Competitive Strategies Benchmarking in Datacenter Infra Industry

Competitive Strategies Benchmarking in Data
Center Physical Infrastructure Industry
Participants to Compete on the Basis of Creating Differentiation
Across the Product Life Cycle
September 2014
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Research Team
Suchitra Sriram
Program Manager—Asia-Pacific,
Energy & Power Systems
Suchitra.sriram@frost.com
Amit Kumar Singh
Senior Research Analyst
AmitS@frost.com
Lead Analyst Contributing Analyst
Research Director and Strategic Committee Leader
Ravi Krishnaswamy
Vice President,
kravi@frost.com

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Contents
Section Slide Numbers
Executive Summary 4
Market Definition 9
Industry Attractiveness 17
Profiling of Data Center Physical Infrastructure Vendors 22
Conclusion—Establishing Strategy Benchmarking 59
Appendix 63

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Source: Frost & Sullivan
Executive Summary
• The global data center market is witnessing buoyant growth at a time of increased
penetration of co-location and cloud computing businesses.
• An integrated, efficient, and scalable data center physical infrastructure is paramount in
order to sustain the demand arising out of the emerging data center trends, such as
server virtualization, installation of blade servers, data center modularity, carbon emission
norms, and so on.
• Large and extra-large data centers with floor area of more than 1 lakh square feet are
surging in numbers globally.
• The data center uptime requirement for a tier-IV facility has gone up from the level of
99.89% to 99.99995%.
• The above mentioned factors will impact the way the power system vendors are
competing in the market, putting tremendous pressure on solution packaging and
customisation, while not losing sight from the facility’s uptime.
• All the big brands are in the fray to create differentiation through innovation across the
value chain. The growth strategies are being re-defined and strengthening product
portfolio is becoming the norm.

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Executive Summary (continued)
• As the market leader is setting a benchmark on the front of market share and future
growth strategy, the other contenders in the industry are getting on track through organic
and inorganic growth strategies in order to gain maximum market share.
• Schneider Electric’s acquisition of M&C Energy Group in 2012 and successful business
integration has strengthened its capability to respond to the fast growing demand for
energy management services.
• Emerson has strived to create a balanced mix of power solutions to serve data center
facilities seamlessly while taking care of physical infrastructure and IT equipment.
• Eaton’s specialised data center offerings in information technology (IT) and data centre
solutions, called enclosure power distribution unit (ePDU™) and Eaton BladeUPS™, have
the potential to create a very strong differentiation from its rivals’ products by supporting
varying power levels in a rack, monitoring power consumption, driving individual and blade
servers, and so on.
• Similar to its peers, Socomec plans to double the turnover by 2020-22 by riding high on
two fronts of growth strategy—organic growth with the launch of high potential products
and growth through external acquisitions.
• ABB’s long presence in the market, mainly catering to the switchgears and utility focused
power system components, would help it develop a competitive advantage in introducing
its UPS to the data center market.

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Key Questions This Study Will Answer
What are the key competitive forces shaping the strategies of the OEMs?
What are the strategic directions of the industry participants?
How are the industry participants striving to create differentiation in the data center market?
How are the competitors positioned in terms of their competitive strategies against the market
leader?

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Executive Summary—CEO’s Perspective
1
The data center market in Southeast Asia has
started putting stress on return on investment (ROI),
uptime and business driven scalability, while keeping
a regular track of power usage effectiveness (PUE).
2
Integration of end-to-end infrastructure has become
the most compelling strategy of the facility and IT
managers across the data center operators,
specially in large and extra-large data centers.
..
3
The vendors are focused on building a product
portfolio revolving around IT-enabled power and
cooling infrastructure, while striving to create
differentiation on the front of efficiency and
professional services.
4
As the market demands integrated solutions, the
industry participants are relying heavily on the
acquisition route to build competitive advantage
through wider product portfolio and local support.
5
The competition is getting concentrated with a
handful of large global brands in this new market,
while smaller vendors are expected to join in as
value chain partners.

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Market Definition
Definition of Data Center:
A data center is a facility used to accommodate data processing and data storage equipment such as
computer systems, telecommunication equipment, storage and enterprise servers, and so on, along with
the provision of power and cooling systems to keep the system up and running in controlled environmental
conditions. The purpose of this facility is to provide enterprise-wide data processing and networking
services to various end users—telecommunications, healthcare, industrial, institutional, and banking and
financial services.
This research service takes into account the market for data center non-IT infrastructure solutions as
offered by the original equipment manufacturers (OEMs) of such solutions.
Tier-IV data center facility: This category of data center facilities are equipped with fully fault-tolerant,
redundant dual-powered capacity components, having multiple uplinks.
Data Center Types
Definition by Size, Sq Feet of
Raised Floor (Gross Area)
Average No of
Racks/Cabinet
Power Capacity, KW
(@5KW per Cabinet)
Small Data Centers 1,000 to 5,000 10 to 50 50–250
Medium Data Centers 5,000 to 35,000 50 to 350 250–1,750
Large Data Centers 35,000 to 100,000 350 to 1,000 1,750–5,000
Extra Large Data Centers >100,000 >1,000 >5,000

