Power play

UPS makes a move into the enterprise and takes the channel along for the ride. Switch on to strong demand for perfect power

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By  Stuart Wilson Published  April 25, 2005

Solutions for all|~|UPSmgeteam200.jpg|~|MGE's Middle East team|~|The uninterruptible power supply (UPS) sector covers a vast customer base and an almost infinite number of deployment possibilities. While run-rate channel-led product sales remains a staple diet for UPS vendors, exploring enterprise opportunities in the Middle East is now a top priority. The UPS sector does not always receive the attention it deserves and warrants. While back-up power may not sound like the most exciting concept in the world, it is one that has become increasingly relevant as uptime of IT systems becomes a mission-critical factor in business success. There is no point investing millions of dollars in state-of-the-art datacentres and enterprise IT infrastructure to then scrimp on the quality and reliability of the power supply that keeps it all running. Put simply, without power, this investment is rendered useless. This message has been filtering through to businesses of all sizes for some time now. As their reliance on IT systems increases, so too does their propensity to invest in high quality UPS systems and related products. With numerous Greenfield projects springing up across the Middle East, the big three of the UPS market are investing heavily in building up channel ecosystems that positions their products as an integral part of the infrastructure solution. Put simply, anyone using an IT system from the individual desktop user right up to the largest global enterprise is a potential customer for UPS vendors. Reaching out to such a diverse customer base has led to the development of various channel strategies designed to reach out to specific market segments. From the low-end to the high-end, UPS is a necessity not a luxury for those who depend on the uptime of their IT systems. The three major UPS vendors operating in the Middle East have all deployed solid channel programmes and invested time and resources in mapping the distribution and reseller landscape to ensure adequate market coverage. ||**||Channel model|~|UPSvipin200.jpg|~|Vipin Sharma, EMEA business development manager at Tripp Lite|~|“In the plug and play market, which extends up to 3kVA, we are talking about a two-tier channel model,” says Rahul Sikka, distribution manager Middle East, Africa and South CIS at MGE UPS. “We prefer to appoint a distributor per country as opposed to using a centralised distributor. The in-country distributor holds stock and feeds the reseller channel. In some more advanced markets the two-tier channel structure is in place for products up to 12kVA.” “It is important for us to understand the reseller skills,” he adds. “Some are pure resellers while others have begun to add value and develop solution-selling skills and can therefore push a wider range of products. Single phase and entry level three phase UPS systems are predominantly a channel driven sale.” MGE’s distributor recruitment has stepped up a gear in recent months with the appointment of MSO in Saudi Arabia, AC&T and Seenen Al-Naaba in Iraq as well as Avajang Systems in Iran. The priority with all these appointments is ensuring that the new distributor recruits have extensive channel reach and can hold a significant amount of stock locally. The UPS vendors are also making sustained efforts to reach down to the second-tier reseller level with a compelling channel offering. Tripp Lite’s Golden Reseller programme is now a firmly established part of the Middle East channel picture with approximately 250 partners enrolled across the region. “It is important to identify the right resellers and also ensure that our products are neither over-distributed or under-distributed,” explains Vipin Sharma, director of business development Europe, Middle East and Africa at UPS vendor Tripp Lite. “We work through Tech Data and have a clear two-tier model where we maintain consistent levels of space, pricing and support for resellers.” A fundamental part of Tripp Lite’s Golden Reseller programme is channel education. Online courses allow resellers to build up the skills to perform site audits, size UPS requirements and move towards solution selling. Every quarter, Tripp Lite Golden Resellers are set a revenue target by the territory sales manager and receive an incentive in addition to standard back-end rebates if they hit the number. “This programme has to be implemented on a country-by-country basis — a generic programme with numbers that relate to the actual market size. These programmes are successful if partners are satisfied and receive recognition for their efforts. Constant communication with the resellers is of paramount importance,” adds Sharma. ||**||Push and pull|~|UPShughes200.jpg|~|Philip Hughes, general manager Middle East and Pakistan at APC|~|The importance of channel relations is echoed over at APC. Philip Hughes, general manager Middle East and Pakistan at APC, explains: “The low-end boxes are sold through the channel and this is where partner management skills are vital. You have to motivate the resellers to buy your product and offer it to end-users. You also have to motivate the distributors to carry and hold your stock. It comes down to SPIFs, marketing, rebates and incentive programmes.” Building trust and respect between vendor and reseller has become an important part of the UPS channel. Unlike other commodity sectors, a genuine level of respect and commitment seems to exist between the major vendors and their partner community. “We make sure that the product is being sold through to end users and will help the channel achieve this,” explains Sharma. “We put the stock into the channel and it is our responsibility to make sure it goes all the way through. It is vital that any manufacturer understands this. We have the right mix of push and pull in place and will hold seminars and attend tradeshows so we can feed leads in at every channel level.” While the volume channel remains an important business segment for all three vendors, there is genuine excitement about the growing opportunities that exist in the enterprise space for infrastructure level systems deployment. It is an area where all three vendors are working hard to build up a comprehensive channel of highly skilled systems integrators to take their products to market. For the big three, the current area of channel focus is related to the evolution of their business and their traditional market sweet spots. MGE has possessed an excellent reputation as a supplier of UPS systems in the midrange and high-end for some time. Consequently, its focus now is to build up the same