Selling UPSs is a little like selling insurance. It is hard to convince the end user that it is necessary without going into the dreaded "what if" scenarios.
It is a simple equation really. Sudden power cuts, surges, brown outs, spikes, slumps, lightning strikes, and general acts of God can prove a nightmare for computers. Software simply isn't written to have its computations suddenly interrupted, and the consequences of changes to the power flow into hardware can be catastrophic.
Few are more aware of the potential damage that can be caused by power fluctuations than James Risby, managed services manager for Darwin-based integrator Computer Support and Maintenance.
Thanks to a heady tropical climate, Darwin can receive up to 80,000 lightning strikes during the wet season, which lasts only three months. Add to this problems caused by transient voltage and electrical noise, and you would think that Risby has struck a particularly fertile market in which to sell UPSs.
"In Darwin if you are not putting in a suitable UPS system you really are in trouble," Risby said. "It's not a question of a value add, or customer good will - I always address the issue with my clients."
Even granted the climatic extremes of the top end, Risby finds himself having to educate businesses regarding the importance of power protection.
"The locals tend to recognise UPSs as important, but we have a lot of southern state parent companies that are used to a fairly clean power supply, so we still have to do a fair bit of education."
Darryl McKeller, sales manager of Townsville-based network integrators Agire Computer Network is similarly placed. Agire's client base is largely made up of industrial or agricultural operations in remote areas where the power supply is scarce or unreliable.
Like Risby, McKeller recognises that his market is fairly well aware of the importance of UPS, however he also believes that more can be done when it comes to end-user education.
McKeller commented that while catastrophic events presented a major concern, vendor-generated sales material should pay more attention to minor events such as brownouts.
"The more common interruptions to power supply are often not as drastic, but can still cause tremendous problems to computer systems," McKeller said. "It is important to have technology that can see a problem coming, something that can measure minor fluctuations and respond to them quickly."
Agire works with two UPS vendors APC and Liebert, and believes that they are on a more or less equal footing, both in terms of end-user support and reseller services.
"We need to know that the vendor has a local presence and that they are capable of responding quickly to any concerns our customers might have. Resellers aren't electrical engineers, so UPS systems require a lot of vendor-based support," he said.
David Hein, marketing manager of Adelaide-based distributor Hitech Distribution, is similarly concerned that UPS vendors have a local presence, and are in regular contact with their resellers.
"There is a lot of UPS-specific terminology, parts and accessories that resellers aren't familiar with. UPS is about solving crises, and you can't turn around and say that you can't get there because you are too far away," Hein said.
UPS in the city - targeting the SOHOs
There is a stark difference between rural and regional UPS markets, and "clean power" metropolitan areas. Because power supply issues are not a major concern in most urban centres in Australia, city-based resellers face a much harder battle convincing end users of the potential benefits of power supply protection.
"Most people just see a box in the corner that flashes, and they don't really appreciate the protection it provides," McKeller said.
Convincing end users of the benefits of McKeller's "box in the corner" is never an easy process, however many resellers identify education as the key to opening up new markets.
While there is a certain recognition of the volume possibilities at the lower end of the market, most vendors continue to focus on the enterprise market where ISPs, mission-critical networks and data centres are driving steady growth.
APC marketing manager Caroline Gest described the ISP growth as explosive and confirmed that the vendor was providing programs to assist the channel in harnessing it.
"ISPs depend on their reputation for reliability, so UPS systems are a must," Gest said.
However, this kind of market sector emphasis and the growth in the enterprise market has largely eclipsed the potential for growth in the SME and SOHO markets. Dramatic price reductions over the last 12 months, due to an increasingly competitive marketplace, have opened doors of opportunity into these sectors.
Whereas once UPSs could have seemed like a non-critical expense, the price reductions and increasing importance of computer systems to even the smallest business have led to a re-evaluation of their importance for the SOHO sector.
"The price cuts have made UPS offerings really inexpensive, especially when you consider how much can potentially be lost without proper protection," Mckeller said.
Australian-based Marm UPS business development manager Stan Grimshaw pointed out that while the UPS market was growing across the range, he agrees with McKeller that there is a lot of work to be done in the SME space.
"The UPS market is really growing in the small business market - real estate agents, small surgeries and dentists," Grimshaw said. "Anywhere where computers are used to store important information, or are providing mission-critical type services are possible candidates for UPSs."
While larger vendors like APC are not necessarily targeting the SME sector at this stage, they certainly recognise the sector has potential for growth.
"SME and SOHO sectors are where the volume is, and there is certainly room for growth in that area," said Gest.
Apart from the proliferation of PCs generally, Gest believes that the tendency towards privatisation of government-owned services will further open the lower end metropolitan market.
"As these services move into the private sector, there is always a cut back in maintenance, and breakdowns become more frequent. UPS will become far more important to the SME and SOHO sectors when end users can no longer rely on government services," Gest said.
