Generator Sales Remain Strong for Cummins
Cummins (CMI) said strong sales of diesel generators in overseas markets boosted its fourth-quarter profit by 5 percent. Sales in Cummins' Global Power Generation unit surged 28 percent in the fourth quarter to $840 million, driven by strong gains "around most of the world" and significant growth in alternator sales in Europe and China.
The company said its power segment saw strong sales gains in virtually every line of business, led by a 31 percent increase in commercial sales and a 34 percent rise in alternator sales.
With its core market of truck sales lagging, Cummins has benefited from record sales of generators, supported by strong demand from the data center sector.
Posted by Rich Miller 
February 01, 2008 | Permalink | Newsletter
January 21, 2008
Utility Hacks Tied To Foreign Power Outages
The security of generators and electric utility systems has been vigorously debated in recent months following the release of a video from the Department of Homeland Security showing a diesel generator being disabled by an electronic attack. The utility hacking issue is back in the news after the CIA told the SANS Institute that attacks have caused power blackouts in other countries.
"We have information, from multiple regions outside the United States, of cyber intrusions into utilities, followed by extortion demands," the CIA spokesman said at a SANS workshop on industrial security. "We suspect, but cannot confirm, that some of these attackers had the benefit of inside knowledge. We have information that cyber attacks have been used to disrupt power equipment in several regions outside the United States. In at least one case, the disruption caused a power outage affecting multiple cities. We do not know who executed these attacks or why, but all involved intrusions through the Internet."
Posted by Rich Miller January 21, 2008 | Permalink | Newsletter
December 19, 2007
i/o Data Centers Lines Up Generators
i/o Data Centers said today that it has reached an agreement with Empire Power Systems, the Caterpillar distributor for Arizona and Southeast California to ensure that it will have backup power for the build-out of its data centers. That will include 16 megawatts of backup power for i/o Data Centers' Scottsdale ONE facility, all supplied by Caterpillar.
"The Caterpillar name implies quality," said Tony Wanger, Senior Managing Director of i/o Data Centers. "Cat has a reputation as being a premium product in this market, and that matches up well with our desire to create a high level of confidence in our ability to host our client's most important information. In the arrangement with Empire, we get the highest quality of product and we also have access to the capabilities of a very large Caterpillar distributor."
Strong demand for diesel generators from data center builders and growing economies in China and India have contributed to a delivery backlog for large generators, with backlogs approaching a year for some larger models. Many new data centers are arranging for large volumes of power, which places additional pressure on manufacturing capacity. DuPont Fabros has 32 generators at its new facility in Ashburn, Virginia, while Google has received permits for up to 38 generators for its new data center in Council Bluffs, Iowa. With that level of demand, procuring generators becomes a key element of the data center construction timetable.
Posted by Rich Miller December 19, 2007 | Permalink | Newsletter
December 10, 2007
FCC Ruling May Spur Generator Demand
In an effort to keep phone and wireless networks online during natural disasters, the FCC is now requiring telecom and wireless companies to provide backup power for cell sites and remote telecom facilities. The new measures, prompted by an FCC review of telecom outages in the aftermath of Hurricane Katrina, are likely to increase demand for generators, batteries and other power protection equipment. The rules also pose a challenge for carriers with equipment in locations that may not easily support backup equipment due to space constraints or environmental considerations.
The new rules cover most local exchange carriers (LECs) and mobile service providers, who must provide backup power systems for central offices, cell sites, and remote switches and terminals. There are more than 210,000 cellular sites and about 20,000 telecom central offices in the U.S., according to industry statistics. The FCC says central offices should be able to operate for 24 hours without grid power, while eight hours of backup power is required for cell sites, remote switches and remote terminals.
The new rules could affect the market for diesel generators, which are widely used by data centers to provide backup power to keep servers running during grid power outages. The current data center building boom has led to lengthy delivery delays for 2-megawatt generators. Most central offices and cell towers would require smaller generators, but it's not clear how the additional demand for components and raw materials could affect production capacity for major generator manufacturers.
