Micro Data Center Market

Market Overview

The global micro data center market size was valued at USD 5.8 billion in 2023 and is projected to reach USD 28.5 billion by 2032, registering a CAGR of 19.5% during the forecast period (2024-2032). The growing need for self-contained enclosures and integrated hardware will fuel the expansion of the micro data center market.

The micro data center market provides a self-contained unit with management and monitoring software, an uninterruptible power supply (UPS), power and cooling systems, and a rack to house all essential IT components. Organizations can enhance the speed of deployment, minimize capital expenditure, and decrease physical space and energy consumption by employing micro data centers.

The growing acceptance of edge computing, which involves processing data near its origin, has driven the need for microdata centers. The data centers' modular design enables simple scalability by adding or removing modules in response to evolving demands, providing a development opportunity for the micro data center market. Furthermore, the increasing demand for expedited data storage and processing access would also propel the market's expansion. The rapid process of digitization results in a substantial amount of data, increasing the need for high-performance data centers.

Highlights

• The solution generates the highest revenue share based on components.
• Large enterprises account for the largest market share by enterprise size.
• Above 40 RU generates the highest revenue share based on rack units.
• Edge computing contributes significantly to the market through application.
• BFSI accounts for the largest market share by industry vertical.

Market Dynamics

Global Micro Data Center Market Drivers

Advent of the Internet of Things, Artificial Intelligence, Machine Learning, and Big Data

The increasing popularity of the Internet of Things (IoT), content distribution, and 5G has led to a significant increase in the need for fast data processing and storage access. IoT, big data, machine learning (ML), and artificial intelligence (AI) are technologies that produce massive amounts of data, necessitate fast processing, and rely on computing resources that are close by. LoTExpress Technologies Pvt. Ltd. Reports that the number of IoT devices in the APAC region is projected to exceed 15 billion by the end of 2023, representing a 55% growth compared to 2020. By 2025, these devices will produce 79.4 zettabytes (ZB) of data. The data produced by Internet of Things (IoT) devices must be promptly processed, stored, and analyzed in real-time. Internet of Things (IoT) gadgets are extensively utilized globally, facilitating the connection of diverse physical things and data gathering and exchange.

Furthermore, deploying micro data centers near the network edge offers localized computing power, storage, and analytics capabilities. This helps minimize the delay and bandwidth needed to transport data to a central data center. Micro data centers enhance real-time decision-making and support Internet of Things (IoT) deployments in various industries such as manufacturing, healthcare, transportation, and smart cities. Consequently, there is an increasing trend in adopting micro data centers, resulting in a corresponding increase in the introduction of advanced micro data center solutions. 

Micro-modular Solutions and Rising Self-contained IT Facilities

The increasing need for micro-modular solutions to improve the mobility and portability of the IT environment expedites the growth of the micro data center market. These facilities enable organizations to seamlessly transfer or relocate their IT infrastructure environment to new business sites or headquarters. Large organizations with a distributed network across multiple sites necessitate additional IT equipment to accommodate the rapid growth in business operations. Large enterprises increasingly use these portable systems to provide additional IT assistance to enormous locations.

In addition, prominent corporations like Amazon, Google, and Facebook have strategically developed large-scale facilities worldwide to enhance their corporate operations. Implementing micro solutions will enable these organizations to scale up their IT infrastructure with reduced time and financial resources. These factors are having a beneficial impact on the growth of the micro data center market.

Moreover, the growing prevalence of self-contained IT facilities will stimulate the need for services in the micro data center industry, including installation, maintenance, and consulting. Nations such as the United States, Canada, and China are experiencing a significant surge in the need for installation services due to the swift integration of information technology infrastructure in the corporate landscape. The industry is experiencing a rapid growth in the need for maintenance services due to the increasing installation of micro facilities. These data center facilities have lower maintenance costs than typical facilities since they have an integrated framework with energy-efficient technologies.

Global Micro Data Center Market Restraints

Integration and Cost Constraints

The growth of the micro data center industry is projected to be hindered by integration and cost limitations. Although micro data centers provide various advantages, such as modularity, scalability, and energy efficiency, incorporating them into current IT settings can pose difficulties for enterprises. The adoption of micro data centers might need to be improved by compatibility concerns with old systems, challenges in software integration, and the requirement for qualified IT staff to administer and maintain them.

Moreover, financial limitations provide a considerable obstacle for many companies and micro and medium-sized enterprises (SMEs), as the initial capital needed to implement micro data centers may be too expensive. Furthermore, the continuous expenses associated with operating micro data centers, such as power usage, cooling, and maintenance, influence their overall cost. This may affect their affordability for specific market groups.

Global Micro Data Center Market Opportunity

Sustainability Benefits of Micro Data Centers

Micro data centers can provide significant sustainability benefits. Transferring computer resources to the data source minimizes the energy consumption needed for data transmission across a network. This can result in substantial energy conservation and a reduction in carbon emissions associated with the cooling and powering of data centers. Additionally, micro data centers often employ highly efficient designs with state-of-the-art power management and cooling systems that consume less energy. 

In addition, Zella DC's micro data centers are specifically designed to prioritize energy efficiency. They reduce energy consumption and minimize the environmental impact of data processing by employing state-of-the-art cooling and power management technology. Zella DC's micro data centers are now some of the most energy-efficient ones available, boasting a remarkably low Power Usage Effectiveness (PUE) of 1.2. Reducing energy use and greenhouse gas emissions addresses environmental issues and decreases business operational costs. Therefore, this is anticipated to provide a profitable opportunity for the micro data center market throughout the projected timeframe.

Regional Analysis

The global micro data center market analysis is conducted across North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

North America Dominates the Global Market

North America is the most significant global micro data center market shareholder and is estimated to grow at a CAGR of 19.1% over the forecast period. The increasing digitization and adoption of innovative technologies in retail are expected to make North America a dominant region globally. Retailers progressively utilize machine learning-driven big data to enhance consumer experience and optimize manufacturing and logistics processes. An example is the ALDO Group, a retailer based in Canada, which utilizes big data analytics to identify the appropriate customers and forecast upcoming trends that enhance sales. Therefore, the growing utilization of analytics solutions would incentivize shops to establish a micro data center. The existence of prominent industry participants around the United States facilitates substantial advancements in micro data centers. This element also contributes to the good expansion of the market in the region. In March 2020, Vertiv Group Corporation declared its intention to introduce a single-phase UPS system incorporating lithium-ion batteries into the North American Market. The objective of the approach was to enhance the operational time and minimize the need for upkeep in micro data centers.

Europe is anticipated to exhibit a CAGR of 19.8% over the forecast period. Europe is at the forefront of implementing 5G network infrastructure. The increasing adoption of 5G networking technology by leading telecommunications providers is driving the growth of the micro data center market. In May 2020, Tele2 AB, a European telecom service provider, introduced a 5G network in Gothenburg, Stockholm, and Sweden. The European manufacturing sector has also begun integrating advanced technologies like 5G, robotics, machine learning, and IoT to enhance productivity. This element would have a beneficial impact on the growth of the microdata Centre market. Furthermore, the German government's Industry 4.0 strategy promotes digitalization, increasing European market growth. In addition, as the use of edge computing services continues to grow, Europe will experience a significant increase in demand for micro data centers in the upcoming years.

The Asia Pacific region is expected to expand substantially due to several government initiatives emphasizing power usage effectiveness and reducing energy consumption in data centers. In June 2019, the Chinese government implemented data center laws that require current data centers to have a power use effectiveness (PUE) below 1.4. The value for the new data center should be below 1.3. The rapid development of IT infrastructure is a crucial driver of the need for micro data centers in the Asia Pacific region. Government initiatives in nations such as China, India, South Korea, Japan, and Singapore promote industrial sector progress to foster economic growth. The increasing advancements in the industrial sector, particularly in China and Taiwan, will drive the revenue of the micro data center market.

Segmental Analysis

The global micro data center market is segregated based on component, enterprise size, rack unit, application, and industry vertical. 

Based on components, the market is segmented into Solutions and Services.

The solution segment dominated in 2023. Micro data centers are constructed using a modular framework, enabling enterprises to expand or reduce their IT infrastructure by adding or deleting modular components as required. The modularity of micro data centers allows enterprises to customize their configuration according to their individual needs, increasing flexibility. Furthermore, they frequently include built-in cooling mechanisms specifically designed for the reduced size of operations. Effective cooling solutions are essential for regulating the temperature within the micro facility and guaranteeing the best possible performance of IT equipment.

The service segment is the fastest growing. The category's growth can be attributed to the introduction of new services by the major market participants. In June 2022, Schneider Electric announced the "modernization" of Ecostruxure IT, their infrastructure management tool, and provided a more efficient prefabricated data center solution in Europe. Schneider will provide prefabricated containerized data centers under the trademark "Easy Modular Data Center All-in-One." These data centers, constructed at Schneider's Barcelona factory, will have power capacities ranging from 27kW to 80kW.

The market is segmented into Large Enterprises and SMEs based on enterprise size. 

The large enterprises segment will dominate in 2023. The sector is found to maintain its position consistently during the entire predicted period. Large corporations may experience varying computer requirements. The modular design of Micro Data Centers enables enterprises to easily adjust the size of their IT infrastructure according to demand, offering a cost-efficient solution for flexible business needs. Furthermore, they frequently want resilient networking solutions. Micro data centers with edge networking capabilities ensure optimum connectivity, facilitating effective communication between the scattered data center nodes and the more comprehensive company network.

The small and medium-sized enterprise (SME) segment is the fastest growing. The expansion of this sector is credited to the rising acceptance of MDCs for safeguarding data and ensuring adherence to industry regulations. Additionally, the escalating utilization of MDCs in small and medium-sized enterprises (SMEs) as adaptable, scalable, and economical IT infrastructure solutions contributes to this growth. The redundancy capabilities of MDCs, such as backup power and data replication, effectively mitigate the risk of downtime. Moreover, the flexibility of MDCs in terms of hardware and software configurations enables SMEs to customize their infrastructure according to their precise requirements.

Based on rack unit, the market is segmented into Up to 20 RU, 20–40 RU, and Above 40 RU. 

The above 40 RU segment dominated in 2023. The expansion of this sector can be ascribed to its extensive scope and increased capabilities to accommodate larger establishments. Companies like Schneider Electric, Vertiv Group Corp., and IBM provide micro data centers that accommodate over 40 rack units (RU). Schneider Electric unveiled a cutting-edge cooling solution for edge and micro data centers in March 2020. This method enhances cooling efficiency while reducing operational costs.

The 20-40 RU segment is the fastest growing. The increasing demand for a small-scale micro data center equipped with a condensed facility that includes features like efficient cooling, uninterrupted power supply, and storage systems is driving the expansion of the 20-40 RU segment in the projected timeframe. Due to the growing need, many organizations are introducing 20-40 RU micro data centers. In November 2020, Schneider Electric launched the R-Series durable micro data centers, available in sizes of 24U and 42U. The EcoStruxure R-Series complies with the dust and moisture protection criteria set by the National Electrical Manufacturers Association (NEMA) and International Protection (IP).

The market is segmented based on applications such as remote office and branch offices, instant data centers, and edge computing.

The edge computing segment dominated in 2023. Micro data centers are specifically engineered to manage edge workloads efficiently. They offer the essential computational power, storage, and networking capabilities to locally process and analyze data, reducing the requirement to transmit substantial data to centralized data centers. Additionally, they assist in performing data processing and analytics locally at the edge. This is especially advantageous for applications requiring immediate and up-to-date understanding, such as video analytics, predictive maintenance, and machine learning performed at the edge.

The instant data centers segment is the fastest growing. The segment's significant market share can be attributed to the increasing adoption of easily installed and highly portable instant data centers across businesses. This is driven by the growing demand for instant data centers that offer better service, greater reliability, and lower costs than traditional data centers. Additionally, providing low-latency computing capacity closer to applications enables faster real-time data processing.

Based on industry vertical, the market is segmented into Energy, Colocation, BFSI, Government, Industrial, Healthcare, IT and telecom, and Others. 

The BFSI segment dominated in 2023. Banking, Financial Services, and Insurance (BFSI) firms handle confidential consumer and financial information. Micro data centers can be outfitted with sophisticated security measures like encryption, firewalls, and access restrictions to guarantee data protection and adherence to regulatory mandates. Furthermore, the modular architecture of Micro data centers enables BFSI firms to expand their IT infrastructure by fluctuating computational requirements. The capacity to adapt is crucial for managing variable workloads, particularly during periods of high transaction volume.

The IT and telecom segment is the fastest growing. Telecommunication providers can establish small-scale data centers at the periphery of their networks to provide Mobile Edge Computing (MEC). This facilitates expedited processing of mobile services and apps, enhancing mobile consumers' performance. Therefore, this is anticipated to stimulate market expansion.

The healthcare segment is the second largest. The healthcare industry can use a micro data center to enhance flexibility, efficacy, security, and cost-efficiency. The expansion of the global healthcare industry is expected to fuel the need for micro-data centers. The proliferation of IoT devices, particularly smartphones, amplifies the need for micro-data centers in the healthcare sector. Patients desire the ability to interact with their healthcare institution according to their preferences. These healthcare gadgets provide the secure transmission of enhanced data throughout every stage of care, contributing to the ongoing enhancement of patient satisfaction and health results. 

Recent Developments

• April 2024– Vertiv (NYSE: VRT), a worldwide supplier of essential digital infrastructure and continuity solutions, unveiled the Vertiv™ SmartAisle™ 3. This micro modular data center system harnesses the capabilities of Artificial Intelligence (AI) to deliver advanced intelligence and optimize operations in data center environments.
• March 2024– Avant Technologies, a firm specializing in AI infrastructure solutions, revealed its intention to construct its inaugural data center in Milwaukee, Wisconsin, specifically focusing on AI technologies. The forthcoming micro data center is tailored explicitly for private cloud enterprises in AI and big data industries. Its anticipated launch is scheduled for the first half of 2025.