Vendors Go for Entry Plays
Another key trend is that of vendors of high-end UPSs giving attention to entry-level UPSs. This is a low-value and high-volume category often characterized by cutthroat competition. Players like Emerson, which were concentrating on the high-end UPS space, forayed into the entry-level space. In August 2005, Emerson Network Power announced its entry into the SOHO UPS market, with the launch of two UPS models, the 600 VA and the 1,000 VA under the ITON range.

With this, Emerson is now able to offer a complete spectrum of power solutions across SOHO, SME and large enterprises. Some companies also forayed into the open market by selling key UPS components. For instance, Numeric Power Systems inked a pact with Panasonic Industrial Asia to sell Panasonic's SLA battery products in India. Numeric, which uses Panasonic's batteries in its UPSs, is looking at open markets as an additional revenue stream.

Other trends witnessed over the year are related to dual power servers. Dual power gives redundancy at the server level. A customer has an option to utilize two sets of UPS power sources rather than a single source. This eliminates the possibility of a single point of failure.

Apart from reliability and 24x7 service, the customers looked for feature-rich equipment to cut down installation and running costs. For example, use of active rectifiers results into near-unity-input power factor at all loads which enables generator compatibility, lower harmonics and input cabling as well as better overall efficiency. Customers also expect the equipment to match their load power factor. The new servers and PCs have low power factors and hence there is a need for power-conditioning equipment that can match this.

Smaller Form Factor, New Markets
With space becoming a premium, especially in sectors such as BPO, vendors also offered small form factor UPSs in tower models. Eaton Power launched two new products in FY 2005-06 with small form factors. With small footprints, one gets many options for locating the UPS, and therefore, more data center space is freed for future expansion. Meanwhile, Pune-based DB Power, one of the oldest UPS companies, entered into a strategic partnership with Chloride Power Protection based in UK.  By virtue of this partnership, DB Power is poised to offer locally manufactured Chloride products. In the verticals, DB Power focused on infrastructure and manufacturing.

Deployments like IP telephony, server consolidation, medical diagnostic and imaging equipments have been instrumental in driving the UPS market globally. Clearly, these have emerged as an alternative target segment for UPS vendors worldwide. Meanwhile, the buoyancy in the IT spend is likely to positively impact UPS purchases. As companies ramp up their IT hardware, there will undoubtedly arise the need for more UPSs. 

Vendors saw a shift towards B- and C-class cities such as Pune, Chandigarh, Lucknow, Hyderabad and Jaipur, which are fast becoming global hubs of R&D, ITES, BPO, retail, and manufacturing

$8.6 bn by 2012
A recent report by Frost & Sullivan on the global UPS market states that the number one reason for organizations investing in UPS systems is to protect digital equipment and process against the damages from power abnormalities. However, a lack of awareness has prevented end-users like medium-sized organizations from upgrading their equipment. Furthermore, the study further says that compliance with regulatory standards was a key factor that drove the demand for backup power solutions between 2004 and 2005. Organizations were forced to advance their IT networks to ensure better tracking systems and improve accountability. Demand for backup power is not expected to slow down in the coming years either. The adoption of next-generation blade server technology as well as the transition to IP telephony is expected to put a strain on the power infrastructure and the overall data center environment. In some markets, where the UPS is considered to be a generic product that requires low involvement in terms of determining brand or specific features, the purchase would be based solely on price and not on advanced features such as battery management, automatic shutdown, or scalability. 

24x7 Drives the Market
In the Indian context, an organization's ability to meet the 24x7 requirements of the digital economy is driving the UPS market. For instance, large data centers opt for state-of-the-art power backup architectures primarily because they have to comply with the quality norms. Traditional verticals like utilities, textiles, logistics and the like have built a lot of legacy systems and system silos over the years. These verticals embarked aggressively on ERP exercises over the year, leading to the consolidation of their backup power architecture. Hence, new apps deployed acted as the key drivers for the mid-to-high-end UPS segment. Several enterprises still operate with heterogeneous IT setups; this augurs well for the UPS market in the ongoing year. With this opportunity in the backdrop, the UPS market is well poised to clock more than 28% growth in FY 2006-07.

Finally, a look at the current growth rates indicates that the mid-to-high-end UPSs will gain ground as SMB and large enterprises embark on power backup expansions. Meanwhile, entry-level UPS will continue to be a volumes game and the ideal route vendors should adopt is to bundle UPSs with PCs. Overall, the UPS market outlook will remain good and the vendors can expect another strong year.

Shrikanth G
shrikanthg@cybermedia.co.in

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