Posted by Rich Miller December 10, 2007 | Permalink | Newsletter
October 26, 2007
More on Generators and SCADA Hacking
The recent generator hacking demonstration from the Department of Homeland Security continues to generate discussion among Internet security experts. Ira Winkler, a former National Security Agency analyst and author, has done extensive "white hat" penetration testing of computer systems running the U.S. power grid. In a column at Internet Evolution, Winkler said the "Project Aurora" demo - in which DHS staff used an electronic attack to destroy a large diesel generator, apparently by altering the engine's operating cycle and causing it to malfunction - couldn't be expanded to threaten the power grid.
But vulnerabilities in power control systems known as SCADA (Supervisory Control and Data Acquisition) offer plenty of other avenues for skilled hackers to damage the grid, according to Winkler, who described a test he conducted 10 years ago on a utility company's network:
My team was supposed to perform a simple assessment of the security of a Website owned by a power company. The Website had a security vulnerability and provided us a connection to the company’s internal network. From there, we could get to any system in the company, including its SCADA systems. We were told by the security manager to leave out access to the SCADA system in our report, but we were allowed to download the personnel records of the CEO and CIO, so that the results would be hard for them to ignore.In discussions of the generator attack and SCADA hacking, many people are surprised that these kind of systems can be accessed via the Internet. Aren't they managed by some secure internal network?
Posted by Rich Miller October 26, 2007 | Permalink | Newsletter
October 15, 2007
Generator Shortage: A Barrier to Entry?
"Web 2.0 has joined Silicon Valley and the Rust Belt at the hip." So notes Nicholas Carr in his post today about the continuing supply-demand imbalance in the booming market for large diesel generators. In Caterpillar: Web 2.0 Giant, Carr observes that demand from data center builders for generators helped boost Cat's sales of electric power applications by 44 percent. That trend has also been a driver in the sensational rise in shares of Cummins (CMI), which have gained 137 percent this year.
Carr also passes along a report that will be of interest to data center builders:
I hear that supplies remain short today, delaying construction projects nine months or more. Rumor has it, in fact, that Microsoft and Google have locked up a significant portion of Caterpillar's production for the foreseeable future.The availability of generators is a major reason why we won't see any oversupply of data centers anytime soon. Lengthy backlogs for 2 megawatt generators persist, and in an environment of scarcity, Caterpillar (CAT) and other major generator manufacturers will look after their largest existing customers.
Posted by Rich Miller October 15, 2007 | Permalink | Newsletter
October 03, 2007
Schneier: Generator Hack Staged, Dubious
Prominent security specialist Bruce Schneier has an interesting post today about the Department of Homeland Security's claim that it has been able to destroy a diesel generator with an electronic attack. Schneier posted an anonymous email he received that challenges the interpretation of the report and video, which were widely circulated. An excerpt:
By the way - they were unable to hurt the generator you see in the video but did destroy the shaft that drives it and the power unit. They triggered the event from 30 miles away! Then they extrapolated the theory that a malfunctioning generator can destroy not only generators at the power company but the power glitches on the grid would destroy motors many miles away on the electric grid that pump water or gasoline (through pipelines).As usual, the resulting discussion in the comments at Bruce's blog is lively, opinionated and informative.
Posted by Rich Miller October 03, 2007 | Permalink | Newsletter
August 01, 2007
Generator Flaw May Affect Other Providers
The flaw that caused last week's generator failures and outage at 365 Main's San Francisco data center may be found in similar equipment used at other data centers, the company said today. The final incident FAQ attributed the outage to a weakness in a small but essential component in the back-up system known as a DDEC (Detroit Diesel Electronic Controller).
"This is a problem that is going to be felt by anyone who is using a Detroit Diesel MTU 4 controller," said J.P. Balajadia, 365 Main's Vice President of Operations. "We've talked with other people in our industry that have seen the same issues. We fixed our exposure in all of our data centers and are sharing the information we've learned with others who may be affected."
Posted by Rich Miller August 01, 2007 | Permalink | Newsletter
July 27, 2007
Cummins Shares Buck Wall Street Tide
There's a saying among traders that you "don't fight the tape." But as the Dow and other major indices plunged Thursday, investors were snapping up shares of Cummins Engine Co. (CMI) after its earnings beat analysts' expectations. Shares of Cummins closed at $116.15 a share, up 5.77 percent on the day, after trading as high as $122 a share early in the session. Prior to yesterday's opening bell, Cummins posted second-quarter net income of $214 million, or $2.13 a share. That was down 3% from $220 million ($2.19 a share) a year ago, but far outpaced the $1.59 a share analysts polled by Thomson Financial had been expecting.
