Frost & Sullivan's research service titled Forecasts of the European market for UPS in data centers' provides industry challenges, market share as well as trends in both data centers and among UPS suppliers serving this market. In this study, Frost & Sullivan's expert analysts thoroughly examine the following applications: small, medium and large UPS systems in European data centers.
Growth in Financial, Banking and Telecom Sectors Drives Installation of Data centers There are plenty of opportunities for manufacturers of uninterruptible power supply (UPS) systems in data centers when compared to other end-user segments. This is evidenced by the strong 12 percent compound annual growth rate (CAGR) predicted in this application segment. This demand arises from building or renting out space in commercial data centers, along with a demand arising from the financial, banking, telecom and information technology sectors. "There is expected to be an increase in demand as data centers expand and as new data center construction projects are initiated," according to the analyst of this study. "UPS manufacturers are likely to cater not only to this demand for new systems, but also to the strong replacement cycle demand for legacy systems installed in large data center facilities during the Internet bubble." Financial firms are upgrading UPS equipment due to business needs, while the demand from the telecom companies is due to the rationalisation of the telecom industry. This increasing demand combined with changing data center requirements gives UPS manufacturers a unique opportunity to provide a comprehensive one-stop solution with appropriate technology deliverance and services. The demand for data centers is also bound to increase as the number and criticality of applications in data centers rise.
Financial stability of data centers likely to enable vendors to overcome restraints in this market
Despite the factors supporting data center growth such as the positive macro-environment in Europe and the financial stability of data centers, this market faces a number of challenges. The distribution of power in a data center facility, the integration of power infrastructure and doubts regarding the efficiency of UPS systems plague this market. However, the increase in demand from corporate clients for both space and sophisticated managed services is boosting market growth. "The financial sector is spearheading the present data center growth, with investments expected to continue for the next 2-3 years before slowly declining," notes the analyst. "There is an immediate demand from the telecom industry to upgrade IT equipment in the existing data centers." The co-location market is also growing rapidly, thus creating demand for new UPS equipment.