Gentrack's Docking sees Facebook-style channel for smart homes

Gavin Evans Wednesday 28 July 2010

Gentrack's James Docking has a vision of the smart-home. In 10 years, households may monitor and control their power use appliance by appliance on a Facebook page, or something like it. A customer might turn off the hot water from his office, or, feeling the drop in the temperature, she might turn on the heating before the kids are due home.

But rather than communicate through a power company's smart meter, that exchange will more likely be across the internet, before ultimately linking back into their power retailer's customer relationship manager. That may unsettle power engineers trying to design wireless or radio links to offer their customers smart products.

Docking, a one-time ECNZ engineer, says utilities will still need those channels to deliver their products and meter their use. But the control of the smart house will most likely be through an internet product given the "billions'' Google, Microsoft and others are throwing into the web and the sheer volume of data smart technology will require.

"The energy industry is run by engineers and they would like to see it all controlled," Docking says. "But I think they will get overwhelmed.

"The volume of information to do this sort of stuff is much better done on fibre.

"The network companies in New Zealand, in particular if they get into the government-led fibre rollout, could be part of the mix, but I do think it is more likely that the end-product is going to be on something like Facebook, which everybody knows how to use."

Exciting prospect

It's an exciting prospect for the 26-year veteran of the power and IT industries. His company's software runs the billing, reconciliation and customer management systems of all the nation's major power retailers and most of the network companies.

Gentrack is now supplying customers in the UK, Asia and Australia and has added water utilities and airports to its suite of clients. Airports already account for about 10 per cent of the group's revenue. The balance is split 80-20 between power and water.

The Auckland-based firm, privately owned by New Zealand and Australian investors , now has more than 130 staff, some of whom operate out of Melbourne, London and Manchester.

Business is good and the company expects to hire another 20 technologists this year, says Docking. As well as deregulation and smart metering in the energy sector, the airports division is busy replacing old systems while water reforms in the UK and Australia are also fueling demand for Gentrack products. Interest from other regions means the company is having to work hard to restrict itself to its target geographies.

"You've got to keep your focus right," he says. "Right now we've got enough business in our key markets to grow with."

Big break

Gentrack got its big break in New Zealand during the power reforms of the early 1990s. The pace of the reforms forced the company to develop automated routines for converting existing systems.

"Over a period of two years we converted more than 40 New Zealand energy companies into the four big retailer platforms. Historically, companies have struggled to convert one system in one to two years."

Establishing the business in Melbourne, home to Australia's most competitive power and water markets, has also been an advantage, he says.

The company is now in the fourth generation of the Gentrack software and has expanded beyond the core billing system into customer management, reconciliation and advanced metering systems.

Working with customer groups, Gentrack has been able to keep developing the product in anticipation of clients' needs.

"What we try and specialise in is understanding the industry needs in advance and building products for that change."

Australian, UK experience

That local experience is being applied in products overseas. Experience in Australia with progressive customers such as Red Energy is now being applied here. In rural Western Australia, Horizon Power is using Gentrack for its smart meter rollout, remote management of the meters and the field service staff who have to maintain them over wide geographies
"The growth of the product in that space will be very useful to us. That's an excellent project for us."

Also handy, is seeing how competitive retailing can really be. In the UK, households can change supplier on web portals that identify the best-priced local offering. OVO Energy, a Gentrack client, has amassed about 60,000 customers in a year by targeting high-end consumers.

"There is a lot of opportunity for that and it really isn't used well in New Zealand," Docking says.

"My house happens to be a high energy user - teenage kids - and we're all electricity. But the energy companies don't target me very well to try and attract me to switch in New Zealand. In the UK I would be picked up and enticed to another company.''

That looks set to change as companies here start rolling out new technologies.

Smart metering

Mass smart metering "will happen'' and New Zealand is already taking a leadership position, Docking says. Its final shape is hard to gauge yet.

"There's a lot of crusty old engineers out there in the industry that don't believe it will, but in 10 years they'll be looking back and saying 'where were we?'

"There will be a lot of wrong exits taken and a lot of money spent on dead-end paths, but that's the nature of new technologies."

Despite Gentrack's success, some local clients are challenging. Contact Energy's change of IT supplier to India-based Wipro is expected to involve a shift to an SAP system. TrustPower, after writing $6.2 million off a rival customer information system, is still reviewing its choice of system. Meridian Energy last week re-signed with Gentrack after investigating a shift to Oracle technology.

Docking won't comment on clients. But he observes that some companies reach a size where they feel key contract suppliers must be of global scale. Takeovers by multinationals sometimes also lead to the replacement of local IT suppliers.

And it's not always a happy change.

Overseas failures

In 2002, Sydney Water cancelled a new AUD $61 million customer information and billing system. The cost of the project, by then one year late, had risen from AUD $38.2 million to AUD $135.1 million.

In 2008, British Gas owner Centrica sued Accenture for £182 million over the failure of a new system integrating electricity and gas billing.

Docking says Gentrack couldn't afford that scale of failure and works hard to make sure it "never drops the ball". That companies still get caught by such over-spending surprises and frustrates him.

"We couldn't waste that amount of money. We wouldn't need enough people on those projects to spend that amount of money."

Docking thinks the pendulum is swinging away from the global firms and back in favour of local operators. That is good for Gentrack, but it still rankles that not enough of New Zealand's major corporates support local IT suppliers.

"IT is something New Zealand does well and it's something the government should really embrace. And I'm not talking about supporting us. We're big enough to look after ourselves

"But it's at that school and university level. Get the right education for people. Get school kids excited about IT. Get them into the university degrees. Get good quality coming out of the universities. Keep them in New Zealand. That's the biggest challenge we have.

"The New Zealand big companies often don't support local IT companies so the local IT companies can't employ enough students to keep that knowledge base in New Zealand.

"There is so much more that companies like us can do to make the New Zealand energy sector work better."