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These slides are from a webcast presented on 06/30/10. A full audio recording is available for download on our website www.vdcresearch.com. During this webcast, Chris Rezendes, Executive Vice President, VDC Research, presents the end-user data from our UPS and Surge Suppressors, 2010-2014 Market Requirements and Opportunity Analysis. Specifically, he discusses: the user view of growth opportunities for power protection products; historic trends and future estimates for user spending on power protection product— including the effects tighter credit markets and capital budgets had on user’s IT budgets; significant drivers for increased and/or decreased user spending on UPS and surge suppression products—including the potential impact of alternative deployment methods, such as managed services; technical and commercial trends—including potential disruptions to predictable demand for specific UPS topology types and energy storage technologies; and key success requirements for a number of key stakeholder groups.
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VDC Research Webcast:2010 Power Protection Report –2010 Power Protection Report UPS and Surge SuppressorsChanging Requirements Power Growth in UPS and Surge Markets
Industrial Automation & Control PracticeChristopher Rezendes – Executive Vice President
Changing Requirements Power Growth in UPS and Surge Markets
David A. B. Laing – Senior AnalystTim Shea – Senior Analyst
Recording Available
These slides are from a webcast presented on 06/30/10
A f ll di di i il bl f d l d tA full audio recording is available for download at:
http://www.vdcresearch.com/market_research/industrial_automation/freeresearch.aspx
1 – 2010 VDC Research Group, Inc.
VDC Research Group
Complimentary marketing data on the
Industrial Automation & Control Markets is available on our website at:
www.vdcresearch.com
2 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice
Today’s Speaker
• VDC Research Group Founded in 1971, continuous, profitable operation for nearly 40 years Focus on a number of embedded and niche network market segments 1,000 clients annually …90% technology suppliers, tech investors
Ch i R d E ti Vi P id t• Chris Rezendes – Executive Vice President 19 years experience in embedded, industrial, defense and other mission critical
and high available technology industries 14 years experience in senior management and leadership positions at a
number of technology solutions and professional services organizationsnumber of technology solutions and professional services organizations 2 years DARPA contracting Chris has advised many of the largest and most respected technology
companies in a number of technology segments worldwide Chris is a graduate of Harvard University Chris is a graduate of Harvard University
3 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice
Agenda
Introduction
Historic Trends and Future Estimates for End User Spending
Key Drivers for Market Growth
Key Drivers for Decreased SpendingKey Drivers for Decreased Spending
Key Success Requirements
Closing Remarks
Q & A
4 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice
Survey Demographics – Enterprise UsersSt t ti b d t / l ti t d i l k t
• Surveys covered enterprise and consumer market t
Strong representation by product / solution set and regional market
Product Coveragesegments
• There were 334 respondents to the enterprise survey
• The survey launch used multiple sources and partners to achieve the desired product and regional coverage
Surge25%
UPS25%
regional coverage
• There was a good mix of business roles, business types… Operations IT
Both50%
Finance
• …and applications / markets that utilize power protection products
• In addition to enterprise and consumer users, this l ll d h l
APAC22%
Regional Coverage
program also polled channels
• We asked a broad range of questions about Their businesses Their power management and power protection requirements Experiences with technologies and vendors
Americas58%EMEA
20%
22%
p g Investment plans
5 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice
Survey Demographics – Consumer UsersA i ht b t d ith h i b t th i l lit i ll t
• 480 unique, individual responses are captured in th d t b
As might be expected with consumers, more emphasis on surge…but the regional split is excellent
Product Coveragethe consumer survey database
• The consumer launch was targeted to provide a balanced view of small business and home users of power protection products
• The survey launch used a panel resource to
UPS15%
• The survey launch used a panel resource to ensure high quality of responses and meet the optimal mix of user types and locations
• Although this survey was targeted at consumers and small business there was some channel
Surge58%
Both27%
representation
• Topics covered were similar to those defined in the enterprise survey
APAC24%
Regional Coverage
Americas47%
EMEA29%
24%
6 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice
For Context, a Recent View of Power Protection DemandU t 2008 i t ll ll d t / k t i ith CAGR i f 5 12%
2007-2008 UPS and Surge Suppression Market Estimates – Supplier Revenues
Up to 2008, virtually all products/markets were growing; with CAGRs ranging from 5 -12%
$4,000
$4,500
$2,500
$3,000
$3,500
APAC
$1 000
$1,500
$2,000
,EMEA
Americas
$0
$500
$1,000
20 kVA and 2008 20.1 KVA and 2008 Surge 2008Under 2007 Over 2007
gSuppression
2007
7 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice
A Modest Rebound in SpendingTh UPS k t i i b t i t lik l t tt i th i CAGR
As compared to 2009, do you expect your or your client's 2010 level of spending
• The data shown is for 205 enterprise UPS users
The UPS market is recovering…but is not likely to re-attain the previous CAGRs very soon
8Increase Greatly (+10% or more)
your client s 2010 level of spending for UPS products to: • There is likely variation between product and
market – it is expected that some applications /markets will recover /grow faster than others
• Our analysis during the next few weeks will focus on this
43
19
Increase Slightly (+ 2 to 5%)
Increase Significantly (+6% to 9%) on this Which industries? What applications?
