The continued buildout and optimization of digital infrastructures will drive a renaissance of distributed IT capacity, 451 Research believes, potentially outweighing the ongoing consolidation of networked closets and server rooms. Emerging edge computing trends, including the Internet of Things and distributed cloud, are set to drive a new wave of edge datacenter demand. Organizations will increase capacity closer to users and connected machines to address increasing data volumes and mitigate the cost of subpar response times, let alone downtime. Their datacenter requirements will be dictated by data: speed of access, volume, availability and protection.

To address these needs for localized capacity, micro-modular datacenters (MMDCs) will likely become a key component of future IT infrastructures. Self-contained, highly integrated and compact, MMDCs are quick to install, easy to deploy and operate remotely from virtually anywhere – a step change from existing networked closets and server rooms. In time, we expect that there will be deeper technical integration of MMDCs into non-datacenter sites that have existing critical power and cooling systems, such as telecom points of presence (where carriers and service providers interconnect), subscriber central offices and cellular base stations, commercial high-rise buildings, healthcare facilities, production plants, transport hubs and the utility electrical grid itself (substations).

Micro-modular embedded datacenters are one of more than a dozen technologies that we are evaluating as part of our upcoming Disruptive Technologies in the Datacenter report, a follow-up to our widely read and referenced 2013 report.

The 451 Take

Micro-modular datacenters are not new, yet adoption to date has been sporadic at best. As IT infrastructures, including those supporting cloud services, continue to spread out in support of local data and computing needs, 451 Research believes that MMDCs will be rediscovered as the ideal choice for their speed and ease of installation virtually anywhere. We expect that more MMDCs will be sited inside buildings, on rooftops, with telecom gateways and base stations, outdoors, and other places. Distributed MMDCs that are embedded in urban and industrial environments and connected with software controls could open up new business models for suppliers, property developers and their partners with different ownership, leasing and managed service offerings. For colocation and other datacenter service suppliers, as well as telcos, offering distributed datacenter capacity via MMDCs could be a potential new revenue stream. Given the ongoing cost optimization of next-generation networks and the digital services that run on them, distributed embedded MMDCs seem to be inevitable. Those that move sooner will likely gain an edge over their peers.

Technology and context
While large centralized datacenters are growing in number and scale, a trend that we think will continue, most local sites will remain, albeit transformed. Even with the rapid increase in (wide area) network access bandwidth, realized speeds remain insufficient to move large data sets around on demand. Reliability and availability of network connections are lacking and cannot be relied on for applications that require uninterrupted accessibility. The cost to move large amounts of data can also be unfeasible. This means that demand for locally running applications and data stores will remain even in the face of the centralization of core systems.

We anticipate public and private cloud-based digital services to be no different and, contrary to some views, to ultimately generate demand for even more local capacity to optimize the delivery of cloud-originated services (also including CDNs), as well as get data from users and the myriad connected machines.

MMDCs will likely play a central role in making this new generation of distributed sites viable. A form of prefabricated modular datacenters, MMDCs encapsulate the IT rack and supporting facilities infrastructure into a self-contained cabinet (or row of cabinets). There is no open white space – even if the units are housed in a dedicated facility, let alone on the floor of a warehouse or outside an existing building. But this is exactly what the idea is about: there is no need to create a shared and conditioned macro-environment that existing datacenters (or, indeed, networked closets and server rooms to a lower standard) have in the IT space. This does away with much of the build and operational complexity and costs associated with such environments. It is also faster to deploy and can be financially leaner than traditional macro-environments on a small scale.

MMDCs offer an upgrade path to existing networked closets and server rooms. Performance can be anywhere from a few kW to above 40kW per rack – multi-rack MMDCs can address even larger requirements. Typically, the cooling and climatic controls, as well as power distribution and network connectivity, will be built in – other integrated functions, including biometric physical security, fire suppression, shock absorption, shielding against electromagnetic interference, power conditioning and UPS or battery, may also be provided. In some cases, IT systems will also be incorporated into and supplied with the design, and the entire unit may be optimized and managed for specific purposes such as HPC, very low-energy computing, cloud services or analytics.

Embedded datacenters

Moreover, MMDCs will support emerging edge applications on non-datacenter sites, such as manufacturing plants, healthcare complexes or large office buildings and university campuses. When equipped with shells that are dust- and water-tight, MMDCs can be installed anywhere in a building, from the basement to the rooftop. Some of these installations will make use of the preexisting critical power (such as UPS systems, generators or switchgears) and, wherever possible, cooling infrastructure (e.g., chilled water) on these sites, 451 Research predicts.

In the future, MMDCs are likely to be managed in an integrated way, as well: tapping into preexisting building and infrastructure management systems that aggregate data streams from and control multiple domains of operation. This physical and logical integration of the datacenter and support of a larger infrastructure is what we call the 'embedded datacenter.'

In a high-density urban area, spreading out datacenter capacity across dozens or hundreds of sites, as opposed to concentrating it, would allow the urban infrastructure to absorb a substantial amount of IT capacity. Telecom sites, commercial high-rises, retail outlets and urban rail systems have ample electrical capacity to support an urban grid of MMDCs. Such an approach could locate digital services close to companies and consumers at a large scale, driving lower response rates and overall performance for the money.

Drivers of adoption
The use cases and workloads are too numerous to list comprehensively. Below are four drivers for an edge presence that apply to MMDCs embedded into other infrastructures:

  • Requirement of data/services availability: Many systems on which mission-critical operations rely, such as healthcare patient data repositories, manufacturing control and data, trading centers and transportation control systems, are not well-suited for central sites even if redundant high-bandwidth network connections are in place.
  • Data is heavy: Data has weight. The amount of data some applications generate is simply too much to lift and shift economically, let alone store and process on a public cloud infrastructure. Video production, 3-D computer-generated imagery, various technical computing tasks such as electrical and mechanical engineering simulations, and high-performance scientific computing are some major examples of workloads with very large (ranging from a few terabytes to many petabytes) data sets.
  • Data security/business continuity: A concern about public cloud infrastructures is the overconcentration of capacity in the hands of few operators. This can add risk, including the attractiveness of public cloud datacenters as a target for nefarious attacks.
  • Demand for high-speed networks and services: Users fully expect fast and reliable networks and services wherever they go. The edge of the network, whether local or wide area, is under strain from the growth in high-speed connections and traffic volume that can clog access points, switches and internet links unless local equipment is upgraded on both the end-user and service-provider sides.
Impediments to adoption

Barriers to widespread adoption of MMDCs are both capital and operational. There are many billions of dollars' worth of investment in core datacenter sites and there is ample ongoing building activity to supply new capacity in and around metropolitan areas. The use of MMDCs outside existing secure and well-connected space will likely appear to be – and perhaps be – an added complexity.

In this light, small and microsites may at first seem uneconomical and unnecessary compared with larger core sites. MMDCs also represent a wholesale forklift upgrade over existing network closets and server rooms and at the cost of tens of thousands of dollars each, they may be considered expensive, despite the high level of functional integration (or rather because of it, as pre-engineering and integration makes many 'hidden' costs visible). Additionally, an MMDC is a complete departure from the prevailing practices and expectations of what a datacenter is and how it looks, a soft factor that should not be underplayed in the short term.

Operationally, MMDCs also represent a major departure from most existing facilities. For example, there is very little thermal capacity to absorb excess heat in the constrained space of a module should cooling fail. Some designs – but not all – offer an emergency venting option to address this. Also, with some designs it is difficult to access the back of the IT systems without shutting them down. Serviceability of live equipment can also be an area of concern for operators that don't or can't migrate workloads off of a MMDC for the duration of maintenance.

To penetrate densely populated urban areas, the biggest challenge is how to scale the number of embedded sites. It will take long-term cooperation and planning between property developers, utilities, telcos and datacenter operators (and in some cases, planning authorities) to build out a network of embedded datacenters. Although making a building MMDC-ready should be relatively inexpensive – the additional fiber connectivity, internal cabling and ducting work is marginal in most cases compared with a dedicated facility – the developer will expect payments and some level of commitment to future income for its efforts years in advance of commencing operation. Scaling to many properties and across cities would quickly add up to a significant financial and organizational burden for operators. Without visibility into demand for such capacity, justifying the business case for investments in distributed embedded urban sites could be challenging.

The 451 Group's research into the disruptive impact of micro-modular embedded sites is ongoing, and our assessment will be published in mid-2017. We welcome informed input on this and other disruptive datacenter technologies we are evaluating, including silicon photonics, DMaaS, direct liquid cooling, chiller-free datacenters, post-silicon devices, distributed resiliency and microgrids. Please email [email protected] to participate.
Rhonda Ascierto
Research Director, Datacenter Technologies & Eco-Efficient IT

Rhonda Ascierto is Research Director for the Datacenter Technologies and Eco-Efficient IT Channel at 451 Research. She has spent more than 15 years at the crossroads of IT and business as an analyst, speaker, adviser and editor covering the technology and competitive forces that shape the global IT industry. Rhonda’s focus is on innovation and disruptive technologies in datacenters and critical infrastructure, including those that enable the efficient use of all resources.

Daniel Bizo
Senior Analyst, Datacenter Technologies

Daniel Bizo is a Senior Analyst for Datacenter Technologies Channel at 451 Research. His research focuses on advanced datacenter design, build and operations, such as prefabricated modular datacenters, highly efficient cooling and integrated facilities and IT management to achieve superior economics.Daniel is also a regular contributor to 451 Research's silicon and systems technology research in the Systems and Software Infrastructure Channel.

Keith Dawson
Principal Analyst

Keith Dawson is a principal analyst in 451 Research's Customer Experience & Commerce practice, primarily covering marketing technology. Keith has been covering the intersection of communications and enterprise software for 25 years, mainly looking at how to influence and optimize the customer experience.

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