1Q12 UPS service revenues down 1% year-over-year

Revenues from the sale of UPS services in the first quarter of 2012 are roughly 1% less than in the same period last year.

06/21/2012


Revenues from the sale of uninterruptible power supply (UPS) services in the first quarter of 2012 are roughly one percent less than in the same period last year. IMS Research, recently acquired by IHS Inc., has been tracking quarterly changes in this market since 2009. Over the years, the first quarter has proven to be seasonally slow, but never has it shown negative growth year-over-year.

The UPS service market 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 12-18 months after sale of the UPS itself. Given that contracts account for roughly half of the total market, the effect is significant.

UPS Service vs. UPS Hardware Revenue Growth. Source: IMS Research

The outlook for the global market may not be so dim given that 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. Liz Cruz, the analyst for this market, suggests that “much of the explanation for the slow quarter can indeed be attributed to seasonality and that Q1 is the slowest quarter for services. However, if the UPS hardware market growth continues to slow, service revenues in 2012 may grow significantly less than in 2011, when they increased by 15 percent.” 



No comments
The Engineers' Choice Awards highlight some of the best new control, instrumentation and automation products as chosen by...
The System Integrator Giants program lists the top 100 system integrators among companies listed in CFE Media's Global System Integrator Database.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
This eGuide illustrates solutions, applications and benefits of machine vision systems.
Learn how to increase device reliability in harsh environments and decrease unplanned system downtime.
This eGuide contains a series of articles and videos that considers theoretical and practical; immediate needs and a look into the future.
Motor specification guidelines; Understanding multivariable control; Improving a safety instrumented system; 2017 Engineers' Choice Award Winners
Selecting the best controller from several viewpoints; System integrator advice for the IIoT; TSN and real-time Ethernet; Questions to ask when selecting a VFD; Action items for an aging PLC/DCS
Robot advances in connectivity, collaboration, and programming; Advanced process control; Industrial wireless developments; Multiplatform system integration
Motion control advances and solutions can help with machine control, automated control on assembly lines, integration of robotics and automation, and machine safety.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.

Find and connect with the most suitable service provider for your unique application. Start searching the Global System Integrator Database Now!

Future of oil and gas projects; Reservoir models; The importance of SCADA to oil and gas
Big Data and bigger solutions; Tablet technologies; SCADA developments
SCADA at the junction, Managing risk through maintenance, Moving at the speed of data
Automation Engineer; Wood Group
System Integrator; Cross Integrated Systems Group
Jose S. Vasquez, Jr.
Fire & Life Safety Engineer; Technip USA Inc.
click me