In May, a press release from Octopus Energy offshoot Kraken Technologies and Eon celebrated the milestone achievement of two million new Eon customers migrated to Kraken’s customer service platform in just under a year, following Eon’s acquisition of Npower in 2019.
But this milestone is just a way point on the journey: Octopus aims to use Kraken’s technology as an engine of growth, licensing the platform to energy retailers around the world with the aim to have 100 million customers on the technology platform by 2027.
Octopus aims to partner with like-minded companies seeking a “transformation migration” by sharing Kraken technology and the operating model it’s built around. In the five years since Octopus Energy was launched, it has leveraged Kraken to sign 17 million customers globally: 2.2 million are Octopus accounts in the UK, while 15 million are licencees following strategic partnerships in Europe (E.ON and Good Energy), Australia (Origin Energy and Hanwha) and Japan (Tokyo Gas).
So that’s just 83 million to go, but Kraken is confident that “entech” – and the operating savings it brings to energy companies – can be persuasive and profitable.
“Half of that growth will be through our own [Octopus Energy] brand and organic growth, and half through sharing our operating model,” explains Lara Beers, vice president for global sales at Kraken Technologies.
Kraken is an end-to-end platform integrating smart meter and consumption data, billing and payments, wholesale market data and marketing. It’s built to be efficient and intuitive for non-energy specialists in their homes or SMEs, and for the customer services teams in operations centres.
It integrates all customer interactions and communications into a single history, rather than relying on data making the trip from one discrete system to another. And because customer services staff in operations centres are empowered by having a full spectrum view of clients’ accounts, they can then take on the more proactive role of “energy specialists” in managing them.
Eon and other new customers are therefore buying more than just software. “The culture is the ‘special sauce’ of Kraken: if you licence it, you licence the package. It’s an operating model and a blueprint for a better business. We’re in the business now of transformation, that’s what we’re offering Eon, Good Energy, Tokyo Gas and Origin,” Beers says.
But as well as adding flavour to the customer experience, Kraken’s partners believe that the “sauce” makes sense financially. When Good Energy signed in March 2020, it said that it expected its investment of £4 million to achieve payback through operating cost savings within 18 months.
An energy platform for net zero life
Kraken is also built on the assumption that consumer-friendly tech will be an essential component of the net-zero transition. If today’s customers are going to become tomorrow’s “prosumers”, they need to be supported with intuitive software that can reduce the mental load of switching tariffs or scheduling EV charges or deploying home batteries.
In other words, their relationship with energy providers needs to be similar to the relationship they have with Apple or Google: accessible through multiple synched devices, reliable responsiveness, and using machine learning to predict patterns and needs. While Kraken will support the rollout of “smart grid” products and services in the future, it already has the intuitive user interface. “Anyone can log in, and they don’t even need to have training because it’s as easy to use as an iPhone,” says Beers.
Not migration, but transformation
As an end-to-end cloud-based customer engagement and billing system, Kraken interfaces with consumers in their homes via the web, mobile and smart-meters, and also with Kraken staff, who have access to additional information such as consumption forecasting, and trading information from the wholesale markets.
Kraken also contrasts with the industry-standard approach of bolting together off-the-shelf packages, such as a Customer Information System (CIS) for customer data with a Customer Relationship Management (CRM) platforms for marketing – which tend to come with all the attendant difficulties of integration and poorly synched updates. And rather than being an “off the shelf” purchase, the system can be differentiated and modified to suit clients’ business models, and is designed to be scalable and flexible.
During the Npower migration, no fewer than six existing platforms were integrated into Kraken. The practical difference that makes would be apparent to anyone who has racked up call time chasing a query across different teams at their energy or broadband provider. “You call in multiple times on a single issue getting bounced around different siloed departments, which comes with re-explaining yourself at every level. It’s very frustrating and it’s the rule rather than the exception,” says Beers.
On Kraken, customers are assigned to “teams” of 8 or 10 energy specialists, so that there’s a good chance that a call or inquiry will be picked up by someone who already knows the customer. “Our energy specialists are the centre of our company. We’ve built our business around our customer, but what that means is actually building it around the people that service our customers.”
Certainly, Eon chief executive Michael Lewis is impressed. At the time the deal was announced, in March 2020, the company talked of becoming a “market leader” on costs thanks to Kraken, and it now plans to transfer the rest of its UK customer base onto the platform, extending the new Eon Next brand.
“It’s a huge achievement, not just to complete the migration in such a short time but also to achieve such a positive response from customers – because customers are what this move is all about.
“The next step is moving all Eon energy customers – millions of homes and hundreds of thousands of small businesses around the country – to Eon Next. This step is vital in building more effective and responsive relationships with our customers, because it is in their homes and businesses that changes are needed in order to combat the climate crisis; that means creating warmer, healthier, more comfortable homes and more efficient and cost-effective businesses.”
Removing friction, saving costs
Octopus Energy Group was set up in 2015 by co-founders Greg Jackson (chief executive), James Eddison (chief technology officer) and Stuart Jackson (chief financial officer) with backing from asset management group Octopus Capital. None of the founders previously worked in energy; Eddison and Jackson in fact shared a background in software and digital tech, shaping Kraken with insights gained from platforms for the Labour Party, a drinks brand and e-commerce sites – the common factor being a focus on removing barriers and friction between customers and service providers.
Kraken was also built with customer migration and business change in mind and to enable partner companies to take advantage of its technologies; Octopus sees this as a route to earnings growth alongside selling green energy and empowering people to share, generate and store it.
Jackson highlighted this in the Eon press release when he said: “We developed Kraken alongside our operations team to make it easier and cheaper for energy companies to offer green energy while maintaining outstanding customer service levels – and Eon Next is already reaping the benefits of this technology. If more energy companies took the same approach as Eon, we’d see tremendous improvements for both the people and the planet.”
Beers herself has a background in “environmental tech”, gained while working for US company Opower, a software as a service provider for utilities. Its acquisition by Oracle brought Beers to the UK, where she was exposed to Octopus and its ambition to build its own technology platform. “I stalked Octopus Energy!” says Beers, describing how she attended events, subscribed to podcasts and was generally being drawn to the infectious atmosphere of a disruptive startup.
The company’s focus on tech means that its developers and coders now roll out incremental upgrades on a continuous basis, Beers explains. “With Software as a Service, you might get three to four upgrades a year. At Kraken, we operate continuous deployment, it’s upgraded 80 to 100 times a day.” She also argues that this puts Kraken in a good position as the energy sector “flexes” to meet net zero, adding more supply and demand-side connections. “We’re able to really meet that future energy transition in a more powerful way than systems that were built for fossil fuels.”
In November 2020, Octopus Energy acquired a software company called Upside Energy, a specialist in systems for energy and device management. That acquisition forms the basis of a new brand, Kraken Flex, which gives asset owners, energy traders and retailers control of devices such as smart batteries.
Octopus has been named best energy provider in numerous rankings, including those run by Which?, TechRadar, and Uswitch. It and “entech” rivals such as Ovo do enjoy some in-built advantages – including energy consumers’ low expectations set by decades of decidedly mixed customer service, and the more recent tribulations of the smart meter roll out.
But, in a world where our daily tasks are increasingly being outsourced to the tech and apps in our lives, and consumers are starting to benefit from the increase in productivity, Kraken embodies the growing realisation that technology and data will be a key factor propelling us to net zero.