Why Kraken's success story is built on disruption

Gavin Patterson explains how and why Kraken has disrupted the energy sector by taking an ‘out-of-the-box’ approach to its software, partnerships and recruitment.

Kraken has been around for less than a decade and has already shaken up the energy market. Starting with Octopus Energy, the advanced operating system for utilities now serves over 54 million customer accounts around the world – including many energy accounts in the UK.

Gavin Patterson, Chair of Kraken, gives an insight into the company’s ethos, vision and ambitions.

Your background is in telecommunications and software. What excites you about the energy sector?

The mission itself. We’re at a critical point in the electrification of the network and the mission to address climate change. Being able to play a role in that is extremely exciting… probably the most exciting role, in many ways, that I’ve had in my career.

Octopus Energy Group founders Greg Jackson, Stuart Jackson and James Eddison anticipated the challenge ahead of us, almost a decade ago. They saw the need, saw the market wasn’t providing solutions, and they actively addressed it.

Their strategy is now coming to fruition. What is the relationship between Octopus Energy and Kraken? Octopus Energy has only been around for eight years and to achieve market leadership in electricity in the UK is an incredible accomplishment.

Starting a business from scratch, reaching market leadership, generating billions in revenue and, probably more importantly, changing consumer behaviour, educating and allowing people to make their contribution to the energy transition is extraordinary. And the key to this is Kraken.

Kraken is the energy technology platform that powers Octopus Energy, and it allows both the consumer and the company to manage that change, which is fundamentally different from traditional companies. Kraken is the secret sauce, if you like.

Which came first, Octopus Energy or Kraken? In this situation, it’s obvious that Kraken came first. The company founders realised that none of the incumbents in the software space had a platform that was fit for purpose and fit for the future. They developed the platform and offered it to the big providers, who didn’t take them up on it, nor did the utilities. This motivated them to create their own retail business and demonstrate to everybody what can be achieved. They’ve lived up to their original vision, enabling consumers globally to migrate to this new world, with Kraken active on five continents.

Have you read?
Octopus Energy boss Greg Jackson on ‘the magic of AI in the energy sector’
Kraken Technologies opens clean tech superhub in Manchester

What role do you see technology playing in the energy transition – particularly for the customer?

Kraken was conceived from a customer’s perspective. Greg comes from a fastmoving consumer goods background; that’s where I first met him at Procter & Gamble, 30-plus years ago. His vision for what the platform can achieve starts with how he can make the best experience for the end user. Everything else is worked back from that.

While it seems like a simple idea, nobody else has been thinking about software in the utility space with the same focus. First and foremost, all the customer data is held together in one system. It is a full stack offering a 360-degree view of everything about the customer’s relationship with energy and how they can change their behaviour to optimise their usage and costs. This enables smooth, seamless service and results in higher customer satisfaction.

What role do strategic partnerships play when supporting utilities, and how do you tackle localisation?

Kraken is designed to work ‘out of the box’, unlike other software that requires a system integrator. It is also designed with migration in mind, significantly reducing rollout time (less disruption to customers) while being a significant cost saving. However, implementing big softwarebased organisational change projects is not easy.

Relationships with the likes of Accenture, EY and other systems integrators are crucial because they act from an expert and objective standpoint when consulting with customers about the correct solution to invest in.

While they don’t do as much of the traditional implementation work – because it’s not required – they perform a lot of the organisational transformation work on how to restructure your organisation to get the most out of the technology, which is key.

While the software itself can be best in class, you still need to make changes within your organisation. This is where partnerships make a huge difference, supporting clients in making the organisational changes that are required to realise the full value of Kraken.

In the software industry, if you’ve got a SaaS business, as much as possible you want a single stack, and you want your customers to be on the same technology chassis that ensures you can continue to make upgrades, continue to make changes, and optimise for the market.

But in reality, there isn’t common regulation across the world. There’s not even common regulation within any one country, the US being a good example. You must be able to make changes, and I describe them more as configuration rather than customisation, to ensure that the utility can live up to its responsibilities and the regulations it operates under.

How is AI deployed at Kraken?

It’s built in, and the business cases are already being realised by our customers, including Octopus Energy but around the world too. We call it ‘Magic Ink’ because it takes out some of the basics that occupy the customer service agents’ time. A good example is email. Customer service teams can use Magic Ink to summarise all interactions with a customer, generate automated responses and suggest actions, such as requesting a meter reading.

AI makes suggestions for responses, resulting in far greater communication and better productivity. The customer service agents are now able to spend more time engaging with the customer rather than performing administrator checks. Kraken’s smart flex capabilities allow utilities to optimise energy usage on behalf of their customers.

Through distributed energy resources such as EV chargers and heat pumps, energy usage is aligned with times when energy is at its cheapest and greenest. This balances supply and demand across the grid and makes energy cheaper for everyone, helping to usher in the clean energy system of the future.

You might be interested in:
Webinar: Demand Flexibility and Machine Learning: Accelerating the decarbonisation of energy

What’s Kraken’s approach to recruiting and developing new talent?

Kraken was set up as a greenfield operation where you start fresh and build from the bottom up. Finding the right people with the right attitude, the right work ethic, and emotional and traditional intelligence is key.

Having children of my own who fall within Generation Z, I increasingly see this generation placing extreme importance on what an organisation does, who they serve, and what contribution they’re making to the public good.

These are all things that Kraken offers: you’re working on something that is probably the biggest challenge we face globally – access to clean and affordable power – and will be challenging for years to come. It’s one of the things that attracted me to work here and play a role. It keeps you energised. It keeps you relevant. It keeps you learning.

What keeps you awake at night?

Complacency around the mission of climate change. There’s a lot of good intention, and there’s no doubt that there’s been a lot of activity, and progress made. But the bigger part of the challenge is ahead of us still – and we’re not on track. While progress is good, it needs to accelerate from here if we are going to deliver against the goals that we’ve set, which are critical to ensuring that as many people as possible on the planet can live decent and fulfilling lives without being dramatically impacted by climate change.

In the UK, opening our Kraken Tech Centre superhub in Manchester is an example of how we are encouraging innovation and creating new avenues to accelerate solutions in tackling this overwhelming climate crisis while boosting the country’s green energy revolution. It is going to take us to the next level in terms of innovation and broadening our overall participation in the energy transition. I’m excited about it!

Kraken is participating in several exciting Summit and hub sessions at Enlit Europe in Milan, 22-24 October 2024.  You can join Kraken experts at booth 5.C10 to discuss your challenges and opportunities in detail and, most importantly, in person. Register for your FREE pass here.

* * *