Power Vents

UPS service revenues down

Revenues from the sale of uninterruptible power supply (UPS) services in the first quarter of 2012 are roughly 1% less than in the same period last year, according to IMS Research. The report also said that it is not unusual for first quarter activity to be seasonally slow, but this is the first time it there has been negative growth year-over-year.

The research includes service contracts, warranties, installation, battery replacements and preventive maintenance on UPS hardware. Growth trends in the UPS service market closely follow those seen in the UPS hardware market, which, according to IMS Research’s UPS hardware tracker, slowed down in the fourth quarter of 2011 and slowed down further in the first quarter of 2012.

Service revenues tend to lag hardware revenues by roughly a year. For example, while UPS hardware revenue growth slowed in 2008, service revenues continued to grow strongly until 2009, when the service market finally felt the effects of decreased hardware sales. The lag is attributed to the nature of service contracts, which are typically attached to UPS 12 to 18 months after sale of the UPS itself. Given that contracts account for roughly half of the total market, the effect is significant.

Europe down, Americas up

Interestingly, the outlook for the global market may not be as dim since much of the decline is confined to Europe, whose economy continues to struggle. The weakening of the Euro against the dollar inflated the decline year-over-year for that region, since revenues are aggregated in US dollars. The Americas has a slightly better picture with positive growth year-over-year in Q1. Asia showed the greatest percentage increase year-over-year of the three major regions, as tends to be the case with most markets for data center infrastructure that IMS Research tracks.

Find more information at www.imsresearch.com/downloads/dci_portfolio .

Paul O’Shea ■