Modular VS Hyperscale build strategies

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MODULAR VS HYPERSCALE BUILD STRATEGIES

The AI infrastructure boom is prompting organisations worldwide to rethink how they approach data centre development. With global AI demand expected to drive data centre power consumption to 3-4 % of total electricity demand by 2030, traditional slow-scaling approaches are no longer sufficient.

Two main build strategies have emerged: modular data centre design and hyperscale data centres. Each offers a different approach to delivering the high-density, GPU-optimised facilities that AI workloads require.

Red Engineering has delivered both types of facilities globally. As pioneers of the world’s first Uptime Institute Tier III certified modular data centre, we’ve helped shape how rapid, prefabricated deployment is applied at scale. By understanding the strengths and differences of each approach, your business can implement AI infrastructure that drives efficiency, supports growth, and avoids unnecessary limitations.

This article will provide a clear hyperscale data centre definition, outline the meaning of modular data centre design, and compare the two approaches across deployment speed, costs, scalability, and sustainability. By the end, you’ll have practical guidelines to determine which strategy, modular, hyperscale, or a hybrid of both, best supports your organisation’s AI infrastructure goals.

What is a hyperscale data centre?

A hyperscale data centre is a massive, purpose-built facility designed to support extremely large-scale IT infrastructure. 

These centres power cloud services, AI workloads, and enterprise-level data processing for companies such as Amazon, Google, Microsoft, and Meta. They often span hundreds of thousands of square feet, house tens of thousands of servers, and require tens to hundreds of megawatts of power.

Every aspect of the design focuses on efficiency and resilience. Power and cooling systems are engineered with built-in redundancy, while networks are designed to keep services available without interruption.

Automation and custom hardware streamline operations and allow hyperscale data centres to scale rapidly while maintaining operational reliability.

Construction of a hyperscale data centre is a major undertaking, typically running over 12-24 months and requiring careful planning across power, land, and connectivity.

While prefabricated elements may be used, a fully modular build is rarely practical at this scale. For that reason, hyperscale campuses are usually located just beyond city boundaries, where large plots of land and reliable power supply can be secured. Key global hubs include Northern Virginia, Dallas, Frankfurt, London, Tokyo, and Singapore.

Hyperscale data centres are best suited for predictable, large-scale, long-term workloads, such as AI model training, big data analytics, and global cloud services.

Modular data centre design explained

Modular data centres take a prefabricated approach to construction, using pre-engineered units that can be built in factories and delivered ready for installation. 

Instead of a single large facility, infrastructure is deployed in scalable modules that contain complete systems for power, cooling, networking, and IT. These can be used as standalone units or assembled into larger environments.

The biggest advantage of modular design is speed. Because modules are built offsite while site preparation takes place in parallel, deployment timelines can be cut by 20-30% compared to traditional builds.

This phased growth model makes modular design well-suited to fast-moving markets, AI clusters that need to be operational within months, or companies looking to expand incrementally.

Standardisation across modules simplifies operations and maintenance, while hybrid designs (where prefabricated power or cooling units are integrated into larger builds) are increasingly used even by hyperscale operators to accelerate delivery.

Key advantages of modular data centre design include:

• Speed to market - deployment measured in months, not years.
• Cost efficiency - lower initial investment and phased expansion reduce financial risk.
• Scalability - capacity can grow incrementally with demand.
• Sustainability - prefabrication reduces waste, emissions, and onsite disruption.
• Edge suitability - ideal for low-latency applications like IoT, 5G, and distributed AI.
  

Modular data centres aren’t built to replace hyperscale facilities, but they are ideal for organisations that need rapid deployment and adaptable infrastructure.

Comparing modular vs. hyperscale build strategies

Understanding the differences between modular and hyperscale build strategies helps organisations choose the right approach for speed, cost, scalability, efficiency, and sustainability.

Deployment speed

Modular data centres use prefabricated components that can be assembled quickly, often becoming operational within six to twelve months. Offsite construction happens at the same time as on-site preparation, so projects move faster. 

Hyperscale facilities take much longer, typically requiring multi-year planning and construction - although hybrid approaches with modular elements can cut delivery time by up to half.

Cost and investment

Modular design allows incremental investment, so organisations only spend on the capacity they need immediately. Standardised construction also provides cost predictability. 

Hyperscale data centres need significant upfront capital (often over £100 million) but achieve efficiency at scale once operational.

