As news of anticipated growth in the South African uninterruptible power supply (UPS) market continues to spread, responsive international companies are adjusting their strategies to focus on this market. Despite offering profitable opportunities, the South African UPS market remains highly competitive. Only companies with focused strategies will be able to grab a sizeable share of this attractive market.
Frost & Sullivan finds that the South African Uninterruptible Power Supply Market earned revenues of $46 million in 2005 and estimates this to reach $84 million in 2010.
“The progressive modernization of the South African economy is driving the sales of new UPS systems,” notes Frost & Sullivan Research Analyst Fabrice Essono. “Continued growth in IT infrastructure is driving the adoption of new technologies, with some of these technologies such as blade servers in data centers relying on the technical support provided by UPS systems to work efficiently.”
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Large data centers rely on vast amounts of clean power and integrated processing, networking and storage features to function cost effectively. Blade servers have less cabling and space requirements than larger servers. The utility functions of blade servers have created an opportunity for UPS manufacturers to provide more blade-friendly product offerings.
“The market for UPS systems is also benefiting from South Africa’s current power crisis,” says Essono. “Recurrent power shortages across the country have created reservations about Eskom’s (the national electric utility) ability to meet the increased demand for electricity while boosting the sales of back-up power systems.”
At the same time, the South African government’s projected $61.3 billion investment into infrastructure, as stipulated in the Accelerated Growth and Shared Growth Initiative of South Africa, is set to have a positive ripple effect on market expansion. Achieving the goal of six percent GDP growth will make it necessary to construct additional electricity generating capacity with particularly strong demand for UPS set to emerge in the tourism and telecommunications sectors.
“However, high bandwidth and broadband costs are hampering the growth of IT infrastructure and are, in turn, restraining growth of UPS sales as few companies find it attractive to venture into the South African telecommunications industry,” says Essono. “To illustrate, the cost of broadband in South Africa is estimated at $0.29/Kbps - 200 percent more expensive than the cost of broadband in Egypt (the second biggest African economy).”
The small number of dominant end-user companies is narrowing the customer base for UPS systems in the South African market. Hence, establishing and maintaining long-term relationships with the biggest companies in the country should be a high priority for UPS firms.
With the market still in its growth stage, a greater effort will be required to broaden public knowledge about the use of power correction technologies in the workplace.
South African Uninterruptible Power Supply Market is part of the Power Supplies & Batteries subscription, which also includes research in the following markets: South African Gen-sets Market, Forecast of the European Market for UPS in Data Centers and, Latin America UPS Market. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.
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South African Uninterruptible Power Supply Market