[KenB]

By modular, I take it you mean rack-sized UPS units. I have seen both used successfully, but in general a rack UPS strategy works well for small installations, while larger sites prefer central units. Rack units allow granular upgrades to capacity with small incremental cost, but battery swaps and equipment reliability take their toll when the number of units grows. Also, many shops cut costs by using switching units, which do not provide the power conditioning of online units. Here is a quick plus/minus list. Heat output depends on the relative efficiency of the units.

Central UPS

Plus:
Central control/monitoring
Central capacity upgrade point
Better overall efficiency

Minus:
High replacement cost
Problems affect entire data center

Rack UPS

Plus:
Small incremental purchase cost
Problems limited to single racks

Minus:
Time-consuming battery refresh
Switching units often used to cut costs
More devices = more failures

Others are welcome to chime in.