically necessitate.
- Telco and network carriers already familiar with these facilities: Telecommunications and network carriers will be one of the main builders of edge data centers and are already users of containerized/modular solutions for their network and telco equipment. Many CMDC providers have existing relationships with these companies and specialized products targeting their needs. The movement from containerized network enclosures to containerized data centers, when and where needed, will be a natural transition for them.
- Deployment speed: The need for an edge-of-network data center may arise quickly (as has occurred with Pokémon Go), and CMDCs can be built and deployed to a remote location in as little as a few months. If a company knows it will need data centers somewhere, but is just uncertain as to the exact location, it could build CMDCs for deployment when it decides on that location, creating a turnaround time of less than a month in some cases.
- Basic and functional designs: Edge data centers need not be innovative or employ cutting-edge design; they are a tangential piece of a company’s data center portfolio rather than the defining corporate image. For that reason, a basic unit with moderate storage and IT load capacity will be sufficient for most purchasers.
- Repeatable and scalable: Builders of edge data centers will likely be companies that plan to deploy more than just one. Such companies will include major content providers, telcos and network carriers looking to improve response time and performance through their networks. They will be unable to achieve this goal by just offering better performance to one city, however; they must deploy edge data centers across multiple cities to make a noticeable difference. The ability to deploy identical data centers will appeal to companies that want a best-practice design on which they can train a team of technicians.
- Use distant data center design expertise: Edge data centers provide content and connectivity to populations that are distant from an IT hub. Those regions are also less likely to have an abundance of data center design and build expertise. So the ability to fully prefabricate a data center in a manufacturing facility elsewhere, then deploy it to a more rural or remote location, may save on the cost of importing/relocating labor and design knowledge.
These six unique features of containerized and modular data centers are clearly well suited to addressing edge-of-network data needs. Shipments in support of these smaller and more geographically dispersed data centers have already started, and IHS expects the market will grow at a substantial rate over the next five years, underpinning the assumption of a five-year CAGR of nearly 20%.
About the Author
Liz Cruz is an Associate Director with IHS Markit and leads the company's Data Center Infrastructure research group. She manages a team of analysts producing high-quality market intelligence on data centers, including power and cooling systems (UPS, power distribution and cooling), rack-level infrastructure (enclosures), as well as wider industry trends (containerized and colocation data centers). She joined IHS Markit via its acquisition of IMS Research in March 2012.