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Market Definition (continued)
Definition of Physical Infrastructure:
The physical infrastructure is all about bundling/packaging of various products (UPS, PDU, cooling, DCIM,
racks, projects, after sales support, and so on) under a single turn-key project order. The criticality and
scope of the order depends on the client’s requirement.
Physical Infrastructure Components in a Typical Data Center
Uninterruptible Power Supply System (UPS)
Rack
Power Distribution Unit (PDU) / Rack-PDU
Precision Cooling Systems
Data Center Infrastructure Management (DCIM)
Switches & Transformers
Electrical Wiring
Diesel Generator Set
Services

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Product Definition—Infrastructure Components
Uninterruptible Power Supply System (UPS)
• An UPS is a back-up power system used to provide continuous power to a device, despite a disruption
in an AC input power. Such systems can provide uninterrupted power from five minutes to several
hours.
• This system is the most significant component in the data center physical infrastructure for the supplier,
while the rest of the components are just meant for supporting the power back-up and power
conditioning activity.
Rack
• A rack is a standardized19-inch frame or enclosure for mounting multiple computers dedicated to use
as a server or related equipment. The category may also include 19-inch sub-rack assemblies and
23-inch telecommunication racks.
Power Distribution
• The function of a power distribution unit (PDU) is to receive electrical power from one source and
distribute it through several outputs such as cables and/or receptacles to peripheral equipment and
components of data processing facility. This equipment takes high voltage and amperage and reduces
them to more usable and appropriate levels required by the devices that are connected to it. It is
common to find the PDU being used in conjunction with an uninterruptible power supply (UPS).

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Product Definition—Infrastructure Solution Components
(continued)
Precision Cooling Systems
• Precision air conditioning systems help in maintaining the required temperature and humidity conditions
for a wide range of environment. Unlike comfort cooling equipment, precision air conditioners are not
used to cool people and can operate 24*7*365.
• The cooling technology for data center market can be categorized as
o Conventional computer room air conditioning
o High-density cooling systems—row-based and rack-based
o Chillers
o Airside components
Data Center Infrastructure Management (DCIM):
• Every data center will require some degree of monitoring the infrastructure in order to optimise the cost
and have a better control and management on the power and cooling facilities. Such requirement has
given rise to the demand for network infrastructure management software, called DCIM.
• The technology (DCIM) can help data centers measure IT usage effectiveness, PUE, and so on. DCIM
is an integral part of the total solution. DCIM may not be the USP for a vendor; it is just a top up
component.
• The DCIM concept is in its early stages of development, for several reasons, such as
o No single party can provide a total solution.
o It restricts the service provider to use a particular brand of equipment across all equipment types.
o The third party software companies can layer over anyone’s equipment.

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Product Definition—Infrastructure Solution Components
(continued)
Switches and Transformers
• A switchgear is defined as an assembly of switching and interrupting devices, along with control,
metering, protective, and regulating equipment. Important components of switchgear are as follows:
o Switching and interrupting devices—used to turn the power on or off; include circuit breakers or
disconnectors
o Control devices—check and/or regulate the flow of power
o Metering devices—used to measure the flow of electric power
o Protective devices—used to protect power service from interruption and to prevent or limit damage
to equipment
• A transformer is a voltage changer used either to step down or step up, depending on its installation
base. It is a crucial component in the transmission and distribution of electricity.
Electrical Wiring
• It is a web of insulated conductors to carry electricity across the various electrical equipment and IT
servers.
Diesel Generator Set
• It is a source of auxiliary power generation with the help of a diesel engine and an electrical generator.
Services
• This category may include an integrated offerings of data center design consulting, installation, and
service, project management, preventive maintenance and spare replacement, and so on.

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Challenges—Data Center Market
• The global data center market is witnessing phenomenal growth in online data trafficking and cloud-
based operations, which in turn, is triggering a net set of challenges in the form of data center
availability, monitoring, high heat densities, energy efficiency, and maintaining adequate power
densities, space constraints, and so on.
• The data center operators are expecting the facility infrastructure to deliver compelling business
benefits.
• The data center customers are looking for improved mean time to deploy new IT services from more
than 20 days to less than 6 days, which calls for a quick deployment of power and cooling
infrastructure.
• The data center uptime requirement for a tier-IV facility has gone up from the level of 99.89% to
99.99995%.
• The expectations are going high in terms of faster ROI, in less than 12 months, and improved flexibility
in deployment in line with the business requirement by integrated infrastructure.
• The operators are facing challenges in striking a balance between the facility availability, cost control,
and innovation on the front of strategic initiatives to make data centers simpler, more flexible, and more
efficient.