Unlike those UPS vendors that are waiting for some all-important vital signs of growth before investing heavily in the SOHO sector, James Fraser, senior sales engineer of vendor MGE UPS Systems is enthusiastic about the sales possibilities in this emerging market. He believes there have been a lot of misconceptions surrounding UPS systems and their implementation in the modern computer network. Fraser also sees the reseller channel as the vital link in the chain that will drive SOHO sector growth.
"Our education programs are designed to help resellers educate end-users," Fraser said. "Resellers really need to be able to convey how vital a UPS system is for the fluent operation of any computer system.
"In the past, a UPS was used in the domain of large mainframe or large network installation, where it was a cumbersome system which took up a lot of space. Now computers are used for essential tasks in even the smallest of offices and a minor power supply glitch can result in countless hours of man time."
The proliferation of PCs and networks in the SME and SOHO sectors has also led to a diversification of UPS requirements. Fraser believes the key to channel education programs in the UPS market is in providing resellers with the information they need to provide advice about the size and scope of the UPS solution they implement.
Michael Mallia, sales and marketing manager of Invensys, told ARN that he is already seeing rapid growth in the SME sector.
"The SME market area is growing very quickly as people are realising that they do in fact have UPS requirements, so the end-user education campaigns are really beginning to pay off," Mallia said.
Mallia believes the increase in competition in this sector has been good for the market, and feels that small SOHO UPSs are finally achieving the standard peripheral status that he feels they deserve.
"The key to effective sales lies in bundling. UPS offerings should become standard peripherals, and we are finally beginning to see that happen," he said.
One of the main difficulties faced by resellers when it comes to selling-through UPS systems is that the units are generally totally different from the rest of their product line.
Computer resellers are not experts in power supply issues, so the challenge for vendors is how to make the sale as painless as possible. While UPS vendors are well aware of the need for training and extensive ongoing sales and post-sales support, most appear to favour a similar approach.
It appears that most vendor education and support programs favour a three-pronged approach covering company requirement, power supply, and implementation variables.
Hitech Distribution's Hein said the Adelaide-based distributor worked exclusively with Sola because of their local presence and emphasis on reseller support.
"Resellers don't have the time to become experts in UPS systems as well as everything else," Hein said. "There's a whole terminology surrounding UPSs, as well as ongoing support issues."
According to Hein, UPS vendor training needs to focus on client assessment rather than simply sales.
Marm's Grimshaw agrees, adding that the key to UPS reseller support is a question of market recognition.
"We basically provide support according to the market environment. At the entry level, most of the offerings are really plug in and you're away. Mid-range enterprise can be very time consuming for the UPS reseller because their operations can be very large and virtually require an electrician on-site all the time."
When it comes to market identification and recognition APC has entered the virtual world offering an online client assessment.
APC's Gest told ARN that the site is designed to allow resellers to match their clients to an appropriate UPS product only by entering certain client details.
"We are also providing extensive education, including biannual seminars with both a technological and a sales focus," Gest said.
However, APC is most keen to promote its reseller lead-providing service, which consists of a database of potential sales throughout Australia.
MGE UPS Systems' Fraser told ARN that the company was conscious of the problems faced by the channel in this area and had designed training and support programs to suit channel requirements.
"We aren't going to try to teach them everything about UPSs. These guys are experts on PCs and on networks - they don't need to learn a whole new technology, they just need the right support," Fraser said.
The dreaded what ifs . . .'
By ARN staff
UPS sales invariably depend on the dreaded "what if . . . " scenarios. Like many UPS vendors, MGE UPS Systems provides resellers with some facts and figures about the potential damage that can be prevented with appropriately implemented power protection.
- 28 per cent of computer-system breakdowns are caused by electrical disturbances - outages, micro-breaks, voltage dips, interference, etc.
- Over one third of all companies suffering from a computer "disaster" take more than one day to recover from the disruption caused. Ten per cent take over one week.
- Approximately 15 per cent of companies suffering a computer "disaster" lose over $3 million, some 20 per cent lose between $750,000 and $ 3 million, over 33 per cent lose between $ 30,000 and $750,000.
- A recent survey of 450 leading companies showed that each organisation suffered an average of nine computer failures each year. In each case, 4 hours were required to put the system back into running order.
- It can take up to 48 hours to reconfigure a network following a power failure.
- Recovery of the data lost can take several days, weeks, months or be lost permanently.
- The 10 most commonly identified consequences of a computer-system breakdown are:
- Loss of business/customers, cashflow problems, inability to pay personnel, loss of operational data, disrupted management of customer accounts, loss of goodwill, drop in quality of customer service, loss of production, financial loss and loss of financial control.
- Insurance does not cover loss of market share, goodwill and damage to the company reputation due to a computer-system breakdown.
- Insurance claims are usually not settled until long after a computer "disaster" has occurred.
-Of all the companies that suffer a computer-system breakdown and do not have a survival plan, 90 per cent go out of business within 18 months.