Mining the verticals with power protection
- 22 August, 2001 16:00
There was a time when most of us greeted blackouts with squeals of excitement as Mum went to fossick through drawers for no-name brand candles and Dad would curse about bruised shins as he rummaged his way through the garage in search of a torch.
These days we're more likely to groan and watch with a sinking feeling as whatever we were working on vanishes into the ether. Or worse still, just sit there with a dumbstruck expression and hope against good sense the servers haven't crashed every application - the settings for which you laboriously documented, or rather had intended to "next weekend".
The fact of the matter is power reliability is inversely proportional to how critical data availability has become. Simply put, the quality of power supplied by utilities is getting worse, while the potential financial loss due to system failure or downtime is escalating daily.
Combine this with one of the worst downturns in the IT market and the $64,000 question becomes "How can I as a reseller turn a positive out of two negatives?" The answer, according to uninterruptable power systems (UPS) proponents, is mining the verticals.
Coming off a big spike in UPS sales for data centres last year, Michael Mallia, sales and marketing manager for Invensys Energy Systems, claims the UPS market is in limbo. Caught between a worsening economy and an up-coming election, people are becoming increasingly cautious with their spending.
"When times are tough people tend to go back to what they've done before," says Mallia. "I mean, if you were concerned about losing your job you wouldn't be out buying a new car."
Mallia's message then is that it's important for resellers to choose their vertical markets carefully. Take for example the carrier market - so promising last year, it has now all but pulled in its horns.
"Telcos aren't spending a cent now," says Mallia. "[Furthermore], telco contracts are usually for large tenders so the process is fairly tough."
However, the downturn hasn't reached all levels of the market. According to some industry pundits, there is hope in some unusual verticals that have been previously overlooked.
Don Seaton, founder of UPS distributor LMD Inter-national Power Pro-tection, refers to the UPS market as the best-kept secret in IT. He's also quite happy that all and sundry haven't moved in on the space and dragged down the margins, which are still up around the 20 per cent mark.
Seaton, the former Asia Pacific manager of UPS vendor Tripp Lite, says there are a number of vertical markets to be exploited, with the healthcare industry number one on the list.
In the US, Seaton claims a significant part of the $US3 trillion spent annually in the healthcare industry is tied up with the maintenance of highly sensitive equipment. Seaton says this figure can be reduced by 60 to 70 per cent by bundling a UPS directly with the hardware, rather than relying on a hospital's central power protection systems.
He claims the Australian market is gradually coming around and is looking for preventative measures. Although it does not occur on quite the same scale, UPSs are also becoming a recognised necessity for most medical equipment. Many vendors are unwilling to touch life-support systems for fear of litigation, while X-ray machines, dental equipment and a host of other apparatus have exact power requirements that if altered can damage the device's sensitive circuitry.
UPSs sold to the medical sector have to meet strict criteria. It can cost vendors up to $5000 to test and certify a single UPS model, and they must comply to a standard of no more than 0.05 per cent electrical discharge seepage regulation - a challenge for most batteries.
Craig Coombes, sales manager for Victorian distributor Multimedia Technology, claims that while the health market remains key, the education vertical has also taken off. With schools investing considerably in IT infrastructure, they are susceptible to the same downtime problems faced by enterprises - namely the loss of critical data.
Another largely untapped vertical identified by LMD's Seaton is research laboratories. Universities and pharmaceutical research companies are in the same boat as hospitals, in that they too rely on extremely sensitive equipment.
Education powers demand
The sales message hasn't really deviated, claims Coombes, with resellers touting the benefits of power protection over the potential cost of lost data and damaged systems. However, he claims the skill is being able to tailor the pitch to suit the specific vertical.
Bouke Siebenga, business unit manager of UPS distributor Nilsen, is a little skeptical about how much resellers really know about fitting the right UPS system to the right customer.
"A black box is a black box, but inside there's a lot of difference between products. It's a bits-and-bytes industry, but when you're talking about UPS you're talking about amps and volts. It's a slightly different paradigm and resellers should be wary of this," observes Siebenga.
According to Siebenga, resellers have the opportunity to provide value-added services by having a knowledge of what happens on the other side of the power socket. While most IT managers are concerned with what comes out of the wall, it's the reseller's responsibility to know how reliable the local utility is, and how consistently the power travels between the local switchboard and the customer's premises.
UPS vendor Lie-
bert concentrates 70 per cent of its marketing effort on training resellers how to sell UPS systems and, perhaps more importantly, how to cross-sell their core business offerings (routers, switches, servers, software) with power protection.
"We give [resellers] scenario-based training, which lets them identify how they can integrate their core business with power quality," says Russell Perry, marketing manager and UPS product manager for Liebert. "Power quality is not just UPS on a server. There's so much more to it."
Although he acknowledges the increased privatisation of electricity providers is causing the quality of supplied power to degenerate, he doesn't agree that this is the central driver for UPS anymore.
"It's not driving it as much as people's demand for higher availability [is]," claims Perry. "Today people realise [UPSs] are an investment and not a cost."
Yet when it comes to ramping up sales, resellers should not limit themselves to tech-nical training. UPS vendors are throwing their weight behind sales training to assist the channel to grow its business.
During a slow period, various theorists stress that sales people should re-touch existing customers with cross-selling opportunities. Leanne Cunnold, managing director of APC in Australia and New Zealand, says this is a great way to approach the market using UPS equipment as a way to keep incremental business rolling in.
Cunnold suggests a good strategy is to
work out with the customer what their
key business processes are and then map
out a power protection strategy to cover
these. She uses a supermarket analogy to express her point; it's not going to help a
supermarket if only its back-end servers are protected, when the queues are 10-deep
on a Saturday morning and the point-of-sales terminals are down.
"It has to do with educating the reseller about how to expand into the enterprise with UPS equipment that doesn't just protect the servers, but also protects at the desktop level [in key areas]," says Cunnold.
One service APS offers its resellers is a site survey where APS sends one of its tech-nical staff out to the customer's site with the reseller to consult on the best UPS strategy for the customer's infrastructure. Cunnold claims that as well as providing the reseller with an additional resource to draw on, the program provides resellers with some informal training on UPS selection.
With market forces such as they are at
the moment, end users are willing to pay
for higher levels of service so long as they
can see a sound business case. And what
better way to keep generating revenues in a tough climate than by providing customers with the peace of mind and insurance that
UPS can deliver.