Modular Data Centers in the era of AI and Edge Computing
Interview with Peter Wäsch from STULZ GmbH
The German Data Center market is currently experiencing solid growth: According to the "Data Center Impact Report" published by the German Datacenter Association (GDA), installed IT capacity in the important colocation sector will grow to around 3.3 GW by the end of 2029, more than doubling in size. Peter Wäsch, Head of Modular Datacenter Germany at STULZ, explains why modular solutions are particularly benefiting from this boom and which approaches to AI and edge computing could define the market in the future.
The GDA forecasts growth of around 150 percent for the colocation sector by 2029. What opportunities does this create for modular infrastructures?
The overall strong market growth in the Data Center environment is also increasing the demand for modular Data Center solutions. Today, companies need to compensate for IT capacity constraints quickly and efficiently without having to accept long construction times and construction risks. Prefabricated solutions are usually ready for use within a few weeks, while conventional construction projects take several months or even years. Standardized solutions also ensure excellent predictability of investment costs and minimize construction and operational risks. By using modular systems, operators can start with a solid foundation and scale it as needed at any time without having to extensively redesign their existing IT infrastructure. This keeps IT flexible and allows it to quickly adapt to trends such as on-premise cloud and edge implementations. In the fast-growing colocation segment in particular, modular solutions also offer the flexibility needed to respond quickly to customer requirements.
What important developments shaped the modular sector over the past five years?
Modern modular systems are characterized above all by significantly higher power densities and lower unit costs. The power provided per rack has gradually increased from around 5 kW to over 20 kW in recent years. This means that there are no longer any reasons to avoid integrating high-density installations, even in compact outdoor enclosures. At the same time, economies of scale in series production have reduced the unit costs of prefabricated solutions. In general, standardized basic designs have reduced investment risks, even though the sector continues to thrive on strong customer focus and a high level of customization expertise. There is also a clear trend in cooling technologies: the use of Liquid Cooling in modular systems is steadily increasing and will certainly have a noticeable impact on future demand, for example in AI integration.
Where will the development of modular systems lead in the coming years?
Above all, I expect to see greater integration of AI-supported monitoring and control systems for predicting potential malfunctions and optimizing maintenance intervals. Circular-Economy approaches are also gaining importance in modular construction. The aim is to ensure that certain module components can be returned to the material flow at the end of their life cycle and recycled accordingly. Furthermore, Modular Data Centers can be increasingly integrated with 5G and edge infrastructures to enable low latency and decentralized AI applications.
The current KRITIS legislation is increasing the requirements for security and local data processing. What role do Modular Data Centers play in this context?
It is becoming increasingly important, especially for operators of critical infrastructure, to process sensitive data and systems locally and in accordance with the highest security standards. The KRITIS regulations restrict the use of cloud services, meaning that certain IT resources must be operated on-site. Modular Data Centers offer a decisive advantage here: They enable local computing power to be set up flexible, fast, and in a cost-efficient manner—tailored precisely to the respective regulatory requirements. This allows companies to expand their infrastructure as needed while reliably complying with legal requirements. Especially in combination with edge and AI applications, which require low latency and high data sovereignty, modular solutions are the ideal answer for a KRITIS-compliant infrastructure.
What role does sustainability play in prefabricated solutions?
Modular Data Centers offer several key advantages in terms of sustainability: They reduce material and waste compared to traditional building solutions and enable significantly higher energy efficiency thanks to optimized designs. Our CyberRow series, for example, can be combined with indirect Free Cooling to reduce energy consumption. For even higher power densities, advanced Liquid Cooling methods can reduce greenhouse gas emissions by up to 20 percent while being more water-efficient than traditional evaporative cooling systems.
AI workloads are driving power densities up massively. How is STULZ preparing for the increasing demands and growing popularity of Liquid Cooling?
Current developments confirm our strategy of focusing on Liquid Cooling at an early stage. Air Cooling reaches its limits at around 50 kW per rack, whereas Liquid Cooling can easily meet the power requirements of current AI systems, which are around 130 kW and well above that. Our direct-to-chip solutions can already cool 75 percent of the IT load, while the remaining 25 percent is cooled by our Air-Cooling solutions. In general, the integration of Liquid Cooling means that where five containers or outdoor enclosures may have been required in the past, one or two units with Liquid Cooling are now sufficient. The high level of compactness is a decisive factor here, as AI applications, for example, will increasingly be moved to the edge in the future.