At around 6 p.m. during a recent NAED regional conference at the JW Marriott Desert Springs Resort, I saw a pretty realistic snapshot of the electrical wholesaling industry at work and play. The conference program had wrapped up for the day and happy hour was rolling. Manufacturers were nervously waiting for their dinner dates with distributors who were running a few minutes late. Consultants were prowling the lounge area for contracts. And some sunburned reps, manufacturers and distributors were strolling through the lobby from golf games that ran late.
I chuckled to myself when I realized that I was in the same lobby at a similar NAED Regional 21 years earlier, and I wondered to myself what had really changed in the electrical market. I lost interest in the CBS reality drama Survivor years ago, but it hit me that all of the industry executives at the conference had made it through a gauntlet of downsizing, right-sizing, early retirement, or just plain getting laid-off. They are truly the survivors amongst us.
It's actually a pretty darn exciting time to be a survivor in the electrical industry. Sure, most segments of non-residential construction are still in the pits and probably won't show any real signs of growth until late this year or early 2012. Some of that growth won't necessarily come from these mainstay market segments. But several potentially game-changing technologies are already taking root in the electrical market that make it an exciting time for market survivors. Let's take a look at them.
The exponentially expanding pile of data being created every second of every day has to be stored somewhere, and on the corporate level much of that new data is being stored in data centers. Whether it's the relatively recent move to cloud-based computing and its need for secure data storage, or zillions upon zillions of YouTube videos, Facebook postings or Twitter tweets, much of this data is now at home in data centers. Even in the darkest depths of the recession, some massive data center projects were still breaking ground. If you want to get a sense of just how big this market is, poke around the web site of Digital Realty Trust (www.digitalrealtytrust.com), a real estate investment trust (REIT) that runs 96 data centers in 28 markets around the world.
Depending on whose forecasts you believe, there will be millions of electric vehicles zipping along America's highways by 2015, and they will be powered up by electric-vehicle charging stations wired up by electrical contractors. Judging by the crowds at booths displaying electric cars at the 2010 GreenBuild conference, your customers are really interested in the potential market for electric vehicle charging stations. When this market takes off, contractors will be in the best position to install EV charging stations. GE, Siemens, Eaton and Milbank Manufacturing are already selling charging stations; more electrical manufacturers are sure to follow.
Yes, some of the LEDs you can now buy from no-name offshore manufacturers from as replacement for 60W incandescent bulbs are laughably expensive and often emit light with a ghoulish blue cast. But when reputable lighting manufacturers like GE Lighting and WAC Lighting are spending 50 percent or more of their R&D budgets on LEDs and Philips Lighting is predicting LEDs will take 50 percent of the residential lighting market by 2015, there's something really huge going on.
People love to take shots at the solar industry. Sure, the industry is only really relevant in states like California, New Jersey, Massachusetts and New Mexico, where a lucrative package of government tax breaks, utility rebates and local financial incentives combine to drive the ROI on the installation of a photovoltaic system in a commercial or industrial application to less than five years.
Even the distributors and reps who got in on the solar game early in these select markets and are rocking solar right now will tell you the music may stop real fast if the 30 percent federal tax credit expires, which is a distinct possibility in this political climate. But solar is just a technological breakthrough away from being totally relevant in all markets.
Sure, any growth we see this year will be coming out of a historically deep trench. But it's the hand we have been dealt in the electrical market, so let's make the most of it. That's how survivors keep on surviving.