At the beginning of this month, connected hardware developer Netatmo announced a partnership with EDF Energy to bring its smart thermostat into the EDF Energy HeatSmart Program. This announcement so far just applies to the UK marketplace, but could have a huge impact later on across the Channel on the continent, both in France and beyond, as EDF is both a French company and the largest energy producer in Europe.
Netatmo’s product, to be frank, is not unique in its concept. Nest and Qivivo both have their own versions. What Netatmo has created is a smart thermostat, which is meant to help increase energy savings by allowing consumers to monitor or control their homes from a mobile device or computer application. Netatmo offers a monthly Energy Report to allow direct insights into a household’s energy consumption, with personalized recommendations on how to save more the following month. In addition, there is an Auto-Adapt function to predict the start of heating periods in response to the outside environment, taking into account household insulation. It promises to always create the right temperature at the right time.
Does Intelligence Matter?
Rude Baguette’s Liam Boogar wrote an article in January stating that Netatmo had a sleek design but lacked intelligence. While this is true, I still think Netatmo will win the smart thermostat game in the end. Competitors like Qivivo, which recently raise 900,000€ from St. Gobain, Go Capital, and BPI France, as well as Nest, which just launched in partnership with Direct Energy in France, certainly have “more intelligent” products; however, I don’t think this will be much of a problem for Netatmo.
The differences in the products are, quite frankly, minimal. Qivivo boasts that it can learn your life habits, which I find a bit creepy. It claims that it would be able to adapt to you coming back early from work every other Friday for example. But, what happens if you aren’t coming home early on a regular basis? You’ve likely already developed a habit of going to manually adjust your heating. Netatmo is “less intelligent” because it requires a bit more manual attention; but, again, it’s as easy as a few seconds on a smartphone app.
The Power of Partners
And then there’s Netatmo’s new partner. In 2011, EDF produced 22% of the European Union’s electricity. It is massive in scale, and clearly dominates. While the new deal applies just to the UK for now, it will be interesting to watch what could develop later on in France. We know the competition between Netatmo and Nest will be fierce in France. Last September, Netatmo’s founder Fred Potter basically challenged Nest to bring it on when they launched in France. Smaller companies like Direct Energy, Nest’s partner, cannot compare in terms of its size of market base.
Beyond just France, I still think Netatmo will do better. While it has not announced partnerships with other energy producers in other countries just yet, I believe it will be better poised to succeed than Nest. Outside of France, Nest has partnered with Lampiris in Belgium, a rather small energy provider. Whereas the leading energy provider in the country supplies over 6 million households and businesses, Lampiris boasts a mere 780,000 customers. Not a small number, but not large enough to rival the top players. In the Netherlands, however, Nest did partner with Essent, the country’s largest energy provider.
But why did it stop in these three countries? Why did it not make its way to Germany too? As of September, Nest claimed that the product was not quite prepared to function with heating systems there. If this claim is true, and it does not have to do with German privacy laws, I question how ready it would be then for use in France, Belgium and the Netherlands.
Netatmo, being based out of France and pre-equipped for European energy, would already be prepared to launch. All it would need are the partners, and it’s proven it can get the big ones. Nest does have Google, but it is widely known that Google is not too popular in Europe right now, not to mention the fact that Nest is trying to hide this partnership.
So what can we take away from this? Going with the biggest usually means you’ll win. And this is exactly what Netatmo has done once, and will likely try to do again. Well played.
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