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The power, the pain

The power, the pain

At 10:33pm an electrical signal travels down the grid to a block of units at 114 Harpole St, Geelong. The hot water system turns off. This sends a minor spike throughout the building's electrical circuit, not strong enough to affect most standard electrical appliances. A clock radio picks up 0.003 of a second. The spike mimics a signal that is registered by a PC's CPU. It sends a signal to the internal modem, which relays it to the local ISP. The ISP's Web server doesn't recognise the signal, resulting in a terminated connection.

At 10:47pm a man using the PC to upload a sales report to the US fires up another application. The combined effects cause the PC to hang. Despite repeated attempts to "End task" the computer crashes, leaving the man to curse the latest edition of whatever software he's using. He's missed his deadline. The following day he gets fired. Without an income he can't afford payments on his new Porsche, and his fair-weather wife files for divorce. She takes half his net worth, the children, the house, the dog and . . . well, you get the picture.

It's a hypothetical that would stump Geoffrey Robertson. What exactly set off the chain of events that led to a homeless man wandering the streets, cursing evil software companies, incompetent ISPs and a capricious wife?

In UPS circles it's akin to the doomsday scenarios now replacing the "a car hits a power pole" or "what happens when a bolt of lightning strikes a sub-station" variety. The fact is, as IT visionaries espouse the benefits of business continuity and a "work anywhere" mobility, the majority of corporations, and certainly the growing army of SOHO enterprises, have been dazzled by the bright light promises of IT, all but ignoring what makes it all go round in the beginning -- power protection.

It's a message that has seen the UPS market evolve in line with a solutions-focused IT industry. Never before has business uptime and availability become so important in a network-driven economy. And never before has power protection been able to lay claim to being the linchpin of that mantra.

According to Russell Perry, marketing manager of Emerson Network Power, formerly Liebert, UPS vendors are making the transition from being a battery supplier to an end-to-end power protection solution provider.

"We, like our industry colleagues, also known as competitors, are all heading in the same direction. And that direction is pulling together all the disparate threads of power quality into a complete solution," Perry says.

So how does this translate into market opportunities for resellers? Basically it's a point of leverage. With UPS vendors pumping large volumes of money into technology and the marketing programs to match, savvy resellers stand to gain if they can take that message to their clients. It's a marriage that can prove faithful in these times where vendors blur the line between direct and indirect business.

According to Leanne Cunnold, managing director of APC (American Power Conversion), power protection forms the foundation for business availability. APC has traditionally been a strong player in the medium-to-large corporate UPS markets, although it has just released a new range of consumer-focused UPS systems designed for SME and SOHO markets. Cunnold expects major growth to come from this sector as more people work from home offices and recognise the importance of protecting their PCs from power-related issues. However, SME and SOHO users "have different needs" such as wanting to use UPS systems to ensure PCs are closed down correctly so no data is lost.

Further education

Getting this point across to end users is largely up to the channel. "The point of influence is still at the reseller level. A lot of resellers know about power protection but they still need to be recommending it automatically," Cunnold says. "When resellers recommend a UPS it does two things: it provides incremental revenue and it prolongs the life of systems. It cuts down on the maintenance requirements of systems and leads to increased customer satisfaction and loyalty."

One Sydney-based systems integrator takes the issue a step further. Neville Mundy, director of Lanrex, believes a reseller is bordering on being "unprofessional" if it doesn't suggest an appropriate power protection strategy with every bit of hardware it sells. "It's called operating in good faith with the customer," says Mundy.

"If you have a customer that says 'give me a server', what they're really saying is 'give me a solution'. They don't want the potential [power] problems that go with it, they just want it to work."

Combine this with the current service-centric environment of the business world and resellers have to know how to best position a solution with a customer. "You always position [a sale] with the financial controller because they hold the purse strings," indicates Mundy.

If a customer is going to purchase a $12,000 UPS system then they have to be able to see the value in it. That value is best illustrated by asking how much it would cost a company if it was forced to endure a four-hour period without power, says Mundy.

"I always say, if you've got a black-out and that customer you've been chasing for months finally decides he's going to spend his money with you, but he can't because your network's down, then can you afford not having a proper UPS system in place?"

Emerson's Perry says resellers have to consider everything from where the power is first generated or accessed to what CPUs are being used. The solution doesn't necessarily mean a UPS. In many cases, it's a question of adequate wiring. Cabling has changed over the years and while most buildings now follow the AS3000 standard for electricity cables, this can conflict with legacy cabling standards.

"Upstream protection doesn't mean diddly-squat if your cabling is insufficient," says Perry.

Insufficient cabling can also exacerbate the interference of other electrical appliances connected to the building's electricity circuit. "Contrary to popular belief, most power anomalies don't occur at the utility supply, but within the walls, floors and corridors of office buildings, manufacturing sites and businesses," says APC's Cunnold. "A reduction in the power quality, caused by something as simple as cable damage, can cause the malfunctioning of system components, corruption of network data, lapses in data security and losses of business-critical information."

