Modular vs. On-Site Data Center Construction

What is Modular Data Center Construction?

Modular data center construction is an approach that involves pre-fabricating and assembling data center components off-site in controlled environments and then transporting them to the final location for deployment. These pre-engineered modules are designed for quick installation, scalability, and energy efficiency.

Modular data center construction gained popularity in the late 2000s to early 2010s, driven by rapid advancements in cloud computing, increasing data demand, and the need for faster, more scalable, and cost-effective infrastructure solutions.

Alternatively, on-site data center construction refers to the traditional method of building a data center directly at its final location, using conventional construction techniques. This approach involves designing, engineering, and constructing the facility from the ground up, often taking several months to years to complete.

On-site data center construction has evolved over time to adopt modern technology, efficient resources and innovative planning and has always been a reliable method of building.

Modular vs. On-Site Data Center Construction

There are six key areas which showcase the major differences between modular and on-site data center construction. These are:

1. Deployment Speed

Speed-to-market will always be an important consideration of data center construction due to the immense pressure by the industry to get these hubs online as fast as possible. In modular construction, components are pre-built and only require assembly onsite. This streamlines the process and allows deployment to occur faster (3-6 months) than traditional, on-site construction.

Building a data center from the ground up at the final site, issues a longer deployment timeline (12-24 months) due to considerations that can’t be avoided at the site, like permitting and environmental factors.

2. Scalability

In an ever-changing industry landscape, scalability is something that cannot be ignored. If a data center project involves a future-planned expansion, it will be easier to do so if it is a modular construction. Adding prefabricated modules does not require major construction, expansions or longer timelines, as would a traditionally built data center. However, owners and developers that designate hubs for specific purposes and don’t stray from those goals, do not have this concern.

3. Customization

Customization of data centers is critical because different industries, businesses, and workloads have unique requirements that standard, off-the-shelf solutions cannot fully address. A tailored data center ensures optimal performance, efficiency, security, and scalability for specific needs. Here is where traditional data center construction has the upper hand, as it can be customized at the initial stage of development. Designs in modular data center construction are typically standardized for efficiency so while some customization may be possible, it is very limited.

4. Initial Cost

Along with deployment timelines, cost is another factor taken seriously when deciding which construction method to utilize. Generally, modular construction offers lower total cost due to factory efficiencies, bulk material purchasing, and reduced labor. On-site construction tends to incur higher costs due to extended construction time, custom designs, and more skilled labor requirements.

5. Operational Efficiency

With the incredible power and cooling resources data centers require, it’s no surprise that this would be a differentiator to consider in building. Sustainability matters and modules are often designed with energy efficiency in mind, using pre-optimized cooling and power solutions. While data centers being built onsite can also be designed for high efficiency, this would not be automatic and require additional engineering to be incorporated from the beginning.

6. Maintenance

Maintenance is essential to ensuring a data center’s uptime, efficiency, security, and longevity. A well-maintained data center prevents downtime, hardware failures, cybersecurity risks, and inefficiencies, ultimately protecting business continuity and operational stability. It is easier to maintain repair and expand a data center by swapping or adding new modules for pre-fabricated designs. Data centers that have been built on-site however, may require shutting down entire sections for maintenance, making this process more disruptive.

Challenges and Solutions of Each Method

While modular data center construction offers speed, scalability, and cost efficiency, it comes with key challenges that need to be addressed. The biggest challenge is integration and compatibility—ensuring that pre-fabricated modules work seamlessly with existing systems. A solution for this is to establish standardized interconnection frameworks and custom API-driven software integrations for seamless data center management.

Unsurprisingly, the biggest challenge of on-site data center construction is long deployment time due to a lengthy development process and failed commissioning that result in rework and high capital expenditures. One way that owners and developers can shrink this timeline is by ensuring quality in the construction phase by employing technology like the Cumulus Quality Execution System to ensure quick and proper assembly of key components.

When to Choose Which?

For owners and developers to choose the correct approach in construction, it all comes down to the requirements of the project and the function of the data center.

Modular construction is appropriate if there is a need for fast deployment, scalability, cost efficiency, and a standardized setup. Some of the best-use cases for modular-constructed data centers are edge computing and cloud expansion.

Traditional, on-site construction is best when there’s a requirement for highly customized, large-scale, or long-term data center solution. On-site constructed data centers lend themselves to hyperscalers, AI computing and large enterprises, like financial institutions, healthcare, and government agencies.

Even though the industry will continue to evolve, both construction methods will continue to be necessary as data centers continue to emerge worldwide. The key differentiators examined above will dictate which approach is utilized at each development.