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Key Industry Challenges
Operational
Monitoring on
Minute Basis
Data center
Availability up to
99.99995%
High heat
Densities up to
12KW per Rack
Elevated
Differentiation Cost
Energy
Efficiency
(PUE)
Intensified
Competition
Low-priced
Chinese Brands
Space
Constraints
Operational
Challenges
Maintaining
Profitability
Acquisition
becoming Route to
Success
Green Solutions for
Carbon Norms
Stiffening Organic
Growth
Efficiency Issues
Data Center Physical Infrastructure Industry: Key Challenges, Global

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Industry Attractiveness

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Competitive Assessment—Threat of New Entrants
• Threat: Medium
• Impact on Profitability: Medium entry barrier level leads to higher potential for reduced price offering
by the new entrants, and hence negative impact on overall profitability of the industry.
Market Entry Parameters Barrier
Time of entry Medium
Cost of entry High
Accessibility to the large data center customers Medium
Technology acquisition (Product) Low
Technology acquisition (Software) High
Economy of scale High
Cost advantage on customer acquisition Low
Customer servicing High

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Competitive Assessment—Bargaining Power of Suppliers
• Bargaining Power: Stable
• Impact on Profitability: The stable bargaining power of suppliers will have a positive impact on
profitability.
Sales-enabling Factors Impact on Sales
Integrated physical infrastructure solution capability High
High switching cost for the vendors High
Strong brand loyalty/customer satisfaction Medium
Critical element for the customer’s core IT operation High
Competition intensity Medium

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Competitive Assessment—Bargaining Power of Customers
• Bargaining Power: High
• Impact on Profitability: High bargaining power of large and extra-large data centers will have a
negative impact on the vendor’s profitability.
Purchase-enabling Factors Flexibility
Payment terms Rigid
Service contract renewal rates High
Price margin Moderate
Likelihood to expand usage of the vendor’s infrastructure solutions High
Service turnaround time importance Rigid
Volume of sales High

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Competitive Advantage Sources Impact on Customer Acquisition
R&D and solution building capabilities High
Service support infrastructure High
Price optimisation through operational streamlining Medium
Customer value enhancement through multi-level touch points and
efficient communication channels
High
Project management capability High
Business scale Medium
Innovation in tandem with the growth rate of the industry High
Competitive Assessment—Rivalry Among Existing
Competitors
• Rivalry Among Existing Competitors: Stable
• Impact on Profitability: As the industry is consolidating, hence the market share is getting
accumulated with a few large suppliers, and the rivalry will have a mild impact on the profitability of
suppliers.

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Profiling of Data Center Physical
Infrastructure Vendors

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Strategic Intent
Schneider's core competency lies in its ability to offer world-class energy
management through power quality products including UPS, surge
protection device (SPD), filters/harmonics, monitoring solutions, and so
on globally.
Core Competence
Competitive Advantage
The company strives to mark its strong presence by building competitive
advantage in the data center market through a combination of its efficient
energy technology with engineering and project management solutions.

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Internal Forces
Strengths
• Offering integrated solutions in data centers/networks
• Global leader and strong brand recognition
• High innovation capabilities
• Strong portfolio of products complemented by established routes to market,
geographical sales presence, manufacturing footprint, and management skills
• Engineering and software capabilities
• Comprehensive services throughout the life cycles
• Dedicated high skills team
• A global presence with a strong ability to adapt to local needs
Weakness
• Loss of focus on the smaller product market, which accounts for a larger chunk of the
total and is a regular source of business, due to greater stress on its solution business
• Delay in offering time bound customisation due to the company's large and
complicated organisational structure

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Future Growth Strategy
• The company offers pre-configured, scalable energy efficiency solutions for
each business separately.
• It offers measurement and control of energy at the point of use through
innovation in global energy efficiency solutions.
• Schneider focuses on building a standard and modular energy
management platform to combine efficiency and flexibility.
• The company’s DCIM brand Struxureware has positioned it strongly in the
data center market by adding space for differentiation, apart from the
acquired products and technologies.
• Schneider maintained its product leadership through R&D investment
focus, as evident in the table in the next slide.
Focused on Energy
Management
Product Portfolio

