California crisis spikes UPS product demand - Industry Trend or Event

Communications News, March, 2001 by Sean Kelly

The recent California power crisis caused a spike in demand for uninterruptible power supply (UPS) and power management products, with enterprises scrambling to stop rolling blackouts and brownouts from playing havoc with IT systems.

The crisis--resulting from deregulation, an energy-hungry computer industry and market power plays by out-of-state electric sellers--forced California to implement power conservation measures for the first time since World War II. The state ordered the rolling blackouts from central California to the Oregon border 500 miles north. By one estimate, more than one million homes and businesses were without power for several hours at a time.

The outages created a jump in UPS business from California companies caught off-guard by the blackouts. "There are a lot of phone calls and inquiries about putting in UPS systems where they didn't exist before," says Dick Walden, Liebert director of marketing for power protection products. "The customer went black, and all of a sudden the communications didn't work and the local area network went down. People who find themselves in this dilemma for the first time are what I would call `emerging critical users.' They suddenly found themselves dependent on these electronic systems."

Darrick Finan, Invensys Power Systems' director of marketing communications, adds that his company's website is fielding 15% to 20% more hits from California, with small-end sales jumping 5% over last year. "We are starting to see an awful lot of inquiries about how to handle the different power situations," he says. "More and more orders are coming out of our West Coast distribution organization."

"This crisis has taken a lot of businesses by surprise," explains Todd Vancil, Minuteman UPS assistant marketing manager, "and they are scrambling to find a backup solution fast." He adds that unit sales increased by about 20% in January, compared to last year, among Minuteman's key California distributors. "Some of four distributors have been shipping products from other locations across the country just to meet demand."

Longer-running UPS batteries are topping the demand list. Walden points out that while some companies "were getting along with 10 to 15 minutes" on UPS batteries, "now they want 20 or 30 minutes, and some want even more. In the communications side, we've had requests for up to two hours of battery, and they have to put in a generator."

"We've seen increased demand specifically in our extended runtime UPS models," Vancel says. California enterprises, adds Finan, are "looking at more sophisticated UPSs that, instead of giving 10 to 15 minutes runtime, can provide a couple of hours."

The rolling blackouts are also forcing enterprises to reevaluate IT infrastructure priorities. "A typical IT or telecommunications shop will spend months testing frame relay, ATMs, switches, routers, all sorts of things--it's a very strategic decision for them," states Finan. "When you start having rolling blackouts, that is going to elevate UPS and power protection to a strategic level."