Power Protection UPS Devices Have Strong Fourth Quarter

March 31, 2011

By Carrie Majewski (née Schmelkin) - Director of Content Marketing, Content Boost

Companies just can’t seem to get enough of Uninterruptible Power Supplies (UPS) and global revenues for the fourth quarter of 2010 were 10.8 percent higher than that same period in 2009.

 The statistics indicate that not only is the UPS market recovering from the economic downturn but also companies are recognizing the importance of using UPSs as a form of power protection to safeguard their data and protection against power outages and brownouts.

Minuteman UPS/Para Systems, a leader in power protection technologies, is certainly happy to hear of the news.

“We are excited about the growth numbers,” Bill Allen, director of marketing for Minuteman, told TMCnet. “We are also pleased that Minuteman products are tracking at a faster growth rate than the market.”

According to data collected from IMS Research, the second half of 2010 grew twice as fast as the first, helping to push the total annual value past $7 billion. IMS Research predicts demand for UPS to return to pre-recessionary levels by 2012. “Spending on critical power upgrades such as UPS has come back, notably in the small and medium business segment where power requirements are lower and projects are less capital intensive,” Jason dePreaux, a senior analyst with IMS Research, said in a recent ECN article. He added that big data center jobs also appear to be coming back, “though this sector is highly dependent on the availability of credit to move forward with major upgrades or new construction.”

Minuteman agrees, noting that it predicts a trend of businesses turning more to power protection technologies.

“An ever-increasing number of devices are becoming more critical to business operations,” Allen said.  “That leads to more demand for power protection, which ultimately leads to more sales of UPSs.”

Other statistics show that the power protection products have generated the most revenue from Asia, at an annualized rate of 15 to 20 percent; that sales of large three-phase UPS for enterprise data-centers spiked in quarter four for 2010, and that after-sales UPS service was worth an additional $2.5 billion in 2010.

The UPS industry reached its peak in 2008 when sales of UPS earned suppliers more than $8 billion. While the market for UPSs may be out of the dark, dePreaux noted that the industry will still face some challenges this year.

“UPS vendors will have to skillfully manage shortages of critical components like IGBTs,” he said. “In addition, rising raw material and labor costs in Asia are squeezing margins and forcing price hikes to be made, though suppliers so far are reluctant to introduce steep increases on a still wary market.”

Added Minuteman’s Allen, “We believe the market for UPSs will continue to grow in conjunction with more data storage, more servers, more unified communications systems, and more security systems being sold.  With power protection hitting an all-time low in terms of pricing, that bodes well for UPS manufacturers.”

Carrie Schmelkin is a Web Editor for TMCnet. Previously, she worked as Assistant Editor at the New Canaan Advertiser, a 102-year-old weekly newspaper, covering news and enhancing the publication's social media initiatives. Carrie holds a bachelor's degree in journalism and a bachelor's degree in English from the S.I. Newhouse School of Public Communications at Syracuse University. To read more of her articles, please visit her columnist page.

Edited by Janice McDuffee