The seemingly-unstoppable growth of hyperscale data centers could be halted, at least in metropolitan areas, according to a new analyst report.

The next big change in the data center industry could be a wave of micro-modular datacenters (MMDCs), embedded in other buildings such as offices, according to The Next Wave in Omnipresent IT: The Embedded Datacenter, a report from 451 Research. As resources such as power, property and IT budgets become scarcer, the new model of MMDCs could lead the way to shrinking the data center into manageable units.

The data center in the next room

The next stage of evolution, the analyst predicts, will involve fitting data center equipment around existing company infrastructure and even embedding functions into departmental systems.

“The look and feel of a micro-modular site is dramatically different than a traditional datacenter,” said report author Daniel Bizo, a data center analyst at 451 Research. “Everything is pre-installed - cooling and climatic controls, power distribution and network connectivity, physical security, fire suppression and shock absorption. But they can go further. The next stage is for them to be embedded, which involves deep integration into urban infrastructures.”

Dense, highly regulated urban areas will ultimately place a ceiling on data center growth. So the functions will have to be broken up in some cases, Bizo says.

MMDCs allow for an alignment of capital spending on data center capacity that is much tighter than traditional practices. Such an approach can also help operators avoid the mismatch between the facility and IT systems, lowering stranded capacity and nonperforming capital. The real impact will be made not in the replacement or displacement of existing or legacy infrastructure, but in the extension of it, according to Bizo.

Most of today’s digital infrastructure is too clunky and inflexible to fit in with the rest of the company. Data center facilities are separated from other infrastructures to a great extent and form their own physical shape. Facilities, roads, car parks and utility connections all need to be built or upgraded, maintained, secured and operated – which is proving painfully expensive, according to Bizo.

That needs to change, says the report. The embedded datacenter has the opposite effect to today’s behemoths, says Bizo. Embedded data center design is about physically integrating the fast-growing digital infrastructure with other infrastructures in a more systematic way than before.

Though the concept of putting IT on-premises is not new, there could be some resistance to this new data center dynamic, Bizo warns. “The embedded datacenter is a complete departure from the prevailing practices,” said Bizo. There are will be business barriers too. Long-term cooperation between property developers, utilities, telecommunication companies and datacenter operators is needed to build out a network of embedded datacenters.

But competitive market forces can trigger a change, 451 Research believes. “Central data centers are filling up quickly, and it is hard to come by a suitable property for further development in densely populated metropolitan markets – allowing operators with such strategic locations to harvest premium. As demand grows, micro-modular embedded data centers can attract the attention of some MTDC operators to break into high-value markets,” says the report.

As cloud service providers need to differentiate in an increasingly saturated market and move mission-critical workloads close to the customer, embedded technology would be an advantage that competition couldn’t replicate for years.

“These possibilities should be attractive enough to make at least some property developers,” said Bizo, “MTDC operators and service providers consider this.”