Identifying power issues

Both Emerson Network Power and APC offer on-site surveys to help resellers specify what power solution the customer requires. APC is also in the process of rolling out a new service that measures the power usage or power draw of a customer's premises over the course of a standard day. From this, resellers can accurately diagnose what power quality issues a customer has, and how best to address them.

James Fraser, business development manager for MGE UPS Systems Australia, says the biggest problem resellers have is seeing where the UPS should fit into the network and how big the UPS needs to be to solve a customer's power quality issues. "Sizing is the most important factor," Fraser says. "Resellers should have a basic understanding of how that works."

He claims that while hardware is important, after-sales service and support is the most critical differentiator among vendors. Warranty and maintenance contracts, fast replacement agreements for broken and DOA (dead on arrival) UPS systems, and telesales features that alert resellers or customers to when batteries need to be replaced, are all crucial for a channel company's success.

Lanrex has been in business since 1987 and has a proven track record selling power protection. Mundy claims the hottest sector of the UPS market at the moment is the centralised management of power protection policies. Centralised management allows UPS technology to become part of a larger disaster-recovery process, where head office systems are protected at all costs so that branch offices can continue to function, regardless of what happens to the head office location.

Another advocate for the centralised management of UPS systems is Alan Hughes, product manager for M+H Power Systems, which distributes the Nikko brand of UPS systems in Australia. He says centrally managed UPS solutions are particularly useful for companies with a number of branch offices.

Using SNMP (standard network management protocol) cards to plug UPSes into management platforms, resellers can provide customers with a complete view of their power protection capabilities. "It's not just knowing something has happened, customers want to know what's going to happen," Hughes says.

Reliance on hardware

The UPS market is fairly dependent on hardware sales. In a flat hardware market there are fewer people buying UPS systems. As a result, Hughes says the biggest opportunity in the current market is for resellers to go back to customers and "retro-fit" existing UPS systems with SNMP cards and hook them up to the company's network. He claims the majority of standalone UPS systems have alert, messaging and other features built in that can be exploited when centrally managed over the LAN.

Retro-fitting UPSes with software features and network connectivity is ideal for industries like banking or retailing, Hughes says, which have a lot of customer contact over the Web and operate 24 hours a day.

Multi-pronged attack: a power protection strategyTransient volt surge suppression unit: Typically the gruntiest UPS box, placed as close as possible to the gridDiesel generator or micro turbine: Power replacement for sustained periods of no supplyUPS systems: For critical servers, switches and or systems -- either as standalone boxes or networked, they are especially important for all DC systemsClimate control: Air conditioning to regulate computer/server room temperatureCentral management: Software and SNMP cards that allow UPSes to be plugged into network management platforms for centralised monitoring and periodic battery testingPost-sales service: Fast repair replacement for broken or DOA UPS systems, sound warranty agreements, ongoing maintenance contractThe state of electricity supplyAccording to a 1999-2000 NSW Electricity Network Management report, there were a total of 1393 reported complaints about distribution reliability -- power failures, the duration of the failures and the number of power interruptions. On average, people in CBD locations went without power for around 112 minutes during 1999-2000. In rural areas, this figure was 138.3 minutes for the two-year period.

The report states that a further 2196 complaints were lodged in 1999-2000 concerning the quality of electricity supplied -- voltage and current complaints and other quality issues such as noise and interference. Over 71 per cent of these complaints were related to voltage issues, such as under-voltage, over-voltage, voltage fluctuations and voltage drops.

A similar report produced by the Office of the Regulator-General, Victoria, for the first half of 2001, found statewide reliability had declined compared to the same period in 2000. The average customer experienced 87 minutes without supply in the six-month period, 4 per cent more than the year before.

However, the Electricity Distribution Business Comparative Performance Report found the total number of complaints had actually decreased 10 per cent in Victoria compared to the previous year, to 1.34 complaints per 1000 customers.

The supply of electricity to the retail market, defined as homes and offices that use less than 160-200 megawatt-hours per year (or roughly spend under $20,000 per year on electricity), is overseen by state-based regulators.

Under the old system, all customers purchased electricity from a designated vendor at a regulated price. Since deregulation of the wholesale market began in the late 90s, the state regulators have been working on implementing a process whereby all customers have a choice of electricity supplier. The choice of supplier from competing electricity vendors is called "contestability". The timetable for contestability at the retail level is set by each state government.

According to a spokesperson for the Australian Competition and Consumer Commission, NSW and Victoria have moved to full retail contestability as of January 1 this year. South Australia is on track for full contestability in 2003, followed by Tasmania in 2007. Queensland has indicated it won't look towards full contestability in the near future and a question mark hangs of ACT's plans.

As published in ARN, March 6, 2002


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