As we recently noted,has Cummins has benefited from record sales of generators, supported by strong demand from the data center sector. That trend continued in the second quarter.
Posted by Rich Miller July 27, 2007 | Permalink | Newsletter
July 10, 2007
Generator Sales Boost Cummins Shares
Strong demand for diesel generators has helped make Cummins Inc. (CMI) one of the hot stocks of 2007. Shares of Cummins closed at an all-time high of $117.64 Monday, up 159% on the year to date. Investor enthusiasm was boosted by an upgrade Friday from Bear Stearns analyst Pete Nesvold, who predicted that new emissions standards for diesel engines will help Cummins gain market share.
With its core market of truck sales lagging, Cummins has benefited from record sales of generators, supported by strong demand from the data center sector. Sales in Cummins' power generation unit were $675 million in the first quarter of 2007, up 26 percent from the same period in 2006. Commercial generator sales rose 27 percent and alternator sales increased 43 percent, as both markets showed strength in almost all geographic areas. "The business saw a significant increase in demand for its commercial generator sets and alternators around the world - most notably in North America, India and the Middle East," the company said in its quarterly report to the SEC.
The data center building boom has created backlogs for the large generators that provide emergency backup power, with some facility operators reporting lengthy delays on new units of the most popular 2 megawatt models.
Posted by Rich Miller July 10, 2007 | Permalink | Newsletter
June 06, 2007
The Planet Spends $3M for Generators
The Planet said today that it will invest $3 million in new backup generators for its six data centers. As part of its initial investment, the huge dedicated hosting specialist has added two new Cummins generators at its Dallas data centers for increased backup capacity and redundancy.
The new generators will be installed at all The Planet's data centers, although the company did not provide a timetable for when the additional generators would be in place. There have been lengthy backlogs for large diesel generators, with a number of data center providers reporting delays of up to a year for 2-megawatt units. Huge demand for generators from Korea and China is a significant factor in the delays. For veteran data center operators like The Planet, existing vendor relationships and long-term planning are typically key in managing generator supply and demand.
Posted by Rich Miller June 06, 2007 | Permalink | Newsletter
December 18, 2006
Cummins to Host With AT&T
Where does a company that makes generators host its mission-critical web site? If you're Cummins, you host with AT&T, which will provide the manufacturer of diesel engines with 4,000 square feet of space at its Birmingham data center in the U.K. The new site will replace one of Cummins' aging data centers that was out of capacity.
AT&T said the contract with Cummins represents a multi-million dollar five-year hosting contract. "AT&T has always had a strong relationship with Cummins, and we felt that it had a superior data center solution with the added benefit of being on the AT&T global network," said Bruce Smith, Director of Computing Services for Cummins. "AT&T has been managing networks and collocation facilities longer than any other provider, and this experience factored into our choice." Cummins anticipates migrating systems into the AT&T facility by mid-2007.
Posted by Rich Miller December 18, 2006 | Permalink | Newsletter
December 06, 2006
Preventive Maintenance vs. Murphy's Law
When data centers experience lengthy downtime, it's usually because a piece of equipment has failed unexpectedly. Stuff happens, even in an environment designed for complete redundancy and 100 percent uptime, as shown in a series of data center outages last summer, which reminded us that generators and UPS systems and breakers sometimes fail, and sometimes decide to fail together.
Murphy's Law hasn't been repealed, but a comprehensive maintenance program can help data center professionals keep equipment fit and identify problems before they become headlines. Processor recently ran a series of articles reinforcing the importance of preventive maintenance for data center equipment. The series includes Keeping Your Power Supplies Safe: Preventive Maintenance for Power Devices, Cooling Devices Need Maintenance Too: Never Neglect Your Data Center’s Need To Beat The Heat and Maintaining Flooring, Racks & Furniture: Don’t Neglect The Basics In Your Data Center.
Posted by Rich Miller December 06, 2006 | Permalink | Newsletter
ALL STORIES FROM THIS CATEGORY: