132 Fairgrounds Road
American Power Conversion Corporation is dedicated to solving customers' problems related to the reliability and productivity of information systems by providing innovative and reliable industry-leading solutions through the company's surge suppressors and related products that buffer computers and other electronic devices from the damaging effects of electrical power failures and surges, including electrical surge protection systems, power conditioners and uninterruptible power supplies.
Named one of Fortune magazine's "100 Fastest Growing Companies" in 1996, American Power Conversion Corporation (APC) is the world's leading supplier of power protectionsolutions.
Start Up, 1981
Founded as a Massachusetts corporation on March 11, 1981, the company manufactures products that improve the reliability and productivity of computer systems worldwide by protecting hardware and data from the ongoing threat of power disturbances through its line of electrical surge protection devices, uninterruptible power supply (UPS) products, power conditioning products, and associated software and accessories for use with computer and computer-related equipment. Protected applications include Internet usage, wide-area networks (WANs), local-area networks (LANs), mid-range computers, home and office workstations, file servers, Integrated Services Digital Network (ISDN) equipment, a variety of consumer electronics, as well as data, network, serial, coaxial (CATV), and telephone lines, and other electronic devices which rely on electric utility power.
The variation or interruption of power to sensitive parts of a computer system may damage or destroy important data or the computer's set of operating instructions. The company's UPS products provide protection from disturbances in the smooth flow of power while utility power is available and provide automatic, virtually instantaneous backup power in the event of a loss of utility power, lasting from five minutes to several hours, allowing the user to continue computer operations or conduct an orderly shutdown of the protected equipment and preserve data.
The company markets its products to business users around the world through a variety of distribution channels, including computer distributors and dealers, mass merchandisers, catalog merchandisers, and private label accounts. Major customers include Ingram Micro Corporation, Constellation Energy Corporation (the ninth largest utility company in the United States), Entex Information Services, St. Mary's Parish School Board (Louisiana), General Motors, and Deloitte & Touche. The company ranks as one of five domestic businesses providing a full range of UPS products and services worldwide in the 0-5 kVA UPS market. The company's principal competitors in the United States include Exide Electronics Group Inc.; Best Power; a business unit of General Signal Corporation; and Trippe Manufacturing Company. The company also competes with a number of other companies which offer UPS products similar to the company's products, including Exabyte, Fujitsu, Hewlett-Packard, Lexmark, NEC, Seagate, and Viewsonic.
Located in West Kingston, Rhode Island, the company's corporate offices are housed in a 166,000-square-foot facility, some of which is also given over to manufacturing capabilities. The company also leases four other facilities in that state: a 95,000-square-foot warehouse in North Kingston, a 334,000-square-foot warehouse in West Warwick, a 75,000-square-foot warehouse and manufacturing facility in Cranston, and a 116,000-square-foot warehouse and manufacturing facility in East Providence. An additional 151,000 square feet of manufacturing and warehouse space is split between two facilities located in Fort Myers, Florida, and the company's research and development facility located in Billerica, Massachusetts. The company's primary manufacturing operations outside the United States are located in Galway, Ireland, and in the Philippines. Other major facilities are located in Lognes, France (through the company's subsidiary American Power Conversion Europe S.A.R.L., this facility provides sales and marketing support to customers in Europe, the Middle East, the former Soviet Union, and Africa and its revenues are in the form of commissions from the Galway operations), and Tokyo, Japan, and the company utilizes third-party warehouse facilities in Australia, Japan, Canada, Singapore, The Netherlands, South Africa, and Uruguay for distribution into its international markets and has sales offices throughout the world.
Products
The company's growth reflects a similar growth in the UPS industry, itself a result of the rapid proliferation of microprocessor-based equipment and related systems in the corporate marketplace, as well as in small businesses and home environments. Personal computers (PCs) have become an integral part of the overall business strategy of many organizations and are now the workstation of choice in most office environments, as well as in many technical and manufacturing settings. As businesses continue to change their computer configurations from mainframe and remote terminals to linked PCs in LANs, PCs will continue to become increasingly important and it will become even more necessary to ensure that the data stored in, and operating instructions for, PCs are protected from fluctuations in utility power. Businesses are also becoming aware of the need to protect devices such as hubs, routers, bridges, and other "smart" devices that manage and interconnect networks. In addition to the demand that traditional server-based networks create for UPSs, the growth opportunities from the proliferation of peer-to-peer networks (where intelligence is distributed among all the devices in the network, rather than a single server) and wide-area networks (such as the Internet) will further stimulate UPS demand.
The company believes that the increasing awareness of the costs associated with poor power quality has increased demand for power protection products. Complete failures ("blackouts"), surges ("spikes"), or sags ("brownouts") in the electrical power supplied by a utility can cause computers and electronic systems to malfunction, resulting in costly downtime, damaged or lost data files, and damaged hardware. The company's strategy has been to design and manufacture products which incorporate high-performance and quality at competitive prices.
The company manufactures over 140 standard domestic and international UPS models designed for different applications. The principal differences among the products are the amount of power which can be supplied during an outage, the length of time for which battery power can be supplied, the level of intelligent network interfacing capability, and the number of brownout and overvoltage correction features. The company's present line of UPS products ranges from 200 volt-amps (suitable for a small desktop PC) to 5,000 volt-amps (suitable for a minicomputer or a file server cluster). The products can also support work groups utilizing either a LAN or a multi-user system consisting of a host computer and linked terminals.
