Research Overview
Educating End Users and Simplifying Procurement Could Help Boost Sales
The growing dependency on uptime along with concerns over outages and loss of productivity are contributing to a healthy growth in demand for uninterruptible power source (UPS) systems in the small and medium business (SMB) sector. However, many IT managers in smaller organizations tend to have limited knowledge of power quality issues, often leading to delayed and inaccurate purchases. The Frost & Sullivan SMB end-user survey reveals that 52.0 percent of medium-sized business and 39.0 percent of small businesses have their "need assessment for UPS systems" carried out by IT managers, pointing to an urgent need to improve awareness among the IT managers in these organizations. Further, simplifying UPS solutions and selections as well as making the purchasing process less technical from a power standpoint could ensure greater UPS sales in the SMB sector.
This Frost & Sullivan research service examines the North American SMB markets for UPS systems. It includes detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. This study also carries out a comprehensive examination of the markets to provide analysis across the demand and supply functions.
Modernization of Networks in the SMB Sector Leads to Increased Demand for Power Protection
With SMB organizations striving for greater competency, IT and facility managers are updating their communication infrastructure and digitizing operations to achieve improved efficiency and productivity. The study reveals that around 62.0 percent of medium businesses surveyed foresee an increase in their investment in IT equipment during the next three years and that there exists a direct correlation between IT investments and UPS investments. While this could translate into an increased demand for UPS systems, adoption of new network technologies such as voice over internet protocol (VoIP), wireless local-area network (WLAN), and blade server technologies is driving the modernization of UPS systems by replacing older systems for scalable and modular units.
As UPS vendors witness an increase in the cost of raw materials such as copper, steel, and plastic, intensifying competition, product maturity, and growing price consciousness among end users have lead to a decline in prices across all power ranges. "Prices are declining at an average of 3.0 percent per annum and the costs of low-end/low-power UPS systems in the range of below 1 kVA have dropped by as much as 10.0 percent," says the analyst of this research service. "This has led to lower profit margins and in addressing the cost pressures, vendors are either moving their manufacturing process overseas or employing the services of contract manufacturers."
Partnering with Computer OEMs Essential for Competing in the SMB Market
Currently, a majority of UPS sales is being carried out through a two-tier distribution network consisting of distributors and resellers. While having a strong presence in these channels is critical for market presence, aligning with original equipment manufacturers (OEMs) that supply computers, servers, and other network peripherals, could provide a decisive competitive advantage. The importance of this channel is likely to increase further with more and more computer manufacturers promoting online sales against selling through distributors or resellers.
Although price pressures and end-user indifference are a challenge to demand, revenues are expected to show a steady growth as a result of the continuing upgrades and modernization of networks. "Key competitive factors for UPS vendors in the SMB sector include the ability to provide value-oriented solutions, offer prompt technical support and services, use the right distribution networks, and sell reputable products," says the analyst. "The low-power UPS market – consisting of systems used in protecting desktop computers, small servers, wire-closets, and emergency security equipment, among others – currently constitutes a significant 71.6 percent of UPS sales in the SMB sector."
1 EXECUTIVE SUMMARY
- Market Overview
- Research Objectives
- Product Definitions
- North American Small Medium Business UPS Market Overview
- Summary of Survey Findings
2 STRATEGIC ANALYSIS OF THE SMB NORTH AMERICAN UPS MARKET
- Market Overview
- Introduction
- Market Challenges
- Market Drivers
- Market Restraints
- Forecasts and Trends
- Revenue Forecast
- Revenue Forecast by Power Range
- Competitive Analysis
- Competitive Structure
- Market Share Analysis
3 SURVEY FINDINGS
- Methodology & Sample
- Study Background
- Sample Segments
- Job Profiles
- Industry Profiles
- Current Protection
- Primary Protection
- Equipment Protected by UPS Systems
- Number of UPS Systems used Per Equipment
- UPS Topology
- Centralized versus Decentralized Protection
- UPS Power Range
- Spending Pattern
- Annual Spending on UPS Systems
- Investment on UPS Systems
- Future Investments Projections
- Purchase Flow Chart
- Flow Chart
- End User Need Assessment of UPS System
- Power Quality Problems
- Perceived Need
- Need Assessment
- Purchase Decision Maker
- Upgrade Factors for UPS Systems
- Upgrade Factors Introduction
- Upgrade for Redundancy
- Upgrade for Better Manageability
- Decentralization
- Increased Power Needs
- Summary of Upgrade Factors
- Measurement of Reliability
- Introduction
- Manufacturer Specification
- Past Experience
- Brand Name
- Published Reviews
- Third Party Recommendation
- Friend/Colleague Recommendation
- Summary of Reliability Factors
- Desirable Features
- Features Introduction
- Remote Management
- Business Management Systems
- SNMP
- Web Administration
- Parallel Tasking
- Automatic Data Backup
- Automatic Load Balancing
- Enhanced Compatibility
- Easy Scalability
- Summary of Desirable Features
- UPS Runtime Requirements
- Runtime Requirements Introduction
- Desktops/Workstations
- PC Peripherals
- Network Servers
- Mainframes
- Network Storage
- Network Equipment
- Telecom -EPABX
- Telecom -VoIP
- Emergency Systems
- Selection Criteria
- Selection Criteria Introduction
- Wide Range of Product Features
- Compatibility with Equipment
- Battery Replacement Service
- Good Reputation/Review
- Prompt Technical Support
- Ease of Scalability
- Upgrade Options
- Summary of Selection Criteria
- Choice of Channels
- Introduction
- Channel Selection of Small Business
- Channel Selection by Medium Business
- Channel Preference by Application
- Channel Preference by Application (Part Two)
- Supplier Performance
- Quality of Products/Service
- Product Performance
- Value for Price
- Delivery Time
- Range of Offerings
- Technical Support
- Warranty
- Summary of Supplier Performance
- Brands Purchased
4 FROST & SULLIVAN AWARDS FOR THE NORTH AMERICAN SMB UPS MARKET
- Frost & Sullivan 2005 Awards
- Customer Development Leadership Award
- Market Leadership Award
- Customer Satisfaction Award
5 DECISION SUPPORT DATABASE
- DSD
- Total Number of Enterprises
- Number of Small Enterprises
- Number of Medium Enterprises
- Number of Large Enterprises
- Business PC Installed Base
- Telecom Equipment Investments
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