In recent years the uninterruptible power supply (UPS) has come out of the shadows and bloomed as an essential component, for everyone from the semi-pro home user and small business, through the SME space and of course into the world of the large enterprise.
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At the same time UPS has carved out a decent channel and customer base. However, with budgets being squeezed is there a danger that power protection will get less attention than it deserves? It's not only the economy that the UPS market has to fear, there is also the green IT movement and the drive towards virtualisation, how are these impacting upon reseller sales?
State of the market
According to Frost & Sullivan, the UK market for standard uninterruptible power supplies is in the region of €299m and expected to grow in western Europe as a whole at a rate of around 5.8 percent CAGR between 2007 and 2014. However, these figures could well be impacted by the current economic crisis, which is likely to hit the UPS market just as hard as any other.
Paul Tyrer, vice-president UK & Ireland with UPS firm APC, suggests that it all depends where you actually look. In smaller IT installations customers do not always consider power protection to be critical, Tyrer says and admits that any UPS purchase may be postponed until the IT budget is under less pressure.
"This sort of customer usually thinks about UPS protection only after there has been a problem with the mains power supply," Tyrer says.
He continues: "Generally speaking, IT users who have spent a day without email or the internet, suffered data loss or had equipment damaged as a result of a power outage do not need persuading about the importance of a UPS and the equipment will tend to be given a high priority on their IT shopping list."
Yet both small and home-based business are a growing part of the economy and must also be seen as a potential opportunity to the channel serving them.
"The challenge," Tyrer reminds us, "is for the channel to make the case for incorporating UPS into any server or workstation sale when money is tight and when the value of the equipment is not readily recognised."
In larger enterprises, where datacentres and computer rooms have a more central operational role, power protection can be thought of as more of an essential component of the physical infrastructure.
"Despite the current economic crisis," Tyrer insists, "these companies continue to invest in new equipment because their computing power requirement and the volumes of data they produce continues to rise."
Which might lead you to think that the channel just needs to maintain a strong relationship with end-users to keep the status quo. However, Tyrer warns that the channel could expect to come under price pressures with an expectation that the price of all IT and associated equipment is either soft or negotiable if demand is seen as being relatively weak. "More sales could be contested," Tyrer concludes, "as companies within the channel cast their nets into new territories in order to maintain the top line."
Meanwhile, Chris Smith, marketing director with datacentre and server room management specialists on365, is keen to point out that some, such as the retail sector, are finding that the financial crisis has had little effect on the business continuity investments that retail sector IT managers are making.
"The retail sector is still investing in this area," Smith reveals, "and in particular through the end of year sales period, where stock control was of high importance, business continuity was a widespread top priority for IT professionals." The bottom line is that everyone is battling the effects of the downturn and adapting to their business continuity requirements.
Routes for the reseller
So how should the reseller react in order to offset budgetary concerns and continue to make a profit out of selling power protection?
Smith reckons there are four routes for resellers to consider: offering lease or rental options, (although due to the banking crisis this may not be as easy as it once was); taking a solutions approach to the sale if you really know your area; making the argument for battery changes, management or improvements in efficiency; and finally, remembering that box shifting is a lowest-margin approach.
Ultimately though, it just all comes down to selling the UPS concept. Think in terms of people becoming pretty much used to the easy availability of continuous mains power, which is problematical when it comes to making the case for UPS.
But as Rob Tanzer, Technical Support Manager at uninterruptible power supply company Chloride, puts it: "UPS is a bit like insurance except that it is not compulsory and, fortunately, it is usually just a one off initial purchase cost with much smaller annual maintenance costs."
There is also the small matter of the whole green IT thing coming into play when trying to make the UPS sale nowadays, but is this a hindrance in terms of carbon footprinting or a positive thing for sales guys?
The power of being green
"When correctly used, a UPS can become part of a business' efforts to reduce energy bills and carbon footprint" argues Rob Morris, UK country manager with power protection system company Powervar.
"Many of today's UPSs have the capability to switch their output on or off at scheduled times" he continues "This gives users the ability to completely power-off equipment during times when it is not being used." Furthermore, Rob Tanzer insists, all UPS manufacturers are being pushed to produce ever greener and more efficient products.
"This can actually provide some great opportunities," Tanzer tells us, continuing: "Not only are certain UPS systems exceptionally efficient but they can also provide other benefits like power factor correction."
Certainly, on the whole, the modern UPS is much more efficient than the legacy item and especially so in part-load conditions. APC has published the efficiency curves of its models which show that, in datacentre applications, the UPS can consume as much as 12 per cent of the facility supply.
However, by simply increasing the efficiency of the UPS, a greater proportion of the supply is made available for data processing, both directly and indirectly, by reducing the equipment cooling requirement.