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Future Growth Strategy (continued)
Ultra-high efficiency Symmetra-Megawatt UPS
Fuel-cell UPS
Capacity Management Software
Data Center Thermal Modelling
Data Center Design CAD Software
Row-oriented cooling systems
UPS
PDU/Rack-PDU
Utility Switchgear/Emergency Switchgear
Cable Management
Cooling
Genset
Static Transfer Switch (STS)/Automatic Transfer Switch
(ATS)
Transient Volt Surge Suppressor (TVSS)
Generator paralleling Switchgear
Racks
Energy management
Harmonics Filter
Services (Architecture engineering, installation auditing,
e-monitoring and analysis, training and maintenance)
R&D Focus
Customer Application: Data Center
Product Portfolio

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Business/Marketing Strategy
• The company’s competitive strategy revolves around building a product
based on best-in-class technology, channel access, optimal quality, and
cost, allowing it to achieve scale and pricing advantage.
• The strategy aims to boost the solution business (develop high-value
systems and services).
• Consolidate the product portfolio through acquisitions, alliances, and
partnerships.
• Schneider’s go-to-market strategy is well supported with a strong product
mix, innovative business models, and strategic alliances with engineering
and service companies.
• Being a strong global industry participant, the company stressed on
leveraging people and processes to achieve a localized solution for the
data center customers.
Go-to-Market Strategy

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Partnership/Alliance
• Schneider added a momentum to its growth strategy by striking a
partnership under two partner programs:
o Technology partnership under EcoStruxure Technology Partner
Program, aimed at developing solutions through Schneider Electric
EcoStruxure architecture
o Global strategic alliance partnership under EcoStruxure Alliances
Program
• Apart from inorganic growth initiatives through acquisitions, the company
collaborated with IT giants, IBM, Microsoft, and Cisco to drive innovation
and technology development, shape market trends, and develop a joint
go-to-market strategy around energy efficiency.

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Growth Through
Acquisition
• The company always maintained its acquisition spree to achieve a mix of
technology platforms, when packaged, complementing each other to build
a strong competitive advantage.
• Schneider Electric’s acquisition of M&C Energy Group in 2012 and
successful business integration have strengthened its capability to
respond to the fast growing demand for energy management services.
• In 2003, Schneider Electric acquired Clipsal securing leadership of the
Asia-Pacific (APAC) electrical accessories in data communication
markets.
• In March 2011, Schneider Electric acquired Summit Energy to broaden its
energy management services and solution portfolio and build energy and
environmental online reporting capabilities.
• Acquisition of Telvent enables the company to offer efficient solutions in
infrastructure and best-in-class software and IT capabilities.

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Operational Capability
• Multiple channels of access to a deep market base.
• Redefining marketing and communication expenses.
Fast Time-to-market
• Reduction in inventory turn by 25 days over 3 years.
• In order to maximise its profitability, the company established the
following synergies:
o Sales synergy through complete critical power solutions and
services business model
o Cost synergy through purchasing, R&D, sales and marketing
expenses, and back-office
Engineering and
Supply Chain
Performance

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Customer Value Excellence
Value Creation
Excellence
• Total solution capability
• Open, flexible, and scalable solution
• Enhanced co-ordination between people, process, and technology
• Application knowledge
• Industry expertise and experience

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Strategic Intent
Leading Technology and Competitive Solutions
Core Competence
The company’s core competence forms an integral part of Emerson’s
integrated power infrastructure solution. The solution spectrum is well
crafted across three broad sections.
• Power management through the non-IT and IT infrastructure
• Heat dissipation/thermal management
• Proactive management of data center infrastructure
The company’s growth excellence lies in its strong ability to amalgamate
power infrastructure with IT infrastructure to offer IT capacity planning
and management.

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Internal Forces
Strengths
• Chloride’s Trinergy from 200 to 1,200 KW stands out among the high efficiency brands.
• A best-in-class UPS with standard functioning configurations—maximum power control
(voltage and frequency independent, VFI), maximum energy saving (variable frequency
drive, VFD), high efficiency, and power conditioning.
• Emerson can offer most of the components in a data center facility including power and
cooling equipment.
• A unique IT versus infrastructure margin solution in the form of ‘Trellis’ data center
infrastructure management (DCIM) platform that cements the gap between a data
center’s IT equipment and facilities infrastructure.
• The acquisitions of Avocent, Aperture, and Liebert businesses has enabled the
company to offer customers best-in-class and comprehensive data center planning,
designing, monitoring, and controlling solutions.
Weakness
• A complex and centralized business process, along with a totally system-driven
organizational structure, may leave little space for flexibility in meeting the varying
service order execution challenges at the local level, which sometimes impacts the
on-time delivery of critical projects.
• The product portfolio lacks a wide range of switchgear and transformers,
filters/harmonics range, and so on.

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• The company’s efforts towards expanding a sustainable product portfolio
are concentrated on two major activities—in-house product development
and acquisitions of companies.
• Emerson is well equipped to handle evolving changes in demand for power
infrastructure and has been building a strong portfolio of power and cooling
products, services, and so on in the past couple of years.
• Emerson has strived to create a balanced mix of power solutions to serve
data center facilities seamlessly while taking care of both physical
infrastructure (barring building and communication carrier equipment and so
on) and IT equipment.
Focused on Grid to
Chip Solution
Product Portfolio

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• The company acknowledges the importance of organic efforts in the form
of sales and marketing and customer value enhancement.
• Emerson prefers to contact and work with large data centers directly. The
company has established its presence in every country in the APAC region,
either directly or through channel partners and system integrators.
• It has system integrators (SI) as partners to cater to small and medium
scale businesses. In some cases, when the customer has the design
capability/designer or has partnered with SI or electrical/mechanical
contractors, Emerson is flexible to supply the product only.
Go-to-Market Strategy
Partnership/Alliance
• Emerson leverages its strong relationship with IT vendors in order to reach
out to large and extra-large data centers. The company had the foresight to
identify the criticality of forging alliances with IT OEMs when IT companies
started to offer end-to-end IT and power infrastructure solutions almost 4-5
years back.

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• In the recent past, Emerson has been on an acquisition spree to
increase its product portfolio and strengthen its distribution channel.
• Emerson’s acquisition of Chloride brought in a strong base of Chloride
customers and commercial and industrial UPS product lines. Trinergy, a
modular UPS brand from Chloride, is the highest-selling product that has
helped Emerson enhance its growth. It also aims to revive its higher kVA
transformer-free UPS product line.
Growth Through
Acquisition
Key Acquisitions Strategic Intent
Avocent To strengthen its data centre infrastructure management (DCIM) line-up
Chloride To boost the growth of its UPS and data center portfolio

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• Aggressive marketing and management support amplifies Emerson’s
core competence to deliver grid-to-chip level solutions.
Fast Time-to-market
• Cost benefit comes through a streamlined value chain.
• The company has been able to articulate its visionary innovation to
customers through its robust product planning and sound execution
efforts.
Engineering and Supply
Chain Performance

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Seamless Integration
• It always focuses on differentiation strategy, creating distinct value for
the customers through seamless integration of products and services.
• Emerson chooses to charge a premium for rendering large complex
solutions, only when such solutions are feasible to execute as per
customers’ requirements.

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Strategic Intent
Core Competence
• Eaton prefers to develop a competitive advantage against its
competitors by launching new products every quarter.
• The roadmap embraces product innovation, market focus, and
strategic acquisition to achieve sustained growth.
• In the wake of increased concern over green-house-gas (GHG)
emission, the focal point has shifted from product performance to
product efficiency and Eaton’s core competence lies in efficiency
driven solution.

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Internal Forces
Strengths
• The Eaton Business System (EBS) empowers the company to capture the benefits of
scale, strength, and scope.
• It has an in-house team capable of designing the architecture for large clients in the
data center market.
• It has formulated and implemented an effective growth strategy and gained high
revenue growth by increasing its customer touch points manifold by opening a number
of service centers at strategic locations.
Weakness
• Eaton has a strong service team in Singapore but a rather small presence in other
countries in Southeast Asia such as Indonesia, the Philippines. The Singapore office
serves as a regional technical service support center in Southeast Asia.
• Eaton does not have a strong distribution network in all the countries in the region.
• Currently, it caters to only tier 1 and some tier 2 cities. It lacks presence in the tier 2
and tier 3 cities that are considered as the upcoming markets for power conditioning
equipment by most of the prominent UPS suppliers.

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Product Portfolio
• Having identified critical power application as the most demanding market,
the company aimed at building a value proposition in the form of small
footprint, high efficiency, and low weight offering by introducing Eaton
9395 275–550 kVA three-phase UPS, part of the Powerware® series.
• Eaton’s specialised data center offering in information technology (IT) and
data centre solutions, called enclosure power distribution unit (ePDU™)
and Eaton BladeUPS™ have the potential to create a very strong
differentiation from its rivals by supporting varying power levels in a rack,
monitoring power consumption, driving individual and blade servers, and
so on.
• Eaton extended its offering by empowering its BladeUPS brand with rack
power module (RPM) for advanced scalable power protection in high-
density computing environment.
Focused on Efficiency

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• The company focused on strengthening its market leadership position by
creating differentiated products, services, and technologies.
• Eaton targets 12% to 14% revenue growth through 2015, broken down as a
growth strategy regime: acquisitions 2%-4%, penetration of emerging markets
1.5%, market growth 7%, innovation and new markets 1.5%.
Growth Through
Differentiation
• In Southeast Asia, Eaton acquired Taiwanese UPS manufacturer, Phoenixtec,
Pulizzi Engineering, and Aphel Technologies which helped the company
strengthen its presence in the region.
• Eaton followed the idea of localizing capabilities in the emerging markets.
• Acquisitions are intended to build following:
o Leadership in a data center market in Southeast Asia
o New opportunities for growth and profitability
o Strong products and services portfolio
• November 30, 2012, Eaton completed its acquisition of Cooper, the largest
ever acquisition by Eaton. The acquisition combines Eaton and Cooper into a
new, premier global power management company named Eaton Corporation
plc. This acquisition has helped Eaton expand its business manifold.
Growth Through
Acquisition

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• Eaton identified sales cycle as an opportunity to create competitive
advantage by shortening it to create a differentiated customer
experience.
Shortening Sales Cycle
• Sales and distribution
• Application of EBS tools
• Supply chain through economies of scale
• Leveraging Eaton’s infrastructure such as global shared service centers
• Corporate cost reduction in the areas of corporate functions, back office,
data centers, and so on
Achieving Synergies

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Need-based Solution
• The company takes considerable efforts to understand customer needs
first and propose products/solutions to match its back-up power
requirements.
• Eaton’s strategic direction revolves around delivering value above the
cost of capital and transform into a better-balanced company in terms of
geography, end markets, and the business cycle.

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Strategic Intent
Core Competence
• The company has set its direction to reinforce its differentiation as a
specialist in a changing competitive environment.
• Socomec firmly believes in designing products with value-added
features and functionalities, and does not limit these features to certain
power ranges.

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Internal Forces
Strengths
• Socomec’s UPS solution incorporates innovative “3-Level” technology, built of
sophisticated power converters with fully digital controls.
• The company has a stronghold on its critical power, power control and safety, and
energy efficiency businesses, which remained stable supported by healthy growth in the
services business.
• The company’s entire range offers features that enhance performance, reliability, and
total protection. Socomec strongly advocates online double conversion (VFI) mode of
operation, which is the only working mode that guarantees total protection to the load.
Weaknesses
• The company lacks integrated solution capability, which is the need of the hour to
survive in the changing data center environment.
• Large and extra-large data centers look for project management capabilities throughout
the product life cycle, where, the company is weekly positioned in the competitive
landscape.
• The reachability to the data center market is limited due to a weak network with local
distributors and system integrators.

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Product Portfolio
• Socomec has been quite successful in identifying key market segments for
its products, and its product differentiation excellence mainly stems from
the fact that it designs and develops products that match the market needs.
• In another endeavor to focus and develop both transformer-based and
transformer-less UPS systems, Socomec has struck a partnership with
Panduit and Stulz to provide a single source of solutions for use in data
centers, encompassing electrical supply, cooling systems, and
infrastructure.
• While Panduit and Stulz optimize the performance of the physical
infrastructure and precision cooling, respectively, in order to get high
availability, efficiency, and sustainability, Socomec adds its expertise in
continuity and control of power for the data center.
• Such an initiative by the company is aimed at providing the customers with
“cloud-ready” physical infrastructure.
• The outcome of the partnership is a predefined solution, which can further
be customised to the requirements, encompassing pre-sales consultation,
development, installation, and ongoing support.
Solution Integration
Through Partnership

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• The company is currently focusing on two main market trends; the need to
reduce the cost of energy along with the emergence of alternative energy
sources, and the need for customers to efficiently estimate their power
requirements.
• Socomec is striving to re-position itself from a product specialist to solutions
specialist for expert applications.
Growth Through
Repositioning
• In order to compete with bigger rivals such as Schneider and Emerson
Network Power, the company has partnered with following order to build an
integrated solution:
o Dr. Braun Consultants, leading consultants in data centre planning and
construction
o IBM Deutschland, a leading company in the development and
implementation of integrated data centers
o Stulz, a leading company in the areas of design, production, and
distribution of data center cooling systems
o Equinix, a leading company in data centre infrastructure creation and
management
Growth Through
Partnership

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Growth Through
Acquisition
• Similar to its peers, the company plans to double the turnover in 2020–2022
by riding high on two fronts of growth strategy—first, organic growth through
the launch of high potential products and second, growth through external
acquisitions.

