Edge deployments and cloud and colocation service providers to drive global UPS hardware market past $10 billion in 2023

Following growth of 6.1 percent to reach $8.2 billion in 2018, the global market for uninterruptable power supply (UPS) hardware is set to expand to more than $10 billion by 2023, according to IHS Markit | Technology, now a part of Informa Tech.

The strong global macroeconomic backdrop last year helped spur significant data center investments from a broad range of data center operators, as reported by the UPS Hardware Market Tracker . These investments included purchases of UPS equipment designed to provide instantaneous emergency power to data centers.

Cloud and colocation service providers deployed UPS at the fastest rates in 2018, growing near double digits relative to 2017. Enterprise on-premises data center modernization and deployments of UPS in light industrial applications also contributed to the growth in the government, manufacturing, transportation and education vertical markets. Furthermore, the emerging trend of edge computing began to have an impact on market growth as enterprise UPS deployments at the edge gained momentum in retail and healthcare applications.

“For the UPS hardware market, 2018 represented one of the best years in nearly a decade,” said Lucas Beran, principal analyst IHS Markit | Technology. “That momentum has continued into the first half of 2019, with cloud and colocation data center deployments continuing in tandem with rising edge-computing deployments.”

IHS Markit | Technology is also witnessing an important technology transition in the UPS market: the adoption of lithium-ion batteries in place of traditional lead-acid options. UPS vendors began offering lithium-ion batteries towards the end of 2016, and 2018 marked the breakthrough year for adoption in data center applications, despite supply shortages. In 2018, more than 200 mWh were deployed, primarily in North America by large cloud and colocation service providers with UPS deployments above 500 kVA.

“The trend of lithium-ion battery adoption is accelerating in 2019, spreading to enterprise end users, UPS systems in the range of 100 to 500 kVA and even to some rack-based UPSs around 10 kVA,” Beran said. “Geographically, lithium-ion battery adoption is also growing in Asia and to a lesser degree, Europe, the Middle East and Africa.”

As adoption of lithium-ion batteries rises in data centers, the benefits of the technology will allow data-center owners and managers to proactively use their energy footprint for peak shaving and to generate revenue through utility services such as frequency regulation.

UPS hardware market highlights

• [[[Single-phase UPS revenue grew 4.0 percent in 2018 compared to 2017, and three-phase UPS revenue rose by 7.8 percent.
• Asia in 2018 was the fastest growing region for the UPS market, up 9.2 percent year-over-year (YoY), while EMEA was up 5.2 percent and the Americas 3.4 percent.
• Schneider Electric, Eaton, and Vertiv held the top-three market share positions, accounting for 46.0 percent of market revenue in 2018.
• Globally, Huawei, Vertiv, and Delta gained market share last year while Schneider Electric and Legrand saw their shares decline.