If you've been looking at the power protection sales in your business as an add-on or afterthought, you could be missing growing sales opportunities. Consider these facts from research group Frost & Sullivan — the forecast for 2010 power protection revenues is $9.6 billion, which represents an 8.4% growth rate from 2009. One of the top five market drivers for uninterruptible power supply (UPS) sales is market concerns about power quality and power grid reliability. Resulting power interruptions cost businesses and consumers between $26 and $50 billion each year. "As an industry, our products have never been as high-profile as they are today," says Rich Feldhaus, product specialist at Tripp Lite.
One of the first steps VARs must take to make power protection a more strategic offering is to begin educating themselves and then their customers. VARs need to understand the different types of UPSs, such as standby, line-interactive, and on-line, and when each is appropriate. "Power protection should be part of an integrated solution — not an afterthought," states Dan Ayala, VP of worldwide sales for CyberPower Systems. "However, VARs need to educate themselves about the incremental value of power protection solutions." Each of the companies represented in this article have resources available on their websites to help educate VARs.
Next, VARs must begin educating their customers. A Frost & Sullivan SMB end user survey highlighted that 52% of midsize businesses and 39% of small businesses have their "need assessment for UPS systems" conducted by IT managers. "IT managers know they need power protection, but they rely on VARs to make the best recommendations," explains Bill Allen, director of marketing for Minuteman Power Technologies.
UPS: Not Just For Servers
Traditionally, VARs have focused their UPS sales on servers and data-centers. Allen, Ayala, and Feldhaus all agree there is increasing demand for installing UPSs to support multiple applications. The electronic equipment that businesses rely on every day has become more and more critical for their operations. When there is a power outage, phone systems and security systems go down and companies cannot perform vital operations.
VARs can take advantage of this increasing demand by assisting their customers in contingency planning. Allen encourages VARs to begin asking their customers, "How long can you live without accessing email or your order entry systems?" "Do you have a plan for power outages of an hour or longer?" "Do you have remote facilities?" "How will a power outage at your headquarters affect those remote facilities and vice versa?" Once VARs begin having these conversations with their customers, they can begin offering backup and contingency services. These services could include hosting redundant file servers, having emergency power supplies available, and offering postemergency services to get things back to normal operating conditions. "VARs that do not or cannot adapt and take advantage of these opportunities will leave money on the table and miss out on increased profits," cautions Ayala.
Earn Green By Going Green
The other trend Allen, Ayala, and Feldhaus highlighted was power management. As energy costs continue to climb, customers are looking to VARs to help them better manage their power and become more "green." Power management could be a remote service the VAR offers its customers or a software solution sold for end users to manage.
While UPSs cannot make the entire network more efficient, vendors are making devices that are more energy-efficient. Many of these models can increase the energy efficiency of a UPS from 75% to 97%. The other feature UPSs now have is an economy mode. "A user can schedule their UPS to run in economy mode during defined off-peak hours and automatically switch to a higher-performance mode during peak network usage times," explains Feldhaus.
Remote power management devices can aid business several ways. First, they enable businesses with remote facilities to better manage their infrastructure. For example, when a remote router gets locked up and a piece of the network goes down, sending someone on a service call to simply cycle power off and then on can be an expensive proposition. "Since VARs often get these calls, remote power management can save the cost of these warranty calls or a service technician's trip to the site," says Allen.
Another option for VARs is to offer reseller-hosted power monitoring services for their customers through the use of power monitoring software and remote power management devices. Feldhaus adds, "Network managers typically use large network management systems [NMSs] to monitor their networks, but UPSs have different needs, and crews to support them." Offering a reseller-hosted power monitoring service enables the UPSs to be monitored independently from everything else, and the corresponding messages are not lost with the other status messages from the network.
If VARs incorporate these different strategies and services into their offerings, they can increase their profit margins. Indeed, our panel of experts estimates VARs could earn between 25 and 50 points of margin.
VARs can also reduce their exposure to warranty calls by selling power protection devices. Our experts claim a very large number of warranty service calls can be directly attributed to some sort of power problem. These "no-charge" warranty service calls can be expensive and erode both profits and customer relationships. Many end users do not realize that hardware is consistently being subjected to voltage fluctuations and electrical noise. Over a period of time, this degrades components and can ultimately lead to equipment failure.
By making power protection a more strategic offering, VARs can show their customers that they are not just interested in selling them solutions. Instead, they are interested in making sure their customers' businesses are protected and remain viable, even through a disaster. "Resellers are selling peace of mind when they sell power protection and contingency planning," summarizes Allen.