Content provided in partnership with

Technology Industry

SMBs switch to reconditioned UPS systems - from Coastal Business Machines among others

Communications News, Oct, 2001 by Sean Kelly

Enterprises with aging uninterrupted power supply (UPS) systems--especially those out of warranty--walk a fine line between investing in a new system or chance putting their network at risk in a power failure. Reconditioning older UPS systems, however, could be the way out of the dilemma.

In the UPS reconditioning and repair market, Coastal Business Machines (CBM), Randallstown, MD, receives the units in special returnable boxes--with prepaid shipping--at its headquarters or its Las Vegas office. Within five days, the UPS is returned to a business fully reconditioned, with a new battery and a two-year warranty.

Most Popular Articles in Technology: An overview of continuous data protection; Why all those current ratings?; Many countries now have a mobile penetration rate above 100%, report says; The Tata Group's big telecom gamble: VSNL's recent acquisition of Tyco ...; MEASURING BANK BRANCH EFFICIENCY USING DATA ENVELOPMENT ANALYSIS: MANAGERIAL ...; More »

"We adjust everything back like it was the day the unit left the factory," says Jonathan Sevel, founder and president of CBM. "We do down-to-component repair." CBM services UPS systems ranging from 700 VA to 3,000 VA. Small and midsize businesses (SMBs) comprise 60% of its customer base, although CBM has larger customers like IBM, ABC, CBS and Anheuser-Busch. "We support all the Arby's restaurants in the country," he adds. Costs of reconditioning UPS units range from $89 to $439, compared with purchasing new units for $150 to $4,400.

Sevel, 35, came up with the idea for the business while selling UPS and computer room air-conditioning systems, after graduating in 1987 from the University of Rochester-New York with a mechanical engineering degree. CBM--started with $10,000 Sevel borrowed from his father--initially sold UPS units. "About two years into it, I realized that the margins were getting smaller and smaller," he recounts.

The business struggled to survive for several years. Sevel came to a realization: "No one is servicing these UPS units--they're just putting them out there. Everybody is servicing the larger units, but not the little ones."

CBM turned into a pure UPS servicing company in 1993--and Sevel watched its 50% annual growth through 1998, which now has leveled off. He looks for CBM to earn $3.5 million for 2001, an increase of about $900,000 from last year. The company, with 32 employees, services 20,000 units per year, with the capacity to service twice that figure.

CBM does not compete against UPS manufacturers--in fact, it has an alliance with American Power Conversion to service its out-of-warranty UPS units, and also deals with other UPS companies. With an estimated 15 million units in the field out of warranty after two years, however, Sevel says more small businesses may look to UPS reconditioning to get a reliable system, without digging too deeply into their pocketbooks in a soft economy.

Technology Industry

SMBs switch to reconditioned UPS systems - from Coastal Business Machines among others

Communications News, Oct, 2001 by Sean Kelly

Find Research Guides for:

Find Featured Titles for: Arts

Most Popular Articles in Technology

Most Popular Publications in Technology