Photo from: https://www.engie.com/en/journalists/press-releases/tiko-intelligent-energy-systems-residential-market/
It’s finally been announced today that Engie has taken control of tiko (see press release). But tiko already has established relationships with some of Engie’s competitors, so this begs the question: to what degree will Engie’s competitors continue to be happy to use the tiko platform?
Let’s start by looking at the smart phone sector.
It’s well known that Apple and Samsung are head-to-head competitors in the mobile phone market. Each has about one quarter of the market and they go head to head, racing to take market share from each other.
What’s less well known is that Samsung makes a reported $110 for every iPhone X that Apple sells. They supply various components to Apple, and some analysts think Samsung will earn $4 billion more from this business than selling their own mobiles. So, are they competitors or partners? The answer is both.
The ‘new energy’ industry is heading in the same direction.
We’ve seen this conflict before in ‘old energy’, such as the joint ownership of power plants between competitors, or retail competitors buying power from each other’s generating assets. But we’re now seeing this ‘partner or competitor’ dilemma become common further down the value chain.
Let’s look at the Engie – tiko deal. Tiko has B2C presence, but largely in the Swiss market, a small part of its overall opportunity. This B2C business has been valuable in giving them understanding, experience and capability in the whole value chain, from interface with the TSO through to engaging with customers and installing assets in homes. But their real opportunity is B2B2C in other markets.
For example, two of their key partners have been Sonnen (in Germany and beyond) and Direct Energie in France. Following recent acquisitions, the parent companies of tiko, Sonnen and Direct Energie are now Engie, Shell and Total: three companies that will be head-to-head competitors in ‘new energy’, as well as partners.
Engie already has worked with a direct competitor – it uses ENECO’s smart thermostat
For some time Eneco has been marketing their Quby platform and capability not only to their own customers, but to other utilities across Europe. What better credentials for promoting your products to partners than showing how you’ve made them a success with your own customers.
Now it’s one thing for Eneco to partner with a company such as Repsol in Spain – which is a long way from Eneco’s own markets and not competing for Eneco’s customers – but totally another thing to partner with Engie – which competes directly with Eneco in Belgium and the Netherlands. But that’s exactly what Engie and Eneco have done. Engie has used the Quby capability to develop Boxx, a smart thermostat for the Belgium market.
We’ll see the ‘partner or compete’ dilemma more and more as the transition from ‘old’ to ‘new’ energy gathers pace.
We come across it regularly in our discussions with our clients and our network. New capabilities will be sought after, such as those offered by tiko or Quby, an EV charging back-office system, a demand response platform, or a customer engagement platform. And companies who have developed a leading-edge capability will be thinking about monetising this beyond their own customer base. I expect that this will lead to a ‘new energy’ market where energy suppliers become increasingly international in their activities, with B2B2C business models developing alongside their (more local) B2C models. It also means the old ‘build or buy’ choice is no longer so simple. Companies will need to consider how they can both partner with companies in one part of the value chain and compete with them in another part.
The right approach may vary from market to market and company to company. Every situation will be different. But in some cases competitors will need to get as comfortable in partnering as Apple and Samsung do. Those that are open to this, keeping in mind what will be the best solution for their customers, are the ones most likely to succeed.