• Two larger reasons for the preponderance of ‘Stay about the same’ responses:
18
98
Decrease Slightly (-2 to -5%)
Stay about the same ( Even or +/- 1%) Power management and protection segments of IT budgets are among the most critical. Their defined roles are clearer than ever, and ROI complexity AND understanding are growing. These budgets did not crater, and they will not get pinched
13
8
Decrease Greatly (- 10% or lower)
Decrease Significantly (-6 to -9%) Second half of 2009 saw some ‘pop’ in spending that provided the beginning of a recovery from 2008 and the 2009 FH
0 50 100 150
8 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice
Product Selection Criteria – Enterprise User SummaryS d t f t t d li th t l d d t j tif th i dd d t
Top 5 Highest Rated UPS Hardware Feature Requirements
Top 5 Highest Rated Surge Suppressor Feature Requirements
Some product features may not deliver the customer value needed to justify their added cost
4.22Automatic voltage regulation
Hardware Feature Requirements
3.93Warranty
Feature Requirements
4.10Extended battery runtime
3 75
3.78
Al tl t
Failure indicators
3.79
3.84
Indicators/Audible alarms
Line conditioning
3.62
3.75
Connected equipment guarantee
Always on outlet
3.47"Hot swap" batteries 3.55Number of outlets
0 1 2 3 4 5 0 1 2 3 4 5
9 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice
Note: Scale 1 (low) to 5 (high)
Supplier Selection Criteria – Enterprise User SummaryP ti i b tit t f t ti d d l iti
Top 10 UPS Supplier Selection Criteria
Top 10 Surge Suppressor Supplier Selection Criteria
Promotion is no substitute for reputation and a good value proposition
4.17
4.22
Price/Value
Reputation for quality/reliability
Selection Criteria
3.87
4.11
Warranty coverage
Price/Value
Selection Criteria
4.05
4.12
4.12
Past experience with manufacturer
Warranty coverage
Customer service
3.74
3.78
3.80
Connected equipment guarantee
Delivery/Availability
Reputation for quality/reliability
3.77
3.78
3.97
Field Service and repair
Connected equipment guarantee
Delivery/Availability
3.43
3.57
3.63
Brand name recognition
Past experience with manufacturer
Customer service
3.71
3.72
Specification sheets/Product literature
Technical support & training
p
3.25
3.28
Recommended by others
Specification sheets/Product literature
g
3.0 3.5 4.0 4.5 5.0 3.0 4.0 5.0
10 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice
Note: Scale 1 (low) to 5 (high)
Sample Technology Trend: StorageL k f i f ti i l di i di t t t t h l th
What are major reasons you /your clients have not considered using or chose not to
• The survey asked enterprise users of battery t h l b t th i id ti f
Lack of information is a leading impediment to new storage technology growth
22%They are impractical for our application
have not considered using or chose not to use alternate energy storage technologies?