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• The company has restructured its organisation in line with its vision to build
the required capability and thereby keeping continuity in the average growth
in turnover at 10%.
• The company identified business integration as the priority issue and hence
planned to regroup various functions such as manufacturing, sales and
distribution networks, logistics, and R&D under a single management
structure.
Operational
Integration
• Socomec’s product differentiation excellence lies in its ability to design and
develop products that match the market needs.
• Quality control is another important aspect of the strategy which was taken
care of by mandating the most rigorous tests in its plants to ensure the
highest level of quality.
• The customisation too holds a strategic significance and hence a dedicated
department was set up.
• The engineering and project management department identifies
client-specific needs and designs solutions that match the exact client
requirements, while a dedicated service team takes care of specific service
solutions for the customized product to match the special requirements.
Product
Development

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Safety and
Continuity
• The key value propositions are continuity and safety of the site’s power
supply, guaranteeing maximum energy performance, and
cost-effectiveness throughout the life cycle of the installation.
• The physical infrastructure, comprising power supply to safety systems (fire,
access control, and so on) and critical operating equipment (air-con systems
and so on), is made available with maximum efficiency through the Green
Power 2.0 UPS and the Motorised or automatic Atys changeover switches.
• The company has successfully reduced the cost of energy by adopting
alternative energy sources and helping the customers efficiently estimate
their power requirements.

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• ABB’s differentiators:
o DC and AC portfolio
o DCIM
o Data center and utility
o Global footprint with local services
o International Energy Agency (IEA) and National Electrical Manufacturers
Association (NEMA) capability
Strategic Intent
Core Competence
Competitive
Advantage
• Product development, manufacturing, sourcing, and selling resources to
meet specific needs
• Capitalizing on the major trends such as increasing use of electricity in data
centers and rapid economic growth and urbanization in emerging Southeast
Asian markets

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Internal Forces
Strengths
• ABB has the wider coverage of the electric value chain for data center market that
includes utility links, circuit breakers, transformers, power distribution panels, UPS,
power distribution units, and so on.
• ABB has strong expertise in utility infrastructure, which the customers in data center
market will perceive to be valuable for their physical infrastructure needs.
• Acquisition of Newave and Thomas & Betts has brought in a strong product portfolio
of UPS ranging from less than 1 KVA to above 500 KVA, which will help them compete
with the industry’s strong competitors in the region.
Weaknesses
• As ABB is a new entrant in the Southeast Asian UPS market, it may take some time,
before it is able to establish a strong presence there. The market is highly brand
conscious and expects a comprehensive solution from the vendor.
• The company is yet to build a specialized team dedicated to develop solutions for data
centers, which is the prerequisite to compete in the data center market.

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Product Portfolio
• Acquisitions of Newave and Thomas & Betts have brought in a strong
product portfolio of UPS ranging from less than 1 KVA to above 500 KVA,
which will help ABB compete with the strong participants in the region.
• ABB’s long presence in the data center market mainly offering switchgears
and supporting power system components would help it achieve a
competitive advantage in introducing its UPS in the same market.
• A dedicated team has been put on the job to build a strong solution for
energy management through automation and power systems, packaged
with data center connection equipment.
• The solution will consist of a software offering asset management and load
management which will very well complement the power products
portfolio.
• ABB is focused on building modular solutions using its industrial
automation software to offer scale, flexibility, and upgradability.
Strengthening
Product Portfolio

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• ABB, being a strong corporate entity, leveraged its corporate capabilities
to compete and grow in the fast growing data center market.
• It has a center of excellence in Singapore, a global data center initiative by
the company, that is solely focused on driving the APAC data center
market.
• The company has strengthened sales activities and services in local
markets through its alliance with Rittal to support its growth strategies.
• The company relies heavily on the ability to develop an integrated solution
through acquisitions, investments, and partnerships struck in the last three
years.
• Both Newave and Thomas & Betts have established strong distribution
channels in APAC. Even though ABB is determined to use its name, the
brands and the channels acquired will not be changed.
A 360 Degree
Approach

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• ABB has made an entry into the UPS market in APAC in 2012 through the
acquisition of two big companies, Newave and Thomas & Betts. ABB will
be selling UPS in all the three regions—Southeast Asia, ANZ, and East
Asia.
• ABB has shifted its focus to tier-IV data centers, which form the fastest
growing segment in the region as the company is gearing up to compete
in this market segment through its strategically acquired companies such
as Power Assure and Newave, among others.
• The company is focusing on disciplined acquisitions to strengthen the
portfolio in order to reach out to a wider geography by addressing key
challenges such as business integration to ensure synergy and
subsequent value creation.
• A series of acquisitions by ABB have strengthened the company to secure
a strong competitive position in the data center market.
Growth Through
Acquisition

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• ABB has created a semi-virtual organization, called ISI, consisting of
professionals from the company’s 5 business divisions, partners,
R&D unit, and so on. The function of this organization is to simplify
the customer relationship and bring corporate-wide focus.
Operational Integration
Functional integration
• ABB identified customer relationship as its top priority and is targeting
data center as its high growth market.
• Decathlon, a DCIM brand from ABB is a stepping stone towards
creating a strong buyer’s value in the form of critical system functions
for both IT and infrastructure.

