RACK MOUNT UPS MARKET ANALYSIS

Market Challenges And Opportunities

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.
• 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.
• 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.
• 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

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.

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.

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.

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 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.
• 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.