RACK MOUNT UPS MARKET ANALYSIS

The Rack Mount UPS Market size is expected to reach US$ 4.99 billion by 2031, from US$ 3.01 billion in 2024, at a CAGR of 7.5% during the forecast period.

Rack mount UPS are backup power systems designed to provide continuous power supply by mounting on standard IT racks. They protect critical infrastructure against power anomalies and outages. Rack UPS offer benefits such as space efficiency, flexibility, easy installation, and scalability. The market is driven by growing demand for data centers, increased need for power reliability and rise of modular UPS systems.

The Rack Mount UPS Market is segmented by product type, capacity, application, end-user and region. By product type, the market is segmented into online/double-conversion, line-interactive, standby/off-line, three phase, single phase and others. The online/double-conversion segment is expected to grow significantly owing to its ability to provide maximum protection for mission-critical applications.

Rack Mount UPS Market Regional Insights

• North America is expected to be the largest market for Rack Mount UPS Market during the forecast period, accounting for over 38% of the market share in 2024. The growth of the market in North America is attributed to the widespread adoption of rack UPS in data centers, presence of leading providers, and growing investments in edge infrastructure.
• The Europe market is expected to be the second-largest market for Rack Mount UPS Market, accounting for over 27% of the market share in 2024. The growth of the market in Europe is attributed to strict standards around uptime and the presence of many colocation facilities.
• The Asia Pacific market is expected to be the fastest-growing market for Rack Mount UPS Market, with a CAGR of over 8% during the forecast period. The growth of the market in Asia Pacific is attributed to rapid digitalization and data center growth across developing economies like India and Southeast Asia.

Figure 1. Global Rack Mount UPS Market Share (%), by Region, 2024

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Analyst Viewpoint

The rack mount UPS market is poised to grow at a steady rate over the forecast period driven by increasing demand for secure and uninterrupted power supply from data centers and telecom industry. Adoption of cloud-based services and critical business applications is prompting companies to invest in rack mount UPS systems to achieve higher power availability. Additionally, the expanding 5G infrastructure and proliferation of edge computing will significantly spur opportunities for rack mount UPS vendors over the next few years. North America currently dominates the market owing to sizeable investments by hyper scale cloud providers in the region. However, Asia Pacific is likely to emerge as the fastest growing regional market with growing data center capacity additions in China and India. On the other hand, requirements for larger space and high installation cost of rack mount UPS systems may hinder the market expansion to some extent. Moreover, growing preference of edge computing over centralized data centers is a challenge faced by global players. Nonetheless, rack mount UPS manufacturers should focus on developing smarter solutions integrated with IoT, remote monitoring, and analytics capabilities to gain an edge over competitors. There is also scope for targeting telecom tower infrastructure market which is increasingly adopting renewable energy sources thereby driving demand for robust UPS backup. Overall, the market is expected to steadily grow over the long run provided players devise strategies to capitalize on evolving technological trends and unlock latent demand across emerging economies

Rack Mount UPS Market Drivers

• Growing demand for data centers: The rapid growth in data generation and consumption worldwide is driving the demand for data centers. Data centers require high-quality, reliable, and uninterrupted power supply to operate smoothly. Rack mount UPS systems provide backup power supply and protect critical IT infrastructure against power outages. The rise of colocation, cloud, and edge data centers along with investments by hyper scale cloud providers such as AWS, Microsoft, and Google are fueling the adoption of rack-based UPS systems. Furthermore, the uptake of high-density computing equipment in data centers increases power load and creates the need for high capacity UPS systems in rack-mount form factors. Therefore, the proliferating data center industry acts as a major driver for the rack mount UPS market.

Instance

According to projections by the United Nations Conference on Trade and Development (UNCTAD), cloud services and data flows will grow five times from 2020 to 2025. International data flows increased by 21 percent in 2021 compared to the pre-pandemic period according to UNCTAD’s annual review. This points towards increasing reliance on digital technologies which will spur more investment in cloud and data center capacity.