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Growth Strategy
Source: ABB Report; Frost & Sullivan
Company Acquired Year of Acquisition ABB Relationship Data Center Role
Ventyx 2010 Acquisition Energy management
Power Assure 2010 Minority owner
IT and facility load
optimization
Baldor 2011 Acquisition Motors, gensets
Validus 2011 Majority owner
DC data center
solutions
Newave 2012 Acquisition UPS
Thomas & Betts 2012 Acquisition Low-voltage products

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Conclusion—Establishing Strategy
Benchmarking

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Strategy Benchmarking
Schneider, being an energy specialist, has been able to leverage its strengths in strong
product offering and brand name to tap new opportunities in the emerging global data center
physical infrastructure industry.
The company is one of the pioneers in building and offering integrated solutions for data
centers and hence holds a leadership position in the market.
Other participants Emerson Network Power, Eaton, ABB, and Socomec, too are in the fray
giving a close competition to Schneider.
The study revealed that the market leader has certainly got a mileage from its long presence
in the UPS business in winning large projects from global data center operators and has set
a strong benchmark on the following fronts:

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Strategy Benchmarking (continued)
Key Strategies to be
Benchmarked
Schneider
Electric
Emerson
Network
Power Eaton ABB Socomec
Product line strategy **** **** *** *** **
Application focused
solution through
market-linked R&D
**** **** *** *** **
Go-to-market strategy **** **** *** ** ***
Growth through
acquisition **** **** *** **** *
Operational strategy **** **** **** **** ***
Customer value
excellence **** *** ** *** *
Champion
**Challenger
*** Defender
*Follower
Competitive Benchmarking Strategies by Schneider
Number of star (*) represents the degree of competitiveness against the market leader, Schneider Electric’s key strategies.
****

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Legal Disclaimer
Frost & Sullivan takes no responsibility for any incorrect information supplied to us by
manufacturers or users. Quantitative market information is based primarily on interviews and
therefore is subject to fluctuation. Frost & Sullivan research services are limited publications
containing valuable market information provided to a select group of customers. Our
customers acknowledge, when ordering or downloading, that Frost & Sullivan Research
Services are for customers’ internal use and not for general publication or disclosure to third
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photocopying, recording or otherwise, without the permission of the publisher.
For information regarding permission, write to:
Frost & Sullivan
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Mountain View, CA 94041

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Market Engineering Methodology
One of Frost & Sullivan’s core
deliverables is its Market Engineering
studies. They are based on our
proprietary Market Engineering
Methodology. This approach, developed
across the 50 years of experience
assessing global markets, applies
engineering rigor to the often nebulous
art of market forecasting and
interpretation.
A detailed description of the
methodology can be found here.

65P832-27
Additional Sources of Information on Power Systems
Market
• Southeast Asia Critical Power Infrastructure Services Market
• Analysis of the Load Bank Market in Southeast Asia
• Asia-Pacific UPS Market Update 2012
• Southeast Asian Modular Data Center Market
• Analysis of the Global Uninterruptible Power Supplies Market

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Table of Acronyms Used
Southeast Asia Association of Southeast Asia Nations
ATS Automatic Transfer Switch
DCIM Data center Infrastructure Management
EBS Eaton Business System
ePDU Enclosure Power Distribution Unit
GHG Green-House-Gas
IEA International Energy Agency
NEMA National Electrical Manufacturers Association
OEM Original Equipment Manufacturer
PDU Power Distribution Unit
PUE Power Usage Effectiveness
ROI Return on Investment
RPM Rack Power Management
SPD Surge Suppressor Device
STS Static Transfer Switch
TVSS Transient Volt Surge Suppressor
UPS Uninterruptible Power Supply
VFD Variable Frequency Drive
VFI Voltage and Frequency Independent

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The Frost & Sullivan Story
The Journey to Visionary Innovation

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The Frost & Sullivan Story

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Value Proposition—Future of Your Company & Career
Our 4 Services Drive Each Level of Relative Client Value

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Global Perspective
40+ Offices Monitoring for Opportunities and Challenges

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&
Transportation
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Instrumentation
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Communication Technologies
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& Food
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& Process Control
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Technologies
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Industry Convergence
Comprehensive Industry Coverage Sparks Innovation Opportunities

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Integration of 7 Research Methodologies Provides Visionary Perspective

73P832-27
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Leveraging Career Best Practices to Maximize Impact

74P832-27
Our Blue Ocean Strategy
Collaboration, Research and Vision Sparks Innovation

Competitive Strategies Benchmarking in Datacenter Infra Industry

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