Straits Research published report, “Modular Data Center Market Size & Outlook, 2026–2034.” According to the study, the market size valued at USD 34.84 billion in 2025 and is projected to expand to USD 143.08 billion by 2034, registering a compound annual growth rate (CAGR) of 17.2%.

Market Dynamics

The Modular Data Center Market is driven by the growing requirement for versatile, energy-efficient, and rapidly deployable IT infrastructure to manage growing digital workloads. The data explosion generated by IoT, 5G, and AI-powered applications has led to businesses and hyperscale providers adopting modular approaches to enhance scalability and lower capital costs. The sector also benefits from expanding demand for prefabricated, plug-and-play data centers that decrease on-site build time and decrease deployment duration by up to 50%.

Sustainable data infrastructure, green energy use, and digitalization promotion policies by governments in countries such as the U.S., Germany, China, and India are the main market growth drivers. Strategic investment in edge computing, in conjunction with the growing uptake of module-based micro data centers in rural and underserved regions, is creating new avenues for growth. Furthermore, heightened emphasis on circular economy principles and module-based design standardization is driving innovation across component manufacturing, deployment methods, and lifecycle management.

Market Highlights

• Segmental Leadership: Prefabricated Data Centers hold the largest share (44.37%), while Management Software & Automation technologies record the fastest CAGR (18.92%).
• Deployment Outlook: Edge Deployment segment dominated the market in 2025 with a revenue share (39.74%), driven by the surge in IoT and 5G infrastructure expansion.
• Application Outlook: The Telecommunications segment is projected to grow at a CAGR of 17.85% during the forecast period, fueled by exponential data traffic growth and the expansion of cloud and mobile networks.
• Regional Insights: North America leads the market with over 36.25% share in 2025, supported by hyperscale data center investments and rapid cloud service expansion.