Service Contracts Assure Steady Revenue Flows for Southeast Asian UPS Service Providers, Finds Frost & Sullivan
SINGAPORE, Aug. 23, 2012 /PRNewswire/ — The existence of a $305.3 million market for UPS service in Southeast Asia ensures a steady stream of revenue for service providers, as UPS products are usually sold with annual service contracts, which can be extended. These contracts keep the existing client base active and guarantee a continuous inflow of revenue.
New analysis from Frost & Sullivan (http://www.powersupplies.frost.com), Analysis of the Southeast Asian Uninterruptible Power Supply (UPS) Services Market, finds that the market earned revenues of $82.3 million in 2011 and estimates this to reach $117.6 million in 2016. Between the commercial and industrial UPS services markets, the former accounted for the higher revenue share for 2011.
Despite the security of an assured inflow, service providers have to stay on their toes due to economic volatility and the increasing competition in the market, which has, in turn, intensified price wars. Manufacturers with the capability to provide lesser priced services can recoup their investments through economies of scale but tier 3 manufacturers with niche service offerings have to fall back on product quality to stand apart.
“Apart from original equipment manufacturers, several third party service providers are entering the market with competitive pricing,” said Frost & Sullivan Program Manager Suchitra Sriram. “Nevertheless, the gradual rise in the spending capacity of customers have eased price pressures and enhanced the demand from large-sized banking and IT sectors.”
As consumers have gradually become aware that backup power is a critical element of any major infrastructure development, spending on UPS services has improved. There has also been a surge in the demand for superior power quality and efficiency of systems and it has boosted the sales of UPS products and services in Southeast Asia.
“Almost all infrastructure designs factor in the need for back-up power and incorporate at least the most vital back-up power system that can enable an orderly shutdown of all essential systems,” noted Sriram. “Further, the overall increase in production capabilities, especially in high-technology applications, has spawned significant demand for UPS systems and thereby, UPS services, keeping the market vibrant.”
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Analysis of the Southeast Asian Uninterruptible Power Supply (UPS) Services Market is part of the Power Supplies & Batteries Growth Partnership Services program, which also includes research in the following markets: Analysis of the Chinese Uninterruptible Power Supplies Market, Global Inverter Market for Renewable Energy Systems, and Global Hybrid Electric and Electric Vehicle Lithium-ion Battery Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
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SOURCE Frost & Sullivan