1Q12 UPS service revenues down 1% year-over-year

Revenues from the sale of UPS services in the first quarter of 2012 are roughly 1% less than in the same period last year.


Revenues from the sale of uninterruptible power supply (UPS) services in the first quarter of 2012 are roughly one percent less than in the same period last year. IMS Research, recently acquired by IHS Inc., has been tracking quarterly changes in this market since 2009. Over the years, the first quarter has proven to be seasonally slow, but never has it shown negative growth year-over-year.

The UPS service market includes service contracts, warranties, installation, battery replacements and preventive maintenance on UPS hardware. Growth trends in the UPS service market closely follow those seen in the UPS hardware market, which, according to IMS Research’s UPS hardware tracker, slowed down in the fourth quarter of 2011 and slowed down further in the first quarter of 2012.

Service revenues tend to lag hardware revenues by roughly a year. For example, while UPS hardware revenue growth slowed in 2008, service revenues continued to grow strongly until 2009, when the service market finally felt the effects of decreased hardware sales. The lag is attributed to the nature of service contracts, which are typically attached to UPS 12-18 months after sale of the UPS itself. Given that contracts account for roughly half of the total market, the effect is significant.

UPS Service vs. UPS Hardware Revenue Growth. Source: IMS Research

The outlook for the global market may not be so dim given that much of the decline is confined to Europe, whose economy continues to struggle. The weakening of the Euro against the dollar inflated the decline year-over-year for that region, since revenues are aggregated in US dollars. The Americas has a slightly better picture with positive growth year-over-year in Q1. Asia showed the greatest percentage increase year-over-year of the three major regions, as tends to be the case with most markets for data center infrastructure that IMS Research tracks. Liz Cruz, the analyst for this market, suggests that “much of the explanation for the slow quarter can indeed be attributed to seasonality and that Q1 is the slowest quarter for services. However, if the UPS hardware market growth continues to slow, service revenues in 2012 may grow significantly less than in 2011, when they increased by 15 percent.” 

No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2013 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
A cool solution: Collaboration, chemistry leads to foundry coat product development; See the 2015 Product of the Year Finalists
Raising the standard: What's new with NFPA 70E; A global view of manufacturing; Maintenance data; Fit bearings properly
Sister act: Building on their father's legacy, a new generation moves Bales Metal Surface Solutions forward; Meet the 2015 Engineering Leaders Under 40
Cyber security cost-efficient for industrial control systems; Extracting full value from operational data; Managing cyber security risks
Drilling for Big Data: Managing the flow of information; Big data drilldown series: Challenge and opportunity; OT to IT: Creating a circle of improvement; Industry loses best workers, again
Pipeline vulnerabilities? Securing hydrocarbon transit; Predictive analytics hit the mainstream; Dirty pipelines decrease flow, production—pig your line; Ensuring pipeline physical and cyber security
Upgrading secondary control systems; Keeping enclosures conditioned; Diagnostics increase equipment uptime; Mechatronics simplifies machine design
Designing positive-energy buildings; Ensuring power quality; Complying with NFPA 110; Minimizing arc flash hazards
Building high availability into industrial computers; Of key metrics and myth busting; The truth about five common VFD myths

Annual Salary Survey

After almost a decade of uncertainty, the confidence of plant floor managers is soaring. Even with a number of challenges and while implementing new technologies, there is a renewed sense of optimism among plant managers about their business and their future.

The respondents to the 2014 Plant Engineering Salary Survey come from throughout the U.S. and serve a variety of industries, but they are uniform in their optimism about manufacturing. This year’s survey found 79% consider manufacturing a secure career. That’s up from 75% in 2013 and significantly higher than the 63% figure when Plant Engineering first started asking that question a decade ago.

Read more: 2014 Salary Survey: Confidence rises amid the challenges

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.