PERSPECTIVES - Assault and battery

Thanks to the rapid growth of e-commerce, more businesses are recognising the importance of having clean power supplies - but is there room for everyone in the UPS market?

There is no agreement on the exact size of the UPS market in the UK.ising the importance of having clean power supplies - but is there room for everyone in the UPS market? According to George Leptos, business development manager at vendor Chloride, it is growing at 15 per cent per annum, with sales levels in excess of #150 million, while figures from research firm Frost & Sullivan suggest that the market is expanding at about 12 per cent annually. The UK sector is worth about #200 million per annum and by 2000, the European market looks set to exceed #1 billion.

The lower end of the market has been dominated by American Power Conversion (APC) for some time, while the mid and high-end sectors have several companies competing for market share, including Chloride, Best, Merlin Gerin, the Exide-backed Powerware, PK Electronics and Liebert. Small UPSs with between 2KVa (kilo-volt-amperes) and 10KVa account for about 45 per cent of the total value, so there are opportunities for dealers to make money from these products.

Penetration of networking servers is low - perhaps only 60 per cent - and UPS vendors are trying hard to educate the market. However, much of the trade for larger supplies is, according to Frost & Sullivan, a replacement business. Because of downsizing and the current shift towards distributed computing models, UPSs are becoming less commonplace in the data centre and being used more at the departmental level.

Gary Jameson, UK distribution channel manager at Powerware - the UK division of Exide Electronics - believes the UPS market is in good shape and by no means has peaked. If the figures from Chloride are correct, it hasn't - the company believes penetration in the installed base of servers is at 60 per cent and an estimated 25 per cent of servers are sold with a UPS as part of the package. Only one in 20 PCs are protected from power problems.

The Frost & Sullivan figures support this, while vendor estimates suggest the market is growing at a faster rate than predicted. Chloride's Leptos says the smaller UPSs - those with up to 3KVa - have grown rapidly in recent years and anticipates the sector will represent 44 per cent of the industry by the end of the century. Prices are already low and seem certain to fall further.

The higher rated models look set to deliver healthy revenues and margins for some time. Leptos says: 'The already substantial demand for medium-sized UPSs - up to 20KVa - is set to increase. This sector will show similar growth due to the increase in data centres, multiple server applications and a recognition that one medium-sized UPS is better than a number of smaller ones.'

This view is shared by Paul Tyrer, UK sales manager at APC. He says it makes sense to protect the whole system rather than a select part of it: 'UPS use has historically been concentrated on the data server, but now it also focuses on the centres that the data flows through - the infrastructure, the networks and the internet.'

Although many vendors are concentrating on larger installations and encouraging a more holistic approach to power management, APC is looking to develop the small and medium-sized business. Here, says Tyrer, the growth of e-commerce will be vital: 'At the corporate level, adoption is high and the move is to the centres where the data flow is happening. In the Soho market, one of the key drivers is internet adoption. As people begin to run transactional processes over the internet, we're going to see greater UPS adoption because power management is about more than just preventing a mains failure - it's about keeping the power clean.'

The argument - thin though it seems - is that as businesses depend more on internet-based telecoms, the system will become more sensitive to power drops and unclean power supplies, and so will need greater protection.

However, even if there is widespread adoption at the lower level of the market, the very low prices of the units will force most sales into catalogues and retail outlets and onto the mail-order pages.

UPSs AND THE YEAR 2000

One of the key opportunities in the UPS market at the moment is the millennium. According to Guy Ponsford, year 2000 business development manager at DMR Consulting - a division of Amdahl - it's a huge opportunity because there is no certainty that the national power companies will be ready.

'As far as I am aware, there have not been any successful tests on electricity utility providers,' says Ponsford. 'If the year 2000 were tomorrow, it would be likely that we'd all be without electricity at midnight tonight.

This would cause most computers simply to switch off. Although those computers with UPSs wouldn't go down immediately, they would only function for as long as their backup batteries last.'

In other words, the opportunity extends beyond the UPS to total power management. Many players in the market say this is where the effort should be concentrated.

He believes organisations need to look at every aspect of power protection, not just the guarantee of supply: 'A risk management assessment approach must be adopted to ensure that in the event of a power failure, the UPS will function successfully if a dependent component fails - and that steps are in place to cater for the fact that the UPS will not function for long.'

There is a great deal of work to be done in auditing the power systems on a site and resellers can cash in on the need for this to be done prior to the millennium. Companies need to make sure they have protection and, if they do, they need to know who supplied the UPS and who is supporting it. They must make sure they are clear about what systems it backs up and identify any critical functions that are not supported by a UPS. They also need to look at the length of power supply failure, check batteries and test the alarms.

Some UPSs may be too old to adapt to the date change, says Ponsford. And not all of them will be able to cope.

'Some will, some won't. Typically, the oldest have no or little built-in intelligence and, therefore, no date sensitivity.

The more recent units are designed with compliance in mind and should be more able to cope. Those in the middle-age bracket are less likely to. Certain UPS suppliers claim to have been testing their units since 1996.'