"It's possible that the replacement of existing UPS with newer, high efficiency models will," Tyrer says, "reduce the environmental impact as well as data centre energy bills." APC has also put into place programmes to help resellers have this kind of green conversation with their customers, created a carbon calculator to convert data centre energy use into carbon emissions and a UPS efficiency comparison calculator to make a side-by-side assessment of two UPS products and their carbon footprint performance.
OK, so green is good but what about virtualisation? Surely this must have a negative impact upon potential sales within the UPS market? Not so, says Tyrer. "One of the big issues with virtualised environments is that the availability requirement is stepped up from 4x9s or 5x9s to zero downtime which means, he insists that "the need for reliable power protection becomes more important."
There is a second aspect to virtualisation which merits discussion, namely the substantial energy saving to be achieved by optimising physical infrastructure including the UPS and cooling equipment at the same time as the servers.
"Post virtualisation, power consumption by the IT load will generally have reduced as a result of the physical consolidation of the servers," Tyrer explains, continuing: "By optimising power and cooling to minimise unused power capacity, these energy savings can be much less."
So by suggesting the use of scalable physical infrastructure, power protection and cooling can be sized according to the IT load requirement, energy wastage and therefore cost can be reduced. Chris Smith agrees that virtualisation is a good thing for the UPS reseller because "it causes densities to go up and existing power protection cannot always cope with the new set-up."
Tanzer also sees the positive side of the virtualisation argument, telling us that the introduction of blade servers "presents an opportunity for UPS resellers, as blade servers draw more power to operate, which in turn increases the level of power backup infrastructure required to protect the hardware."
Battery in a box?
Yet still, to some people, the UPS is still considered nothing more than a battery in a box. Is this fair? Unsurprisingly, Tyrer thinks not.
"Sophisticated software has been available for some time now, which enables software applications and IT equipment to be gracefully shutdown in the event of a prolonged power outage, protecting both data and devices from the spikes and surges which often accompany blackouts," he explains, adding: "In enterprise use, APC have recognised that UPSs form part of a thermodynamic cycle which includes both the powering and cooling of IT equipment. Its software applications are designed to enable enterprise-wide management of individual physical infrastructure components, as well as the protection and cooling capacities that they provide."
Tanzer agrees the market is moving towards a point where the UPS really can be considered to be a reliable power management tool. "The UPS continuously monitors power supplied to the system load and with remote monitoring it is possible to provide live and historical data on power usage," he says, concluding: "Certainly UPS systems can easily interface with BMS systems to provide additional features where required."
One thing that is often said of the UK in particular is that it has become a prime market for UPS thanks to the "dirty" power supply that many of us have to live with. But is this still true in 2009 and furthermore could it be used as the basis of a possible sales expansion into less developed countries with even dirtier electricity than us? Tanzer ponders that it is debatable as to what exactly constitutes a dirty supply.
"In the UK, a dirty supply might be one with many micro transients and spikes," he explains, "whereas in a third world country it would be a supply that is randomly on and off at all times." With most applications, the UPS battery life is only 10 to 20 mins and so the product is normally only a continuity bridge between mains fail and shutdown of the computer or a generator taking over. "A market for this type of product can only exist if there are critical loads that cannot be allowed to fail," Tanzer concludes, "either for reasons of life/safety or financial loss."
Morris, on the other hand, points to statistics which show that the UK grid has a reliability of 99.9% or no more than 9 hours of downtime a year due to power cuts.
"These statistics do not take into account other power disturbances, such as switching surges, noise and harmonics," Morris says, "if these events are factored in, the amount of downtime increases to approximately 79 hours." So maybe addressing the quality of the power is arguably more important than the issue of availability? A study by the IBM System Development Division concluded that 88.5% of AC power problems were transient-related, whereas power outages accounted for only 0.5 percent of equipment disruptions.
"What businesses need to understand is that the UK's grid infrastructure was designed to power industry," Morris argues, "it was not designed to provide the clean continuous power that today's digital economy demands. Electricity suppliers argue that critical users must bear the costs of ensuring supply quality themselves rather than expect the supply industry to provide a very high reliability supply to every customer everywhere on the network."
As finances become more restricted, resellers probably need to be able to demonstrate to the prospective purchaser that they are able to bring something extra to the table.
"Maybe there is an opportunity that UPS manufacturers do not have in that a reseller can become a one-stop shop for energy efficiency matters," Tanzer muses, adding: "As electricity prices increase further, which they surely will, there is more and more need for users to minimise their demands for power and to become more aware of what they can do to reduce their carbon footprint.
There will, therefore, surely be an increasing demand for power efficiency expertise."