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Peripherals: UPSs Powering Growth
The UPS industry saw healthy business-as-usual, with branded vendors gaining further ground
Shrikanth G
Tuesday, July 25, 2006

The visible face of the UPS industry is the organized sector, dominated by players like APC, Numeric, DB Power, Eaton Power, GE, and WeP. However, the Indian UPS industry also has elements that are on the margin, yet exercise a predominant role in the market. This is the unorganized sector that  comprises  several hundred players across the country serving in regional pockets. The distinction between these two sectors has in no way affected the growth of the organized sector. The UPS industry is doing better than ever before. This sudden boom is explicable. Like any other  peripheral, the UPS's market fortunes are closely linked with the performance of the PC industry. With the desktop PC business clocking growth in excess of 24%, one can be sure that the UPS sector is heading for another successful year.

This spurt is unlikely to be a temporary burst. A look at the Indian power landscape has enough pointers to indicate that the UPS market is all set to thrive in this part of the world, with healthy growth rates y-o-y. New power initiatives driven by the government and private players have vastly improved the power scenario. Yet, most of the Indian states continue to reel under scheduled and unscheduled power blackouts. Steps towards liberalization have not aided the overall short supply of power which is presently 10%. Moreover, the quality of the power has also been an issue. For instance, the voltage fluctuations are a major cause for concern. Nevertheless, on an optimistic note, the UPS industry is witnessing a healthy growth. 

UPS: The Top Players

Vendors

Units

2004-05

2005-06

APC

221,411

349,297

WeP

112,621

165,112

Numeric

70,752

112,589

Microtek

65,556

80,613

Powercom

26,143

68,699

TVSE

36,781

9,453

Others

410,989

553,412

Total Units

944,093

1,339,175

Total Value (Rs crore)

477

698

Source: IDC India, 2006
Note: Market share by channel shipments for UPS up to 5.1 KVA

UPS Systems up to 5.1KVA has grown by 46% by value. The consumer segments that drove growth are SOHO and mid-end enterprises

Ground Realities
The performance of the UPS industry in India over the last two years reveals the market segmentation across different KVAs. For instance the entry to mid-end UPS market, which is the most competitive is the space that is addressed by largest numbers of vendors- both organized and unorganized. This segment power back capacities typically starts at 500VA and goes up to 5.1KVA and is targeted at SOHO to mid-end enterprise consumers. The higher end of the UPS market starts from capacities of 5.1 KVA and goes up to 4,800KVA. In the last few years the UPS market is more aligning towards established branded players as the consumers increasingly look at the brand. This is due to the fact that power back up is seen as a critical back end enabler. The high end UPS consumers are from large enterprises, who go in for a mix and match of power back up devices. This kind of segmented market composition did not exist a few years back and this is also putting pressure on the un-organized
UPS sector.

Understandably, Mumbai, New Delhi, Chennai, Kolkata and Bangalore are the largest markets for UPSs as these cities are also the largest consumer of PCs. However, this year, vendors saw a shift towards B- and C-class cities such as Pune, Chandigarh, Lucknow, Hyderabad and Jaipur, which are fast becoming global hubs in terms of R&D, ITeS, BPO, retail, and manufacturing. Given the criticality of operations undertaken in these sectors, there is an increasing need for a comprehensive network of uptime solutions, including enterprise-class UPSs.

Power to the Center
In the previous year, one of the key trends was the shift from use of micro UPSs to centralized setups. This year saw an escalation of this trend with large enterprises opting for centralized power backup architecture. The concept of offering custom backup solutions has gained momentum. These trends signify that UPS is becoming a key component of an enterprise's IT architecture rather than just a peripheral device. The market leader, APC, as expected, had a huge grip on the market with its focused offerings cutting across large enterprises, SMBs, service providers, government, education and SOHO. Estimates peg APC's market share at 26% in the segment up to 5.1KVA. The key emphasis APC laid over the year was in rolling out products
with a small form factor with higher VAs. APC also focused on manageability and created products that are rack mountable. With a wide gamut of products, APC was witness to a good response to all its power backup solutions.

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