Scalability and flexibility

Modular units can be added, adapted, or relocated as needs change, making them ideal for edge computing or regional AI setups. Hyperscale centres are designed for massive, continuous growth and global-scale operations. 

While individual hyperscale facilities are less flexible, hybrid designs let modular components be added or shared across multiple buildings on the same site, improving capacity and adaptability.

Operational efficiency

Factory-built modular components ensure reliability and consistent performance. Incremental expansion reduces waste and energy use, and modules can be redeployed or repurposed. Hyperscale data centres rely on large-scale design, multiple power sources, backup systems, and advanced cooling to maintain continuous, high-performance operation.

Sustainability

Hyperscale data centres are very efficient at large scale and achieve excellent Power Usage Effectiveness (PUE), but their huge construction footprint and upfront carbon impact are significant. 

Modular data centres reduce waste and use materials more efficiently, as components are built in controlled factories and expanded only as needed. Modules can also be redeployed or repurposed, making better use of resources over time.

RED’s projects, like the Halk Bank data centre, featuring LEED certification and waste heat reuse, and the KKB Tier IV facility, with solar integration and LEED Platinum status, show how both modular and hyperscale builds can deliver outstanding sustainability results.

Choosing between hyperscale and modular

Selecting the right AI infrastructure approach depends on your organisation’s scale, growth expectations, deployment speed, and operational priorities. Hyperscale and modular data centres each suit different needs.

When to choose hyperscale:

Hyperscale facilities are best for organisations that require massive, centralised infrastructure and can plan for long-term growth. Opt for hyperscale if you:

• Need vast computing capacity for global cloud services, AI workloads, or extensive data analytics.
• Require highly customised infrastructure tailored to proprietary systems or specialised operations.
• Have predictable growth patterns that justify a large, long-term investment.
• Can allocate substantial upfront capital and accept longer construction timelines.

When to choose a modular data centre

Modular data centres offer flexibility, rapid deployment, and incremental expansion, making them ideal for dynamic or evolving requirements. Opt for modular if you:

• Need infrastructure operational quickly to capture immediate AI or market opportunities.
• Want to manage capital more carefully through phased investment and reduced financial risk.
• Require adaptability to new technologies or changing workloads.
• Are deploying edge computing or low-latency systems close to end-users.
• Need smaller-scale expansions, retrofits, or temporary infrastructure.
• Prioritise sustainability and efficient use of materials, with the ability to redeploy or repurpose modules.

The hybrid approach

Many hyperscale operators now integrate modular components for power, cooling, IT, and mechanical systems. This hybrid approach reduces construction timelines, enhances reliability, and allows hyperscale facilities to respond quickly to surging demand for cloud and AI infrastructure. 

A recent example is RED’s 40 MW hybrid data centre in Johor Bahru, Malaysia, which combined prefabricated power and cooling modules with a hyperscale campus design, achieving a PUE of 1.3 and LEED Gold certification.

Hybrid delivery also:

• Shortens construction schedules by performing off-site module assembly while site work continues.
• Reduces facility footprint, creating additional space for revenue-generating equipment.
• Improves quality and reliability through factory-tested modules.
  Simplifies regulatory compliance, as prefabricated modules are often treated as equipment rather than building structures.
• Boosts energy efficiency through optimised module design and thermal performance.

Choosing the right approach isn’t always straightforward. At RED, we’ve delivered hyperscale, modular, and hybrid data centres worldwide, and helped multiple clients assess their needs, define the optimal strategy, and execute projects with speed and precision. Reach out today to see how we can help your project succeed.

Building the right data centre strategy for scale and speed

There’s no one-size-fits-all approach - success comes from aligning your build strategy with your business goals, growth plans, and market positioning. Organisations that excel in the AI economy are those that select infrastructure strategies based on their competitive needs, not just industry trends.

RED Engineering’s expertise in both modular and hyperscale solutions allows us to guide organisations toward the strategy that best fits their requirements. From the first Tier III certified modular data centre to sustainable hyperscale campuses, RED has consistently proven that speed and scale can go hand in hand.

Whether you need rapid modular deployment or large-scale hyperscale capabilities, our integrated design and delivery capabilities ensure your AI infrastructure drives real business value.

Talk to RED today about how modular, hyperscale, or hybrid strategies can accelerate your AI infrastructure - and get a build roadmap aligned to your growth.