technology about their consideration of alternate types of energy storage
• There was nearly a 2 :1 adoption / rejection ratio of the 30% respondents that indicated consideration of new storage technology
34%
45%
Unsure of the technology and/or its reliability
We/they do not have enough information about them
• 11% of enterprise respondents were already using alternative energy storage products
• The ~70% of respondents that have not considered or have rejected new storage
6%
8%
They do not provide enough
They take up too much space
ytechnologies cited the reasons in the chart to the left
• The challenge: when you consider the previous slide as context, with all of its commodity-like market implications, capturing
20%
6%
They are too expensive
y p gstorage
y p p gprospects attention with more complex messaging is doubly difficult
Note: Does not sum up to 100% as multiple selections were allowed0% 10% 20% 30% 40% 50%
11 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice
Sample Market Development Trends: POS and PCsI 2010 2014 th ill lik l b h i th d d f k t / li ti
Point of Sales (POS):
In 2010- 2014, there will likely be changes in the demand from some markets / applications
The consumer and enterprise survey groups showed this to be a strong area of growth POS systems need uninterrupted power /access to network in order to complete transactions Customer transactions are more frequently “cashless” using credit or debit cards For a small business owner, being able to sell during a blackout can make all the difference Large stores may transition from small individual UPS units for each register to a UPS /Generator installation Large stores may transition from small individual UPS units for each register to a UPS /Generator installation
that supports the entire building
Desktop PCs: The consumer and enterprise survey groups show this to be an area of weakening demand for both surge
and UPS productsand UPS products Increased use of laptops and other portable devices which, by design, have battery backup Use of centralized “cloud computing” reduces the necessity of local desktop backup Use of solid state hard drives and backup drives, and new software reduce likelihood of disk crash and data
loss during power outage
12 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice
Uneven Surge Demand Could Feel Like RollercoasterN h bilit d d d f t d i th b t t b d l tNew purchases, more capability and advanced features drive growth…but not broad replacement
Consumers60%
“I don't think I will be
Enterprise51%
“We see increasedI don t think I will be buying anything new that
will need surge protection.”
Consumers
We see increased reliability and lifetime of
existing surge suppression units.”
EnterpriseConsumers77%
“We have some new things that need to be
protected against power
Enterprise30%
“ Replacement of less capable surge
suppression units (e.g., protected against power surge.”
pp ( gmore outlets, higher
rating, more features)”
13 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice
More Powerful Drivers for Increased UPS InvestmentM th i l h i IT & ti i iti d i d d f UPS d tMore than economic cycles, change in IT & operations priorities, drives demand for UPS products
Consumers40%
Enterprise29%
“New IT technologies such as solid state hard drives
“Increased use of Laptop computers versus
desktop computers.”
Consumers
as solid state hard drives, backup drives, and software lower risk of power related crashes and data loss…”
EnterpriseConsumers 60%
“New things that need UPS protection.”
Enterprise66%
“Expansion of business /facilities.”
14 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice
Summary – Things to ConsiderA thi th VDC t d ill l th f ll i t i
Enterprise Market:
Among many things, the VDC study will explore the following topics
What are the links between an improving economy and demand for power protection? Which segments / regions will have the highest growth potential? How does power management and protection tie in to the dominant themes of agility and productivity in
addition to traditional themes such as efficiency?
Technology Shifts: Will high voltage DC busses become more mainstream in data centers? Will new IT software /hardware create changes in corporate IT architecture that impact the types and
quantities of power protection products that will be needed?
Consumer Market: Will increased HDTV and 3D adoption increase the need for higher end power protection products? What will be the other home use products that will increase power protection demand?
Power Grid Trends: Will the increasing use of alternate energy sources cause imbalances between supply and demand thereby
increasing the likelihood of power quality issues?
Climate Changes: Will extreme weather conditions (ice storms, wind, lightning) aggravated by climate change create increased
d d f i d ?demand for power protection products?
15 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice
How will VDC coverage help clients stay on top of the market?
Track 1: User Requirements and Channel Analysis Volume 1: UPS
Volume 2: Power Line Surge Suppressors
Track 2: Supply Side Analysis Volume 1: UPS Under 20kVA Americas Volume 1: UPS Under 20kVA – Americas
Volume 2: UPS Under 20kVA – EMEA
Volume 3: UPS Under 20kVA – APAC
Volume 4: UPS 20.1 kVA and over – Americas
Volume 5: UPS 20.1 kVA and over – EMEA
Volume 6: UPS 20.1 kVA and over – APAC
Volume 7: Power Line Surge Suppressors – Americas
Volume 8: Power Line Surge Suppressors – EMEA
Volume 9: Power Line Surge Suppressors – APAC
STUDY PUBLICATION DATEACTUAL MARKET
SIZE/SUPPLIER SHAREFORECAST MARKET SIZE
Service Year 2010 2009 2010-2014
16 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice
Service Year 2010 2009 2010-2014
Q&A Session
Thank You for Attending this VDC WebcastgFor more information about VDC Research coverage of the global markets for Power Protection Products, or the recently published 2009 Position Sensor Market, Touch Screen Sensors and Displays Global Market Demand and Customer p yRequirements Analysis studies, please contact:
Christopher Rezendes – Executive Vice [email protected] | 508.653.9000 x120
David Laing – Senior Analyst / Program [email protected] | 508.653.9000 x146
Tim Shea Senior AnalystTim Shea – Senior [email protected] | 508.653.9000 x132
Bob Perugini – Account Executivebperugini@vdcresearch com | 508 653 9000 [email protected] | 508.653.9000 x144
17 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice