VDC Research: Industrial Sensing, Networking & Control Market Blog

PAC Man Strikes Again in UPS/Surge Markets, ABB Acquires Thomas & Betts

After a long hiatus I have decided to get back on the blogging trail with albeit a belated blog about ABB's acquisition of T&Bat the end of January. I must admit that the bulk of the deal centers around T&Bs manufacturing of low-voltage and ultra low-voltage electrical products such as connectors, conduits and fittings as well as wiring management products for the construction, industrial and utilities markets. These are products complementary to the offering of ABB’s Low Voltage Products division, which includes products such as breakers and switches.

ABB previously acquired Newave back in December 2011 as a means of broadening its UPS offerings which one of my colleagues blogged about at the end of 2011 based on our Power Protection market intelligence. Of interest to this particular blog is T&Bs line of hard wired surge protection products and industrial UPS solutions and T&Bs  network of more than 6,000 distributor locations and wholesalers in North America which complements ABB's well established distribution channels in Europe and Asia.

Time and again VDC's research, which relies on feedback from extensive web and phone surveys, reveals that most customers are increasingly desiring to partner with suppliers that can provide a complete product portfolio but also best in class service and support. ABB instinctively realizes that in its corporate DNA and has completed a number of acquisitions in different markets in which VDC provides coverage, including process level measurement and HMI solutions.

Through its acquisition of T&B, ABB will be able to provide its customers a more complete selection of UPS and hard wire surge solutions with which to meet their needs and help them to move effectively compete in their respective markets. It also provides ABB a strong beach head from which to gain market share in the hard wired surge protection markets and the industrial UPS segments, both of which T&B has a solid footprint.

The overall market for power protection solutions is quite large but also fragmented on some levels, thus VDC anticipates seeing more PAC Man activity as suppliers continue to seek revenue growth not just through organic new product development initiatives.

ABB Finally Enters UPS Market with Acquistion of Newave

ABB is a major supplier of power and infrastructure products but it has had a gap with respect to power protection in that they did not have a significant line of Uninterruptible Power Supply (UPS) products.

In June of 2010 ABB thought it had solved this problem when it had an approved offer for Chloride which was a significant UK based supplier of industrial UPS products. A few days later, ABB was outbid by Emerson Electric. In an industry where the market for large industrial and data-center sized UPS are dominated by a handful of large suppliers such as Emerson, Schneider Electric (APC), and Eaton there was likely some relief the ABB had been rebuffed. Although there was some market and product synergy for the Emerson/Chloride deal, it would have been a better fit for ABB and Emerson likely overpaid with part of the strategy being to keep ABB out of the market.

ABB was left to console themselves with a partnership with General Motors to use electric vehicle batteries in grid power storage/stabilization projects that were similar/adjacent to the UPS market. This will likely be a growing market but it is at least a decade out before it becomes significant.

In mid-December, 2011 it looks like ABB finally found its extended UPS product line as it has an agreement to purchase fellow Swiss company Newave. Like before, it's a perfect match from a product line perspective and it gives the Newave UPS line the global ABB support and sale presence it needs to expand beyond the European market. As Christmas has now passed it looks like there will be no Grinch to step in and outbid them.  It looks to be getting more interesting in the UPS market in 2012 and beyond now that ABB has increased their presence.

Siemens Completes Exit Plans for Nuclear Market

As of yesterday, Siemens has announced plans to exit from the nuclear business. The final sticking point was the agreement with Rosatom which is a Russian state controlled nuclear power company. There was a risk here that this would offend the Russians who are or are likely to be customers for many of the other products and services inside the Siemens vast portfolio. Even so, Siemens still intends to supply the generator/turbines and control products that are used in both conventional and nuclear power facilities. This also frees up resources that can be applied to creating new products for renewable energy.

The breakup of the Rosotom deal also presents a benefit because it ends any non-compete complications that arose as a result of the Areva deal ending.

If there had been any doubt, the fact that Germany itself was phasing out nuclear, pretty much forced the hand of Siemens to take the risk of offending Russia instead of the German government and people that constitute a major share of its market. The fact that it might help appease Areva is a bonus.

Siemens does intend to continue supplying replacement parts and service for its installed base of reactors including the 17 in Germany.

A Few Thoughts on the Huge Southwest Power Outage

I was a bit surprised to see the magnitude and duration (it's still ongoing) of yesterday's widespread power outage in Southern California, Baja Mexico, and points eastward going as far as Yuma, Arizona.

To me, the surprising thing is that a single point of failure could create such a huge and lasting effect. No doubt, there will be lessons learned from this by event by the many that will study it. The failure was apparently a procedural error during a maintenance operation at a power substation in Arizona. I have a few thoughts generally related to our recently published reports on power protection products.

• If auto manufacturers or third parties could design some add-on hardware to Prius and other similar vehicles that would provide temporary generator / inverter function to power a few essential items at the owner's home or business, that would be a big seller.
• This event should capture the attention of both grid/power station operators and terrorists. A power grid has components that are hard to protect like remote substations and transmission line towers. A single point of failure should never have this large an impact.
• Businesses that invest in UPS, power protection, and standby generators will be doing tremendous business during events like these. That upfront expense with questionable ROI looks pretty good now.
• Businesses that at least have protection on their POS systems would have been able to sell their perishable or suddenly in demand items more easily unlike the others that could only take cash.
• People generally don't carry a lot of cash anymore. In the Southwest this morning, people without cash may never make that mistake again.
• In the Southwest, and even in places that didn't lose power, you might think about not using and unplugging any computers, TVs, or expensive gadgets unless you have a really good surge suppressor.
• My thoughts go out to those in the affected areas that have essential medical support devices in their homes, no doubt there are valiant efforts to make sure these devices and the people that need them are in good condition. The widespread blackout has caused massive traffic tie ups that surely made these efforts much harder.
• The markets for power protection and backup generators will increase particularly in the Southwest US.
• This was a good test of the emergency shutdown procedures and systems at the San Onofre Nuclear Generation Station (SONGS). It looks like they passed.

That's my quick take on it. I would be happy to hear other opinions on this subject. I may check back later once we see what happens next and find out more details of the corrective actions.

Isolation: A Smart Form of Insurance for your Data Acquisition Solution

Back in early March I blogged on the topic of isolation as it related to industrial networking products and the concept of investing in isolated network products as a form of insurance. It turns out the topic of isolation is also relevant to data acquisition hardware solutions. This topic is also relevant to a more recent blog in which we discussed the importance of accuracy and how that rated as the most important technical requirement cited by almost 600 survey respondents.

As the accuracy of a user's data acquisition measurements go up so does the need to protect their signals from noise as well.  The user needs to protect their signal on its entire path from the sensor input to the point of data conversion. In harsh environments such as those found in steel mills, automotive assembly, food & beverage and other applications in which the adverse impact of EMI, noise and other threats maybe more prevalent as is the need to protect against ground currents. Isolation eliminates ground loops between the measurement system and the signals you want to measure and protects the operator and equipment from effects of ground loops and high common mode voltages.

Isolation is defined as separation of one signal from another to prevent unintentional interaction between them. All multiplexed data acquisition systems contain a certain degree of channel-to-channel isolation; relay-based systems have galvanic isolation while solid-state systems do not. Galvanic isolation is the absence of any DC path. Most isolation methods eliminate all DC paths below 100 MΩ. Three major benefits of galvanic isolation are circuit protection, noise reduction and high common-mode voltage rejection, especially those developed by ground loops.

PC based data acquisition solutions makes possible an array of multiple channel measurements previously beyond economic reach of many applications. This has been accomplished by two major compromises, multiplexing and non-isolated inputs. Multiplexing is successful when the sampling rate is adequately high and the source impedances are sufficiently low. Lack of isolation places an entirely different kind of limitation on the type of input signals that can be connected.

If an application operates in an environment in which the need for isolation is prevalent VDC recommends users consider investing in a data acquisition solution with built-in isolation. Although there may be a cost premium associated to investing in a data acquisition solution with isolation, VDC believes that this will prove to be a wise investment in insuring that the data acquisition solution and equipment being monitored will provide a quick payback if the catastrophe of equipment failure is averted. 

Although the topic of isolation is not an integral part of the scope of VDC's 2011 Data Acquisition Solutions Market Intelligence Program we are always interested in covering topics which are germane to relevant research related issues or dynamics impacting the industrial automation world.

 

Blackouts versus “Smart Grid” -- which will win?

There have been several articles posted lately that discuss grid issues. In developing nations, there will obviously be growing pains as infrastructure has to be added or replaced. In some ‘war torn’ cases like Iraq, the infrastructure has to be rebuild almost from scratch. Here in the USA we would like to think that our power quality and reliability is world class but this would be wrong. A recent CNN article describes the situation as deteriorating where the incidents of non-disaster related blackouts as increasing 125% since the early 90’s. The US is now behind many other countries with respect to power quality and reliability. In the near term, this will likely drive increased demand for surge suppression and uninterruptible power products in the American market.

Some of these power quality issues are related to aging infrastructure and deferred maintenance but it also reflects increased usage of energy despite all of the conservation and green initiatives. As we discussed in an earlier blog, electric cars will also be likely increase the load.

Many people are looking for the “smart grid” to solve these problems. At the top level, the power generating and grid companies will have more control of the loads. Smart appliances and electric car chargers can be turned on and off remotely during times of high energy demand. From the demand side, customers will be given the opportunity to save (or avoid spending more) money by setting their appliances to run during lower cost/off peak hours. Sounds pretty good but these initiatives are still in their infancy.  Some utilities are installing smart meters in homes but without the rest of the smart grid technology in place, the full benefits are not being realized in the near term. Therefore, it is likely that the blackout rate will likely increase before it gets better.

One last area of concern is the amount of switching that will be taking place with a smart grid. Many of the surge suppliers we contacted while researching for the 2010 Power Protection Report are telling us that these events will likely create power anomalies such as spikes and dips.  Without proper protection, these events will take a toll on connected equipment particularly the advanced appliances and home entertainment that consumers are now buying. As consumers become more aware of the risks, they will increasingly take the multi tiered power protection approach favored by business and industrial entities. Our research found that even in lightning prone areas, new construction plans that included hard wired (whole house) surge protection only represented ~20% of the market. Based on this, it would seem that there will be a potential growth market for these products.

What Powers UPS and Surge Suppressor End Users?

In yesterday's webcast, we discussed our most recent findings from our UPS and Surge Suppressor study, in which we surveyed both enterprise and consumer users of power protection technologies.

Until 2008, nearly all products and markets with the power protection industry were growing with strong CAGRs ranging from 5-12%. Then the recession hit. However, we expect the UPS market to improve over the next several years, although it is not likely to occur at the same growth CAGRs seen before 2008. This slow, but welcomed growth will come as changes in IT and operations priorities drive demand for UPS products.

For more details on our thoughts and to see some preliminary findings about the UPS and Surge Suppressor market, we encourage you to listen to the recording of the webcast or scroll through the slides below.

Changing Requirements Power Growth in UPS and Surge Suppressor Markets

View more presentations from VDC Research Group.