The UK energy market has been dominated for decades by a handful of fine, incumbent family names, but that hasn’t stopped a variety of challengers from entering the fray, alongside side the renewable-focused Octopus Vitality.
The firm claims to enjoy 1.5 million customers within the UK, a market portion of 5%, and in Could perchance also 2020 its market valuation hit £1bn, after agreeing to let Australian utility supplier Foundation Vitality license the technology underpinning Octopus’s operations as portion of a multi-year deal.
Billing itself as a tech-focused energy vendor, the total electricity the firm presents to its customers comes from renewable energy sources, but Octopus Vitality’s chief technology officer, James Eddison, is the principle to admit that once the firm launched in 2016, its founders didn’t “essentially know the energy market effectively” but could perchance well perchance hiss it modified into a sector ripe for disruption.
“The things that had been in actuality sure to us after we started off modified into that energy modified into a market whereby customers had been being underserved, and the market didn’t enjoy the technology and the systems to be ready to adapt on the payment that shall be valuable to style out climate replace,” he says.
“It’s our ogle that there shouldn’t be a commerce-off between serving customers and doing the just component. They wants to be the the same component.”
Being ready to steadiness these two notions is made imaginable at Octopus by the firm’s cloud-based totally technology platform, Kraken.
Hosted inner the Amazon Web Products and companies (AWS) cloud, the platform enables the firm’s customers to purchase proactive steps to motivate contend with their costs by providing them with personalized recommendation on how to curb their energy utilization.
Coaching neural networks
The platform also presents Octopus with visibility of the energy consumption charges across its commerce by coaching neural networks the use of orderly meter records that tracks how energy utilization charges vary per the time of day.
This in turn formulation the platform can make predictions about how utilization patterns tend to replace in some unspecified time in the future of the day, and motivate the firm establish essentially the most productive time to enjoy energy from the wholesale market to retain its customers’ energy costs down.
The latter belief kinds portion of the firm’s Agile Octopus energy tariff, which presents customers with half-hourly pricing updates so they know when essentially the most mark-efficient instances of day to ramp up their energy utilization.
The insights gleaned from Kraken make this imaginable, while providing a stage of dynamism, flexibility and chance to shoppers relating to how and when they bag their energy in a near that few, if any, incumbent suppliers can match, says Eddison.
“The energy industry is per applied sciences and processes that had been potentially designed within the 1980s and utilized within the 1990s, but it feels fancy it’s working on 1970s technology,” he says. “That’s why something as uncomplicated as switching your energy vendor takes just a few weeks.”
However it no doubt needn’t be that near, says Eddison. “When we had been very contemporary into the market, I be aware a time when the energy regulator Ofgem had been consulting on whether or now not we could perchance well also mute circulate to faster switching, and one of the most valuable incumbents had been asserting there could be rarely any evidence customers desire faster switching.
“We took the ogle that if there could be rarely any evidence that customers desire faster switching, why now not let us end it and we’ll look if customers fancy faster switching? Invent the assorted,” he says.
“We could perchance well also mute be ready to enjoy things where we are able to circulate, make adjustments faster and work together extra flexibly” James Eddison, Octopus Vitality
What the firm uncovered while digging into right here’s that switching energy suppliers is a process that would be utilized in a faster and a ways extra mark-efficient near if suppliers had been willing to make investments in their very enjoy technology stacks, says Eddison.
“The industry moves on the mosey of the slowest, so what we’re doing with Kraken is we’re asserting you shouldn’t enjoy to enjoy systems that are rigid, replace processes that purchase years and are incredibly dear,” he says. “We could perchance well also mute be ready to enjoy things where we are able to circulate, make adjustments faster and work together extra flexibly.”
Which is with out a doubt one of the most the the reason why the firm has taken to licensing the Kraken platform to varied utility suppliers, alongside side E.On and Honest Vitality within the UK, besides to just a few more than just a few in a out of the country nation suppliers.
“Kraken is great better than just a competitive advantage for us. It enables us to make adjustments to the near the market operates, so we are able to use records in proper-time communications to in actuality match consumption to energy era, and growth on tackling climate replace, while providing fairer pricing and extra transparency [on their usage patterns] to customers.”
Licensing tech for growth
In hiss to develop its portion of the market extra, the firm has launched into a chain of Kraken-focused licensing provides that seemingly aid to place its technology within the hands of its opponents.
Whereas that could perchance also seem fancy an queer component to whole, it is a circulate that it hopes will lead to extra consumer purchase-up of inexperienced energy tariffs across the industry, and – in turn – reduction society in its fight in opposition to climate replace.
“That wouldn’t work whenever you happen to’ve most productive got one participant available within the market with access to that style of technology, and whenever you happen to peek at who we’ve licensed it to within the UK, we’ve got Honest Vitality – who are a inexperienced energy pioneer, and E.On, which is basically the most productive with out a doubt one of the most giant six providing 100% renewable energy,” he says.
“It’s now not a query of licensing it to anyone with the finest pockets. It’s about licensing it to of us who we mediate enjoy the the same values and targets to then reduction from the use of Kraken.”
He says: “They ranking into precisely the the same mannequin, so they rep precisely the the same enhancements and traits on the the same time to the the same extent that occurs with [the version of Kraken] we enjoy.”
It’s thru these licensing agreements, coupled with notify engagement with customers by method of the Octopus brand, that the firm is hoping to make its objective of getting 100 million customers around the enviornment relying on Kraken by the end of 2030. “It’s a legitimate target, but there could be mute lots of labor to whole to bring on that,” says Eddison.
Cloud supplier partner
Hitting its customer acquisition objective shall be with out a doubt one of the most the the reason why the firm has sought to forge even nearer ties with its long-standing technology partner, AWS, in most standard months, evidenced by its declaration in August 2020 that Amazon has now change into its most neatly-liked cloud supplier partner.
Kraken has been hosted within the AWS cloud since its inception, and the platform itself relies on just a few inter-connecting Amazon cloud companies to scuttle, with its Easy Storage Provider (S3) broken-down to retailer customer records, which is then processed by AWS Glue to contend with it for diagnosis by the Amazon Relational Database (RDS) providing.
“In extinct college tech, that you just would possibly enjoy invested in hardware in a datacentre, and had it sitting there 24 hours a day, seven days every week, and you’ve got finite [compute] capability on hand to you,” he says.
“The AWS ingredients are very proper to work with… and being ready to flex computational energy to meet put a query to of is totally, in actuality valuable and we closely use that. And it formulation all we enjoy to misfortune about is designing the application, and serving customers.”
Moreover, given the firm’s are looking out to lengthen globally thru licensing agreements, being ready to lean on Amazon’s global instant of datacentres is one other valuable component in its resolution to deepen its ties with the firm.
“Now we enjoy 5 Krakens are dwelling in manufacturing, spanning three countries, and those numbers are rising. Every is totally paired because we scuttle a check atmosphere alongside a manufacturing atmosphere, and by the end of the year we’re going to enjoy 9 or 10 in use,” he says.
“We also don’t know which countries we’re going to be working in in just a few years time, and we don’t know what [data protection] principles are going to be in hiss inner those countries both. So having a supplier with a fine geographical footprint and presence puts us in a sturdy station from that point of view.”
Furthermore, given the time-sensitive nature of energy pricing, being ready to host Kraken as near the shoppers and suppliers that depend on it is on the total extremely valuable from a latency point of ogle.
And that’s namely valuable given the 50-sturdy team tasked with overseeing the near of Kraken are shatter up between London and Australia right now.
“I even enjoy previously managed a growth in Australia, with a technology team shatter up between Australia and the UK, by twist of destiny, and the latency distinction between working the application within the neighborhood and working it on something from around the enviornment is very, very noticeable,” says Eddison.
“In hiss so that you just can whole something which is very responsive and performant, you enjoy to circulate it nearer to your point of use. So Amazon’s global footprint is rarely any doubt a key component of the partnership.”
So with its scuttle to achieve 100 million customers by 2030 effectively and in actuality on, a rising priority for the firm is to proceed rising its developer headcount to be obvious that Kraken continues to bring on what it modified into designed to whole.
“There are some exceptionally proficient and devoted of us within the team, and we’re rising swiftly, and taking a gape of us who portion the the same passion for taking a peek after customers,” he says.
“Possess the team across technology and the consumer-going thru ops teams working together to purchase a peek at to make every varied’s lives more uncomplicated,” provides Eddison. “And that spirit of collaboration across the firm is totally precious to us, and a terribly precious driver in direction of guaranteeing [Kraken] is atmosphere friendly and uncomplicated to use.”
