Modular Data Centers to double contracted capacity, enter new markets

Amid heated market demand for its pre-fabricated compact modules, Brazilian firm Modular Data Centers forecasts that it will double its contracted capacity for datacenter projects this year to 24MW, as it also mulls entering new markets.

“We have great perspectives for this year. Our main goal for this year is to finish delivering our first large batch of contracts. We're also negotiating with new customers and partners,” CEO Carlos Piani told BNamericas.

With regard to the deliveries, Piani said that clients have placed new orders with Modular for its existing products.

Also on the company's radar are expansions to other geographies, both in Latin America and elsewhere, on the back of the development of new sites by key customers and potential new ones. 

The US and Europe are two of the new frontiers that Piani plans to explore in 2024. In Latin America, the chief markets and opportunities are in Brazil, Mexico and Chile.

"We have the ambition to become the world's biggest provider of modular solutions. It's step by step to get there, but that's what we're aiming at," said Piani.

Modular's main client is DigitalBridge's Scala Data Centers, with whom it has a long-term alliance as part of Scala's FastDeploy datacenter building strategy.

In 3Q23, Modular completed the delivery of a first set of modules for Scala’s 250mn-real (US$50mn) datacenter that is being built in Porto Alegre, Brazil.

Aside from Scala, Piani sees opportunities to supply other colocation providers, possibly Scala’s direct competitors in the field, in addition to selling directly to the cloud companies that are developing their own hyperscale sites. 

Enterprise projects continue to offer good prospects, although on a smaller scale, he said.

Last year, Modular also closed a regional partnership with US firm Vertiv covering Brazil, Mexico, Chile, Colombia and Peru.

The deal will see Vertiv contribute its thermal and power management solutions for critical infrastructure, while Modular will provide its expertise in the design, fabrication and integration of modular prefabricated datacenters (PFM).

Overall, Piani sees a persistent imbalance between supply and demand in the datacenter sector that modular equipment can help to cover.

The validation of Modular's products by Scala and the large cloud providers paves the way for the company to serve other markets and companies, said the executive.

Currently, Modular has a plant of around 50,000m2 in Santana de Parnaíba, São Paulo state, divided into warehouses and production lines, where it carries out preparation, integration, testing and assembly. 

The plant is now twice its original size, according to the executive. New factories in other geographies are not ruled out.

Modular also has more than 1,000 employees and it continues to expand this workforce. Several new hires are expected this year.

"There's no way we can deliver the volume that's being demanded if we don't have more people on board," said Piani.