Growth, 1993-Present
National Quality Assurance granted the company its ISO 9000 quality seal in 1993 and the West Kingston, Cranston, and Galway facilities have been audited to the even more stringent ISO 9002 standards. Gross revenue for 1993 was $250.3 million, up from $157.5 million in 1992.
In 1994, the company established operations in Galway through a subsidiary, American Power Conversion Corporation B.V. The Ireland facility, a 280,000-square-foot plant at Ballybrit Industrial Estate, provides manufacturing and technical support to better service the company's markets in Europe, the Middle East, Africa, and the countries of the former Soviet Union. A warehouse facility in Limerick, Ireland, is also used for storage of raw materials.
That year also saw the company expanding its Smart-UPS and Back-UPS families of products. The Back-UPS Pro series of products provide enhanced Back-UPS power protection for advanced workstations. The Smart-UPS v/s products are designed to provide power protection for small business and departmental LANs. In addition, the company developed new Smart-UPS products in the 700, 1000, 1400, 2200, and 3000 volt-amp category. The company also introduced data line surge protection with its ProtectNet product line. Software development achievements resulted in the introduction of new and enhanced versions of the company's software applications by adding to the number of operating systems with which the company's software applications were compatible. Gross revenue for 1994 was $378.3 million.
In April 1995, the company purchased a 41,000-square-foot facility in Billerica, Massachusetts, for $1.2 million, which was then renovated to accommodate growing research and development operations. That same year saw the company introduce 155 new products, including a major transition of its flagship product line, the Smart-UPS, from its five-year-old design to a new third-generation product feature set, including automatic voltage regulation and adjustment, a user-replaceable battery replacement system, and an internal accessory option slot. The company also introduced its Back-UPS Pro product, which was the first UPS product to be "plug & play" compatible with Windows 95, and the Smart-UPS v/s products, a line of UPS products for departmental server applications. Software product introductions included the company's first advanced UPS/Power Management software package tailored specifically for the IBM AS/400 environment. The company also reorganized its domestic sales force in 1995 in order to provide a much closer focus on the customer by creating customer units dedicated to specific customer groups. Gross revenue for 1995 was $515.3 million.
Continuing to investigate potential sites for manufacturing expansion in international locations, the company, in June 1996, established a manufacturing operation in the Philippines. The company purchased and upgraded a 70,000-square-foot facility located in a designated "economic zone" for $1.5 million. This facility manufactures some of the company's Back-UPS products to be sold in the domestic (American) market. In this year, the company's new product offerings included the Back-UPS Office, which was introduced in the second quarter. This product was designed to be solution-specific to the end user, especially those using the Internet. The company also added additional products which strengthened the company's position as an overall network solution provider. These products included web management capability with PowerChute plus software, a network manageable power distribution unit, and Masterswitch, which enabled a network manager to control attached loads independent of each other.
The company's commitment to enhance the overall productivity of its manufacturing facilities led to a reorganization in 1996 of its West Kingston, Rhode Island; Galway; and Philippines locations to move toward leaner, cell-based manufacturing processes in order to increase efficiency, decrease work in process, and improve the overall quality of the company's manufacturing processes. The company also adopted a "Focused Factories" philosophy aimed at reducing the number of products built in any given location in order to increase efficiency and overall quality.
The company was feted with awards and recognition in 1996, receiving nearly 40, including six for Back-UPS Office, four for Smart-UPS, three for Back-UPS Pro 280, three for Smart-UPS 2200, two for Back-UPS Pro PNP, and two for Smart-UPS 1000.
Major trends which affected the company's business in 1996 included growth of the Internet and associated web servers, the growth of networking and PCs in international geographies and emerging markets, and the onset of electronic commerce and the commoditization of the server market. Gross revenue for 1996 was $706.9 million, a 37 percent increase over 1996.
In January 1997, the company purchased a second facility in the Philippines for approximately $3 million. Also in 1997, the company entered the above-5kVA power protection market with the Symmetra Power Array. February of the same year saw the company complete its acquisition of Acquired Systems Enhancement Corporation. The seven-year-old privately held St. Louis, Missouri-based manufacturer of power management software and accessories for the UPS market was purchased in a $12.6 million stock swap. That year also saw more awards heaped upon the company, including ComputerWorld's "Reseller's Choice" Award, Computer Shopper's "Best UPS" Award, PC Bulgaria's "Editor's Choice" Award, and, for the sixth year in a row, the company was named "Best to Sell" by The Var magazine in the United Kingdom, bringing the total number of awards the company has received to over 100, more than all other UPS vendors combined.
A Look Ahead
As the computer industry continued to grow rapidly during the late 1990s, the company remained in a choice position to grow with it. In pursuit of this potential continued growth, the company continued to build new and enhance existing relationships with many leading technology vendors, including, in 1997, beginning the ProtectMe! with APC marketing campaign with Dell Computer Corporation, Gateway 2000, and Quantex Microsystems Inc., and a new sales and marketing relationship with Acer Sertek in Taiwan. The company also targeted the Small Office/Home Office market, which it identified as a growth opportunity for the future, and continued to target industries that were becoming more dependent on electronic systems, such as the telecommunications industry. The company also planned to continue to expand its international marketing efforts and manufacturing operations with a full line of internationally positioned products already available.
Principal Subsidiaries: Acquired System Enhancements; American Power Conversion Corporation B.V. (Ireland); American Power Conversion Europe S.A.R.L. (France).
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