Liebert Raises Prices on Cooling Products update from August 2006

The price of cooling large data centers just got even more expensive. Emerson Network Power has announced that it will raise prices on its Liebert product line, with an average increase of about 5.5 percent. Liebert is one of the leading makers of computer room air conditioning (CRAC) units that are essential components of data center cooling. Emerson said the increase was a reaction to higher commodity costs.

"Current trends in rising material costs are significantly impacting most of the components used in the equipment we manufacture," said Scott Dysert, president of Liebert North America. "We have been able to minimize the impact of these rising costs on our customers through aggressive negotiations with raw material suppliers and continuous efficiency improvements."

I don't doubt that commodity costs have increased. If so, it would suggest that competing makers of CRAC units and other cooling products face a similar dilemma. But with a large number of data center construction projects in the pipeline, it's also an opportune moment in the supply-demand cycle for Liebert to make this move.

At the depth of the data center downturn, equipment for new data centers was available for a song through bankruptcy sales. That meant Liebert units could be found at attractive prices, which limited the manufacturer's pricing options. There was chatter at the time that Liebert even bought back some surplus units themselves just to reduce the inventory of below-market CRAC units.

Times have changed. Between retrofits and "greenfields" projects, there's another data center building boom underway. Lots of serious money is evaluating opportunities in the sector. All those data centers will need to be cooled, which means lots of business for Liebert and APC (American Power Conversion) and their competitors.