• Increased need for power reliability: With rising digitalization across industries, the dependence on electronic devices and digital infrastructure is increasing significantly. Rack mount UPS systems provide reliable and clean power supply to electronic equipment and minimize downtime caused by power disturbances. The need for power reliability is especially high in critical facilities such as hospitals, financial institutions, and telecom infrastructure. Rack-based UPS with advanced battery management systems provide mission-critical electrical protection. Moreover, modular UPS systems allow easy scalability and redundancy for power backup as per changing requirements. Thus, the growing need for power reliability and uptime is expected to spur the adoption of rack mount UPS solutions.

Instance

According to the International Telecommunication Union, there will be more than 25 billion IoT connections globally by 2025. This IoT boom will catalyze the demand for rack mount UPS systems to ensure zero downtime operations of edge sites. In addition, green initiatives are prompting organizations to opt for energy efficient rack mount UPS over individual desktop UPS. They offer higher efficiency of up to 95% through technologies like online double-conversion. This eases operational costs in the long run.

Rack Mount UPS Market Opportunities

• Rising demand from emerging economies: Emerging economies like China, India, Brazil, and Southeast Asian countries are undergoing rapid industrialization and urbanization. This is resulting in increased deployment of IT infrastructure and construction of high-quality data centers to manage the exponential data growth. Developing countries are investing heavily in smart city initiatives as well which involve deployment of racks and modular data centers. Rack mount UPS systems are integral to ensuring power continuity for critical infrastructure. Low labor costs, government support, and availability of raw materials make emerging markets lucrative for UPS manufacturers. The rising adoption of rack UPS in developing regions provides significant opportunities for market growth.

Instance

The ‘Digital India’ initiative by the Government of India, for example, aims to deliver e-services across sectors via cloud platforms and fiber networks in the next few years. Fulfilling this ambitious goal will need robust data center infrastructure with rack mount UPS playing a key role. Similarly, countries launching smart city projects are investing in data centers, surveillance systems and other network infrastructure that rely on uninterrupted rack mount UPS power.

• Potential in hyper scale/edge data centers: The increasing amount of data and latency concerns are driving investments in hyper scale and edge data centers by cloud giants and colocation providers. Hyper scale facilities are massive in scale and require high-density, high-capacity power infrastructure. Edge sites are smaller but located in proximity to end-users, hence they also utilize rack-based UPS systems. Vendors are offering high power density UPS systems in space-saving forms tailored to hyper scale and edge sites. The mushrooming of hyper scale and edge facilities near metro areas, thus presents an excellent opportunity for rack UPS systems.

Instance

The increase in hyper scale and edge data centers driven by rising digital transformations across industries presents a massive growth lever for rack mount UPS market. As cloud and edge computing demand accelerates globally in coming years, rack UPS requirement will scale proportionately to guarantee power reliability within large and decentralized data center deployments emerging as a result. This will have a profound positive impact on the overall growth trajectory of the rack mount UPS market.

Rack Mount UPS Market Trends

• Integration of lithium-ion batteries: Traditionally, valve-regulated lead-acid (VRLA) batteries were used in UPS systems due to their low cost. However, they have limitations like low energy density, frequent replacement need, and slow charging. Lithium-ion batteries have emerged as a more efficient alternative with benefits such as long lifecycle, low maintenance, reduced weight, and compact size. Rack UPS manufacturers are integrating advanced lithium-ion batteries to enhance reliability and performance. Lithium-ion batteries also support modularity and scalability of rack-mount UPS systems. The integration of lithium-ion batteries is a major technology trend in the rack UPS market.

Instance

According to the U.S. Department of Energy's "2021 Batteries and Energy Storage" report, the adoption of lithium-ion batteries across various industries grew by over 20% in 2021 compared to the previous year. Rack mount UPS is one such area benefiting from this technology shift to lithium-ion. Major OEMs like Eaton, Vertiv, and Schneider Electric now provide rack mount UPS models that use lithium-ion batteries rather than lead-acid as a means to deliver higher performance systems to their customers

• Growing trend of intelligent UPS systems: Modern rack mount UPS systems are evolving with the integration of intelligent monitoring and predictive capabilities. Intelligent UPS can diagnose and anticipate problems before they occur using self-diagnosis algorithms and sensors. They can recommend preventive maintenance and streamline battery management. Intelligent systems also enable easy integration with building management platforms through open communication protocols. The inbuilt intelligence allows optimized performance and uptime. The development of smart, connected rack UPS systems is an important trend shaping the market's future.

