By and large, Eaton is thriving at the moment, especially given the weak macroeconomy it’s operating in.
“Eaton as an overall company is doing extremely well,” says Herve Tardy (pictured left), vice president of marketing and strategy for the vendor’s critical power and digital infrastructure division.
Dig into the numbers a little deeper, though, and you’ll find some variation. Eaton has three core revenue sources: big data center projects, more modestly scaled power infrastructure sales, and cables and peripherals from its Tripp Lite division. The first of those businesses, according to Tardy, is “going gung ho” at present thanks to ongoing construction and upgrades by co-located data center operators and hyperscale public cloud providers.
The market for uninterruptible power supplies, racks, power distribution units, and other physical power infrastructure products remains strong as well. “It was up 15% in Q1,” says Tardy, who expects it to hover at around 10% growth through the rest of the year.
Most of that momentum is coming from larger businesses, however. SMBs impacted by high interest rates and fearful of a recession are investing more cautiously.
“Some of these SMBs, if they spend the money and then they don’t have the business that comes in to support the infrastructure they just bought, or they roll something out and they don’t get the return on that, they’re going to be impacted in a much more immediate and direct way than a larger enterprise,” observes Steve Loeb (pictured right), Eaton’s vice president of distributed infrastructure sales.
Still, the only portion of Eaton’s business that’s just plain down at present is its peripherals segment. Double-digit declines in PC shipments (like the 30% plunge recorded by Gartner globally in the first quarter of the year) are slowing associated demand for cables, connectors, and other Tripp Lite products, Tardy notes.
Eaton expects sales to begin rebounding soon, however. “Q2 will get a little bit better,” Tardy predicts. “H2 will start to see this market getting back to growth somewhere in between five and ten percent.”
In the meantime, he continues, a tight labor market and ongoing office re-openings are partially offsetting the impact of stalled PC sales.
“Companies are spending a lot of money to try to make their employees happy,” Tardy says. “You need two displays? Here are two displays. You need docking stations? Boom, docking stations on every desk.”
That’s an especially helpful trend for smaller resellers who see profit in peripheral sales. “The big guys wouldn’t want to deal with that,” Tardy notes.
