ABB acquisition brings new power to UPS market

IMS report: Purchase of Newave could turn growing UPS market into a four-way race

12/14/2011


According to the analyst firm IMS Research,  ABB’s acquisition of Newave points to more consolidation in a market where the top 10 suppliers control 72% of industry revenues. It is a smart acquisition, given that the $7Bn market is projected to grow by an average of 7% per year over the next five years.

 

A year and a half after it was by outbid by Emerson for the purchase of Chloride, Switzerland-based ABB has returned to the data center-power area, this time looking closer to home. The recent announcement of acquisition of Newave SA, a fellow Swiss company specializing in Uninterruptible Power Supply (UPS) systems, continues the trend of large multinational organizations purchasing UPS manufacturers. IMS Research believes this most recent example could present a challenge to established players in the coming years.

 

Jason dePreaux, a Research Manager who studies the UPS market, maintains that the impact of ABB’s acquisition of Newave will be felt more in the future, as opposed to instantly. “When Schneider bought APC, and when Emerson acquired Chloride, each entity was already deeply involved in the UPS market," he said. "So, each time, it was a case of making a big UPS company even bigger. In contrast, ABB is not currently a major UPS player and Newave’s footprint is mainly in Europe. So, the effect of the acquisition will not be immediate on the market.”

 

Currently, over half the UPS market is held by the top three players - Schneider Electric, Emerson, and Eaton. Over the past five years, each of these companies purchased other UPS vendors to enhance geographic coverage and expand product portfolios.

 

Depending on how aggressively ABB moves to expand Newave’s business, it could challenge the supremacy of the “big three." dePreaux continues, “The reach of ABB is enormous and could accelerate the growth of Newave’s business. Today, Newave is the 7th ranked vendor in Western Europe, but much of the future market growth will be found in developing areas like Asia and Latin America. ABB’s resources could really kick-start Newave’s expansion in these regions.”

 

The trend is for vendors to expand beyond UPS and provide a full range of products and services centered on data center markets. dePreaux concludes, “I think this is a long term play for ABB. UPS is a critical part of data center infrastructure and services. When the deal closes, it won’t radically reshape the market but, over time, ABB could develop its position in to the point where we may need to redub the market leaders as ‘the big four.’”



No comments
Consulting-Specifying Engineer's Product of the Year (POY) contest is the premier award for new products in the HVAC, fire, electrical, and...
Consulting-Specifying Engineer magazine is dedicated to encouraging and recognizing the most talented young individuals...
The MEP Giants program lists the top mechanical, electrical, plumbing, and fire protection engineering firms in the United States.
integrated building networks, NFPA 99, recover waste heat, chilled water systems, Internet of Things, BAS controls
40 Under 40; Performance-based design; Clean agent fire suppression; NFPA 92; Future of commissioning; Successful project management principles
BIM coordination; MEP projects; NFPA 13; Data center Q&A; Networked lighting controls; 2017 Product of the Year finalists
Transformers; Electrical system design; Selecting and sizing transformers; Grounded and ungrounded system design, Paralleling generator systems
Commissioning electrical systems; Designing emergency and standby generator systems; VFDs in high-performance buildings
Tying a microgrid to the smart grid; Paralleling generator systems; Previewing NEC 2017 changes
As brand protection manager for Eaton’s Electrical Sector, Tom Grace oversees counterfeit awareness...
Amara Rozgus is chief editor and content manager of Consulting-Specifier Engineer magazine.
IEEE power industry experts bring their combined experience in the electrical power industry...
Michael Heinsdorf, P.E., LEED AP, CDT is an Engineering Specification Writer at ARCOM MasterSpec.
Automation Engineer; Wood Group
System Integrator; Cross Integrated Systems Group
Fire & Life Safety Engineer; Technip USA Inc.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me