Instance

according to the U.S. Department of Energy's 2021 Status Report, one data center was able to reduce its UPS electricity costs by 12% through remote monitoring and controlled shutdowns facilitated by an intelligent rack mount UPS system. The demand for intelligent rack UPS solutions has been growing considerably in industries like cloud computing, telecommunications, and healthcare that rely on distributed IT infrastructures. Their benefits of remote management, optimization capabilities, and predictive maintenance have compelled more data center operators and facility managers to include network cards as standard in new rack UPS purchases

Rack Mount UPS Market Restraint

• High purchasing and operating cost: Rack mount UPS systems involve substantial upfront investment as well as operating expenses. The systems require frequent battery replacement and ongoing maintenance which add to long-term costs. High-end rack UPS come with premium pricing. The additional expenses of professional installation, custom configuration, and life cycle services also deter adoption, especially among SMEs. Although enhancements like modularity aim to reduce costs, the overall pricing of rack UPS systems remains relatively high. Thus, the purchasing and operating costs pose a major restraint for market growth.

Counterbalance

Offering modular UPS systems can allow customers to invest incrementally. Instead of a hefty upfront cost, customers can purchase what they need and expand as their needs grow, thus reducing initial expenditures

• Complex installation process: Rack mount UPS systems typically involve complex configurations spanning hardware, software, batteries, and extended components. The installation requires robust physical infrastructure, custom-engineered configurations and professional electrical expertise. Improper installation can compromise the safety and effectiveness of the system. The complexity of deployment often necessitates extensive planning, certified technicians and custom rack designs. Thus, the intricate installation process acts as a restraint for end-users and hampers the adoption of rack-based UPS solutions.

Counterbalance

Promote UPS systems with modular designs that not only allow for easy expansion as needs grow but also simplify the initial installation process by breaking it down into manageable parts.

Recent Developments

New product launches

• In March 2022, Eaton announced the launch of its Edge Xpert rack mount UPS system to provide resilience for edge data centers. It offers 4-10 kW power range with lithium-ion batteries.
• In January 2021, Schneider Electric launched Galaxy VL 200-500 kVA UPS systems featuring easy installation and serviceability in a compact rack-mount form factor.
• In June 2020, Vertiv announced the addition of lithium-ion battery cabinets to its Liebert EXM UPS system for high-density rack applications like edge data centers.

Acquisition and partnerships

• In December 2021, Legrand acquired Gesellschaft für Systemdatenverarbeitung (GfS), a provider of datacenter solutions in Germany, to expand its rack UPS portfolio.
• In March 2022, Delta Electronics acquired MPI Corporation, a power magnetics and solutions provider, to strengthen its offerings in power infrastructure including rack power systems.
• In January 2022, Huawei partnered with Dubai Electricity and Water Authority (DEWA) to develop modular data centers pre-installed with Huawei's rack UPS systems.

Figure 2. Global Rack Mount UPS Market Share (%), by Application Type, 2023

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Top companies in Rack Mount UPS Market

• Schneider Electric
• Eaton
• Emerson Electric
• Toshiba
• Siemens
• General Electric
• Delta Electronics
• Huawei
• ABB
• Vertiv
• Tripp Lite
• Socomec
• Kehua
• Legrand
• Rittal
• Fuji Electric
• Riello
• Panduit
• CyberPower Systems
• Piller Power Systems

*Definition: The Rack Mount UPS Market refers to the market for uninterruptible power supply (UPS) systems designed to be installed on standard 19-inch racks and server cabinets. Rack mount UPS range from small single-phase systems to large three-phase systems and provide backup power protection to IT infrastructure against power disturbances. They find wide application across data centers, telecom facilities, edge sites and other mission-critical installations.