A massive increase of data centers contributes immensely to the world uninterrupted power supply (UPS) market. Power in data verticals such as IT, telecom, healthcare and finance is critical; even a few seconds of downtime could mean huge loss for these industries.
New analysis from Frost & Sullivan (powersupplies.frost.com), World UPS Market, finds this market earned revenues of $6.25 billion in 2006 and estimates to reach $11.11 billion in 2013.
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The below-5 kVA segment expects to grow faster than any other segment due to the increasing number of data centers around the globe. The market also expects to advance from the overall technology enhancement within various business verticals. This results in an estimated 300 percent growth of power density for computer-related equipment.
“These power-hungry devices increase load expectations on UPS equipment, causing manufacturers to come up with more efficient products,” notes Frost & Sullivan Research Analyst Anu Cherian. “Also, increase in customer awareness prompts demand for products with greater flexibility in both service and solutions.”
This places huge demands on market participants from all tiers, especially Tier 1, to deliver low-priced products with longer backup runtime, more scalable solutions, smaller footprints, and redundant stackable or rack-mountable solutions.
Tier 1 competition is a highly aggressive, price-sensitive, customer-relationship oriented and brand-equity driven structure. As a result, pressure mounts on vendors to provide economical and exceptional quality products with service and monitoring capabilities. This is a tough task, especially when one considers the increasing price of raw materials and rising bargaining power of customers.
“The fear of low margins should not cause a vendor to compromise on the quality of the product,” states Cherian. “Vendors should be aware that clever pricing decisions accompanied by a robust product with proven efficiency and reliability would earn them credibility as well as profits.”
Although there is not much product differentiation, companies that sell cutting-edge technology or a whole package with additional service and benefits such as discounts are likely to survive. Top vendors in this market that have superior products, a good portfolio of sales channels and prompt after-sales support will have an edge.
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