UPS market in the chips
- 15 September, 2004 14:49
Queenslanders are digging in for a bad storm season and preparing themselves for a summer of blackouts. There are already thunder clouds over the executive offices of the two major power suppliers - Ergon and Energex - which have been accused of letting the state's power infrastructure deteriorate to an unacceptable level.
Frustrated Queenslanders are gearing up for an even worse year than the 12 months to March when Ergon customers were left without power for an average of nine hours and 38 minutes, and Energex customers were blacked out for an average of six hours and 14 minutes. For Ergon that was 90 minutes more than the previous year and for Energex it was almost double.
Bad weather and bush fires aren't the only problem. In many areas the power infrastructure is old and badly in need of maintenance resulting in 'dirty power' - uneven voltage, noisy lines, surges and spikes.
The situation has become so politically charged that Queensland premier, Peter Beattie, has appointed a specialist energy minister to deal with the situation as the annual storm season approaches. But it's not only storm season threatening power supplies.
The state has just experienced its hottest and driest winter on record and much of South-east Queensland is tinderbox dry, threatening bushfires that could further damage the power grid.
A major blackout in August cut power to 200,000 homes and businesses in the southeast corner after a safety switch tripped in northern NSW causing a domino effect similar to the Great East Coast blackout in the US last year.
While the power situation is being played up in the local media as doom and gloom, it is a cloud with a silver lining for the uninterruptible power supply industry which is cashing in.
But it isn't just storms - political or meteorological - that are driving the market.
The improving economy in Asia - particularly China - has resulted in increased demand for raw materials and a boom for our power hungry mining industries in WA and Queensland. With cash in their pockets, the mining companies are spending to upgrade equipment, including their power protection.
At the other end of the market, home consumers are becoming more aware of the need for uninterruptible power supplies to protect their expensive home theatre equipment and, that in turn, is opening the audio visual channel to UPS distributors for the first time.
This surge in the consumer market for UPS has seen Emerson Network Power Australia move into the market with a range of lower-end products.
Earlier this month, Emerson announced it had appointed Ingram Micro as Eastern Zone Master Distributor for its range of Liebert brand.
Ingram Micro will be responsible for spearheading Emerson's push into the high-volume consumer and small business UPS markets with its Liebert Micro UPS products. The agreement comes into effect in October in all states other than SA and WA.
In the past, the Liebert brand has been associated with enterprise level mission-critical data centres, but now it has modified the same technology to develop products for the home, small and medium business markets.
Ingram Micro Australia managing director, Steve Rust, said the company would initially carry four Liebert Micro UPS product ranges: Liebert PowerSure Assistant, Liebert PowerSure Proactive, Liebert PowerSure Interactive and Liebert UPStation GXT.
They included entry-level 500VA to 650VA offline UPS products in the Assistant range, 700VA to 3000VA line interactive UPS products in the ProActive and Interactive ranges, and true online double conversion products in the GXT range rated from 700VA to 6000VA.
Emerson's managing director, Bob Daniels, predicted that as applications such as Voice-over-IP and Power-over-Ethernet took hold in the small-to-medium business space, companies would be looking to scale up their power protection products, giving vendors and resellers another revenue stream and a way of offering better value product bundles to their customers.
Emeron's marketing manager, Peter Spiteri, said because the new ranges would use the same manufacturing facilities as the company's larger UPS', the company had economies of scale the competition could not match.
"The margins for the reseller at street price should be around 25 points," he said.
Spiteri said there was growth in SOHO, particularly where people have purchased home theatre systems and large plasma screens.
"Those appliances are very expensive and draw a lot of power, so given that the average mains power gets about 200 hits a year - whether it be outages, sags or surges - people are being advised at point of purchase to get a UPS," he said. "As a result, we are seeing UPS move into the AV channel."
Spiteri said while it was a terrible way to look at it, the bad publicity about the poor state of the power grid throughout the country was good for business.
"Since the power grid was deregulated, maintenance has slipped. While you won't always get outages, the further away you get from the point of transmission the more fluctuation, sags and surges in voltage that don't necessarily appear as blackout but are quite injurious to equipment," he said.
"Our equipment comes with voltage regulators to handle that."
Spiteri said the UPS market could be likened to insurance in that it was reactive rather than proactive.
"People will take up insurance after they have had a problem and that's what we find," he said. "After there has been a major outage or electrical storm we can literally graph the sales.
"But if you just call on a small business, buying a UPS is not a top-of-the-stack purchase for them unless they have personally had power issues. It's a tricky sell."
However, it's not a problem with high-end businesses and mission-critical data centres because they already know the risks associated with their network going down.
"As SME's take up Voice-over-IP and Power-over-Ethernet - where if you lose your power you are going to lose your power and your voice - they are becoming more aware and asking us to make UPS part of their network," Spiteri said.
Queensland and WA were showing disproportionate growth because the mining sector had been re-energised by Chinese demand for raw materials and capital expenditure had jumped to 16 per cent compared to the national average of about 11 per cent.
APC's new general manager for Australia and New Zealand, Paul Munten, said growth in the server market was also flowing through to UPS sales and customers continued to demand high availability and redundancy.
"We are seeing the trend of server consolidation continue, meaning an increase in mid- to large-sized UPS' installed," he said.
"More and more IT equipment is rack-mounted and IDC predicts that by the end of next year 62 per cent of servers sold will be rack-mounted.
This trend must be mirrored in the physical infrastructure supporting IT equipment including the UPS.
"Customers also are increasingly demanding a manageable physical layer. To provide a highly available network, they need to be able to monitor and manage the power and environmental conditions in the server room remotely. So they are aware of any issues as soon as they occur to prevent the situation from threatening uptime and availability."
Munten said the most significant development recently was the move towards integrating power protection systems into the overall physical infrastructure, supporting the IT systems - including racks, power, cooling and cabling, and the ability to manage this physical layer.
APC is providing resellers with a variety of selling tools and one reseller, Dean Calvert of
Calvert Technologies in Adelaide, has found a way of using the data gathered from APC PowerChute software to pinpoint areas where the power is particularly unreliable.
"Using software I have discovered where the power is particularly unreliable in Adelaide," he said.
"I take the information, put it into Excel and create graphs. For example, I'll be talking to a customer located on Greenhill Road and I can show them that premises located on Greenhill Road are particularly liable to power problems.
"I emphasise that power problems will occur at the worst possible time. For example, imagine you are doing a payroll run and the power fails.
Not only will this undo all your work, but if the system happens to be writing data to the files at the time, you can get data corruption as well.
You've lost all your work, you have to go back to your previous back up file, restore it down and pick up again. This can cost a lot of time."
While the server market is growing, another APC reseller, Frank Kane, of Sydney-based UPS Solutions, said as storm season approaches he has been getting a lot more calls from home users who are looking to protect individual PCs.
"A lot more people - home and corporate users - are becoming aware of power problems because of the coverage they are getting in the media," he said. "IT managers are getting on top of it and management is much more across it, so sales are definitely going to take off in the next couple of years."