level of brand awareness at the SMB and consumer level and build the relevant channels-to-market to take its products out to this fragmented customer base. In contrast Tripp Lite moved up the ladder with the launch of three-phase UPS systems just over one year ago. To provide a route-to-market for these products, the vendor launched its critical application partner (CAP) programme, designed to recruit high-end solution providers across the wider Middle East and Africa (MEA) region. “We are identifying a couple of CAPs in each country and these companies typically define themselves as power solution providers,” says Sharma. “We have already won significant projects in the UAE and have a good installed base in Saudi Arabia and Jordan too. We need to continue to build on the CAP programme as we move forward.” ||**||Enterprise play|~|UPSsuri200.jpg|~|Mohammad Suri, general manager at MGE Middle East|~|The solution providers capable of delivering enterprise infrastructures incorporating a UPS system are certainly in demand in MEA. APC too is pulling out all the stops to build the channel ecosystems involving integrators and alliance partners. “There are resellers that know how to sell traditional APC boxes and do a great job but when you move up a level you are talking about solution providers,” says Hughes. “These companies are capable of selling to the magical CxO level — businessmen as opposed to pure IT men. You need partners with a track record in this space and specific skills that address the client needs.” APC has rolled out a structured channel programme that addresses this requirement for partner segmentation and tailors training and education to the specific level of expertise that each segment requires. “We are continually looking for strong systems integrators,” continues Hughes. “We already have a good network in place in the UAE, Saudi Arabia and some of the other Gulf States but there is room for even more to come on board.” Strategic alliances with major infrastructure hardware vendors such as Cisco and IBM, as well as with enterprise software vendors such as Microsoft, play a prominent role in the formation of these high-level partner relationships. APC already has a strong relationship with Cisco and as a consequence it makes a great deal of sense to focus some of its channel recruitment effort on Cisco gold and silver partners. Vendor partnerships and strategic relationships with infrastructure vendors also play a major role in MGE’s approach to the enterprise market. “We have many strategic partnerships in place,” explains Suri. “These give us the ability, in conjunction with partners, to offer turnkey solutions in specific vertical segments. MGE has relationships in place with rack manufacturers and other equipment suppliers that allow us to form the ecosystems that bring solutions to market. By combining their offerings with our UPS systems, cooling units, cables and other products we are in a position to provide a complete datacentre solution. Not just saying it, but actually offering it,” he added. All of the Greenfield construction projects occurring in the Middle East are investing heavily to incorporate an advanced IT infrastructure into their developments. These networked buildings with a ready-to-roll intelligent IT infrastructure also require sophisticated power delivery and power back-up systems. The UPS vendors are determined to capitalise on these opportunities. And this is an area where buyers are prepared to pay top dollar to ensure the quality of their system. While solution selling is now a pervasive reality at the enterprise level, it is also becoming increasingly commonplace in the midmarket as well — even if the level of complexity is somewhat reduced. Many distributors have started to move beyond pure volume sales to add value in the UPS sector, playing a prominent role in the development of the reseller skills base. “We went to the traditional distributors and told them, ‘you can make a slim margin selling boxes. Or you can develop us the next level of systems integrators and authorised partners and improve your margin by adding services to your offering as well’. It took a while to get this message across but now we have guys like Sumit Kumar at Aptec doing a fantastic job driving this value-add into the channel,” explains Hughes. ||**||Emerging markets|~|UPSrahul200.jpg|~|Rahul Sikka, distribution manager Middle East, East Africa and South CIS at MGE|~|While brand equity is undoubtedly important in the UPS sector, it is clearly more important at the enterprise level space than the entry-level. At the very low-end, UPS vendors face stiff competition from no name Taiwanese brands and even fake product. It is something that the major vendors have learnt to live with. “There are a lot of no name brands going through Dubai into less developed markets,” says Hughes. “If you are sitting in Somalia and you want a UPS for your refrigerator, you will not spend US$100 on a quality brand when you can get a no name brand for US$25. The fridge is not mission critical after all. However, those buying a UPS for their IT system have made a conscious decision to invest money to protect it. They see the value in a respected brand and an established service channel.” No name brands have penetrated into markets such as Iran, Turkey and Egypt and the A-brand UPS vendors present a united front in promoting the superior quality that their products offer to customers “I don’t mind competing against Vipin,” says Hughes. “But when it comes to no name brands we will all team up and tell the same story to the market.” The example of a refrigerator in Somalia offers an important insight into the breadth of uses that UPS systems can be put to. The big three vendors also produce items such as power inverters that have a variety of uses in emerging markets. Sharma at Tripp Lite recently toured the jungles of Africa looking at how Tripp Lite could partner with solar power panel manufacturers to supply power inverters. The market for UPS systems and related products is massive in the Middle East with growth rates easily outstripping the global average of 7% according to research houses. The major vendors have a solution for every market and every type of project — be it an enterprise deployment in the intelligent buildings being constructed in Dubai or a back-up system for a tiny hydroelectric scheme powering the lights in a remote Pakistani village. With channel programmes to suit resellers of all sizes and all skill levels, the UPS sector is open to all. When all is said and done, anyone using an IT system — in fact anyone relying on a power system — is a potential customer. Resellers should flick the switch and turn on to the UPS opportunity. ||**||

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