Power trip

It might not any earn any accolades for being the most glamorous sector of the IT market, but make no mistake about it, power protection devices are crucial to every organisation committed to making their technology infrastructure run smoothly. And as Channel Middle East discovers, the rewards for resellers capable of developing solutions in this understated segment are plentiful.

  • E-Mail
By  Andrew Seymour Published  July 31, 2007

The channel for uninterruptible power supply (UPS) products, and all the technology associated with it, is an interesting place to exist right now following a global shake-up of the market that was sparked by Schneider's US$6.1 billion move on back-up power equipment giant APC at the end of last year. That deal, which pairs APC with Schneider's MGE UPS Systems subsidiary to create a US$3 billion a year giant, reshapes the market in a way that was inconceivable when the duo were on opposite sides of the fence.

In the Middle East, where both organisations historically enjoy stronger on-the-ground presence than competing manufacturers, the full implications of this deal continue to be felt. Rivals are adamant that they are profiting from the confusion and angst that tends to be felt among partner communities during a merger of this magnitude, while APC and MGE insist they are successfully combining resources to build an even more comprehensive channel than the one presently at their disposal.

Olivier Poteaux, area manager for the Middle East and Eastern Africa at France-based UPS and lightning arrester specialist Infosec UPS Systems, insists the company has landed several deals as a result of the organisational challenges facing APC-MGE. However, he concedes that a fully-integrated APC-MGE firing on all cylinders is a daunting prospect for all UPS suppliers. "The problem in the long run is that MGE has exclusivity with some partners in the Gulf and now they have merged they aren't giving exclusivity anymore so they are approaching some of my distributors," he added.

APC has now begun the arduous task of auditing authorised partners within its enlarged network ahead of a cross-training process designed to ensure resellers are highly qualified. With limited channel crossover at the low end - largely because MGE is in the process of selling its 600-strong small systems business for US$570m to Eaton Corporation following instructions from the European Commission - the channel structuring challenge that APC-MGE faces is more vivid at the high end of the market.

"Our task at the moment is really about looking at the skills of every partner on both sides," explained Philip Hughes, regional director Middle East zone at APC-MGE.

"We want to avoid opening all products to all partners in all markets because they will just fight over market share and not make any money. What we are doing is an audit of all the channel partners' skills, value add, service capabilities and market reach and then basically tweaking the availability of the product between them."

Sources estimate the Gulf and Levant market for products sold into the SMB sector alone will be worth close to US$100m this year, while it is speculated that the wider market for UPS systems alone is twice that size. A white paper produced by Venture Development Corporation last year, meanwhile, values the overall EMEA UPS market at around US$1.5 billion this year.

As the size of the market continues to change, so too does its composition and definition. Power distribution units, cabling, notebook accessories and rack enclosures all fall within the domain of UPS and power protection vendors. Whether it is Tripp Lite, Liebert or Powerware, the product range available to customers is incredibly extensive these days. "The market is developing very quickly because most of the customers now understand the necessity of UPSs," remarked Artem Ryzhov, brand manager at distributor Jel Corporation, which is authorised to sell Tripp Lite equipment into the CIS and African markets. "They have started to understand that the UPS is not just a box with a battery that gives you some support time for backing up data when an electricity blackout happens." With traditional UPS vendors now just as likely to be found marketing a whole new range of emerging power and cooling devices as they are selling UPS products for computers, the transition from UPS supplier to "power protection" supplier remains a key trend. "The phrase ‘UPS market' is really very narrow today," admitted Hughes at APC-MGE. "Obviously there are a lot of UPS vendors out there and we are a UPS manufacturer. But if you look at all the vendors you will see that their product range actually extends way beyond batteries with a charging circuit."

Even more dramatic is Hughes' assertion that APC is "rapidly becoming a software company", a statement that emphasises the evolving nature of the market. He says this transition began when APC started moving towards the datacentre space with infrastructure systems that command software which can monitor power consumption in individual racks, turn servers and routers on and off remotely and assess factors such as temperature and humidity.

"If you get blade servers in a rack you need 20 or 30 kilowatts and that suddenly starts to build up heat so you need to measure what's going on there and apply cooling," explained Hughes. "So we started to develop this integrated software and bought a company called NetBotz, which made IP cameras and security systems for helping to control and manage the datacentre. That then starts to integrate and people look at where they are getting hotspots and how to control that. Suddenly you are into this whole new area of software called capacity management and planning, which is where we are now."

Hughes' prognosis strikes a chord with other UPS experts who confirm that the software aspect has added an extra dimension to the market. Poteaux at Infosec puts it down to end-users becoming quality-orientated. "They are more educated and require an increasing amount of software, whether it's management software or the network management through SNMP cards," he said. One factor differentiating the UPS and power devices sector from other categories of the IT market is the need for manufacturers to operate a dual strategy giving equal commitment to both the traditional IT channel and the more specialist electrical channel.

It is typical for vendors to deploy a classic two-tier distribution model to penetrate the retail and small business sectors, and then call upon the skills of electrical-focused resellers in situations where the point of contact is a facility manager or a mechanical contractor.

Vipin Sharma, VP EEMEA and India sales at power protection vendor Tripp Lite, says resellers with strong electrical credentials - which it dubs Critical Application Partners - possess an entirely different set of skills to resellers playing the conventional volume game. "These CAPs are specialised in installation, power audits, site preparation and identifying the right UPS with the right generator," explained Sharma. "They also perform on-site corrective and preventive maintenance of power maintenance of our units. These units, which are 500 kilos, are onsite managed devices and considered mission critical to the user."

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code