Increasing dependence on the availability of mission-critical data, concerns over the quality of power caused by the deregulation of the Australian power industry, and greater requirements for clean power to run faster PCs should translate to a marked increase in UPS up-take. Yet an overall upswing in UPS sales still seems to allude the industry.
Circulating through the rumour mill is the notion that new generation high-powered PCs, with 1GHz-plus CPU speeds, are much fussier about the quality of power they receive and are far more susceptible to lock-ups as a result of power fluctuations.
According to Marco D'Agostino, product manager at Hitech Distribution, "the new generation of PCs definitely demand higher quality power. "Since the advent of P4s, which demand P4 certified power supply, cleaner, more consistent power is needed to run the machines," he said.
Some players attribute the newer PCs' greater demands for consistent power to a greater intolerance to dirty power. Yet the majority of UPS pundits concur that the latest generation of PCs are not necessarily fussier about the quality of power they receive, but more susceptible to losing much larger quantities of data if a power anomaly occurs because the sheer volume of data being stored and transferred has grown.
"Computers can transfer considerably more data per second than a few years ago," says Leanne Cunnold, general manager of UPS vendor APC Australia/NZ. "The risk of losing valuable data therefore increases exponentially as computers are able to process larger volumes of data. This means that ensuring clean power to the PC becomes critical, as even a small power interruption can result in a far greater loss than what was the case in the past. In other words, the faster the PC, the more data that can be lost should a power interruption occur."
Greg Jan of Opti-UPS agrees. "The CPU clock speed is faster, the BUS speed is faster, the memory speed is faster, and the hard drive speed is faster. There are greater amounts of data transferred inside the computer box than with the old Pentium or Pentium III, therefore a lot more data is exposed to the threat of loss due to a subtle power outage."
Michael Mallia, Invensys Energy Systems' general manager of sales and marketing, AC Power, believes that users are becoming more demanding in their requirements for data availability. "Our experience is that users in general are becoming less tolerant to the effects of power problems on their PCS."
Some players argue that the effects of "dirty" power on high-speed CPUs has been greatly exaggerated by the industry in a self-serving attempt to spur sales.
Upsonic Power managing director Paul Riva says, "Our experience with the new generation PCs is that they are no fussier about power vagaries, however, they consume more power than their predecessors. I think [the belief that high-powered PCs have fussier power requirements] was generated as an opinion; there is no evidence that proves this to be true. I think it's probably a marketing tactic used by people in the industry to try and stir up UPS sales -- part of the "marketing with fear" school of thought." Riva says that this "marketing with fear" methodology is too commonly exploited by the UPS market, and that "marketing with education" is the most useful method for inspiring consumer trust and demand.
The impact of deregulation
Another hot rumour making its way around the traps is that the deregulation of the Australian electricity industry, which commenced over seven years ago, has depleted the quality of the national power grid. Inaccessibility to information regarding the incident rate of power anomalies across the country over the last eight years makes it difficult to assess whether or not there is any merit to this claim.
"Power quality has obviously decreased over the last few years since the deregulation of the power supply industry and this has created greater customer demand," says Invensys' Mallia.
Hitech's D'Agostino agrees that the deregulation of the electricity industry has had an effect on the quality of the nation's power. "I think we've seen a lot more blackout and brownouts than in previous years."
"In February 2000, I was in Mildura when the government enforced power rationing in the region. Apparently this was because the Victorian government had signed a contract with the SA government to supply them with power. I'm not aware of these kinds of things happening in the past," he says.
However, Paul Price of the corporate affairs department at the National Electricity Market Management Company (the body corporate responsible for the administration and operation of the wholesale national electricity market), says that the sharing of electricity between states has been going on way before the electricity market became deregulated.
Contrary to industry speculation, Price says, "Deregulation has not had any adverse affects on the supply or the quality of power supplied". The quality of power is really determined on a local distribution level as opposed to a national or even state level, he says, and the deregulation of the industry nationally has little effect on the operations at local distribution centres.
"Since the national electricity market was formed in December 1998, there have only been two events that have disrupted the supply of electricity nationally. In both instances, the disruptions were caused by industrial strikes."
Price says it is difficult to ascertain whether or not Australia's electricity is "dirtier" than it was prior to deregulation without harvesting individual reports from the numerous regional power distributors around the country. The quality of the electricity supplied is ultimately determined by the local power distribution centres, he says.
Regardless of the validity of the claim that Australia now has a less consistent power supply post-deregulation, Upsonic's Riva says that deregulation has certainly had some affect on the power consumer, both real and perceived. "I feel there has been a lot of hype generated by the bogey of deregulation that has only highlighted issues that were ever present and were accepted by consumers as the results of government-supplied services," says Riva.
UPS market performance
Given the widespread perception that our IT environments are even more susceptible to the vagaries of power supply, compounded with concerns about the possible deterioration of the quality of power supplied, one would expect to see a steady increase in UPS sales across the board.
As market analysts tend to steer clear of the UPS market, it is difficult to get an omnipotent snapshot of UPS market performance. While some vendors claim to have experienced an increase in UPS sales in 2002 compared to same period last year, other UPS players are still waiting to see an upswing.
According to Cunnold, APC has experienced a huge increase in UPS shipments in the first quarter of 2002. She says that APC has seen a 50 per cent increase for desktop power protection year to year.
Nevertheless, Cunnold estimates that the purchase of UPSs attached to PCs remain below 10 per cent. Cunnold attributes this low attach rate of UPS to PCs to the fact that the customer education initiatives they have in place take time to impact on sales figures.
Mallia claims that Invensys too has seen a measurable increase in UPS sales. "The number of customers buying UPS systems from us has increased over the last 12 months. In particular, sales of our surge protection products, including protection of phone/fax/modems and data lines against "back-door" surges are increasing."
Despite the positive results experienced by some vendors this year, the same cannot be said across the board. According to one UPS vendor spokesperson who asked to remain anonymous, the UPS market has been going through some hard times. He says that his company's revenues were below last year's and that UPS sales have dropped. He attributes this to the downturn in the IT economy. "UPSs don't have a three-year turnover rate like PCs. They are robust enough to last 10 years," he said, which means less upgrade opportunities.
"As with the IT industry in general, UPS sales have been slower and more difficult since the general downturn in the industry," says Upsonic's Riva. However, as Riva points out, it is not all doom and gloom for the UPS market, and new opportunities are emerging. "New markets are continuing to present themselves and be discovered, as our insatiable quest for non-stop power continues to expand."
Willhart Power Tech's state sales manager, Craig Clarke, says there are still plenty of opportunities ahead for UPS resellers. "Due to the current environment, most companies' spending is down and they seem to be holding on to their equipment for longer periods. This gives resellers the chance to get closer to their customers. Find out more about their business and it will lead to other avenues of providing product and services."
APC's Cunnold also reports an important trend in the increase of management and power distribution accessories, as well as services. "The market is evolving towards not only attaching a UPS to a server, but also ensuring communication with the UPS, as well as remote manageability through network management cards and software. Also, as the five "9s" of availability (five minutes downtime per year) become the ultimate goal, we see a real take-off of our services sales, which include support for UPS installation, maintenance and on-site intervention."