Storage: Finding the right partners

The global grid storage market will grow to $10.4 billion in 2017, says Lux Research. To address this market segment developers need to seek the right partners who can improve their capabilities and provide the all important access to new markets amidst strong competition. Lux Research adds that while technology developers seek out large corporations for support, the multinational conglomerates target startups for technology and IP.

Lux Research in its report analyzed 877 organizations and 949 strategic relationships that form the grid storage partnership. The analysts used the "Lux Innovation Grid" technology value and business execution scores to extract top partnership prospects for the suitors in the global grid storage network to highlight unique opportunities for strategic and prosperous long-term relationships.

"A strong network replete with complementary technologies, material supplies, and avenues to customers can speed up a company’s progress and buffer it against some unpredictable market dynamics," says Steve Minnihan, Lux Research Senior Analyst and a contributor to the report. “However, quantity is no indicator of quality in evaluating a developer’s partnership network, because not all partnerships are created equal,” he adds.

Findings

Lux Research’s report highlights that in the last 18 months since September 2011 every one of the six market-leading grid storage developers had faced at least one major technical or financial problem. Other lower ranking companies have sought acquisitions or have moved, to China for example. Lux Research says that developers have been turning to strong corporate partnerships to keep afloat and even though this does not promise success, it has prevented collapse.

The Americas is expected to lose ground by 2017, says Lux Research. The Americas accounts for 49% of the existing grid storage market at the moment, but this number will fall to 26% by 2017 representing $2.7 billion.

Europe on the other hand is set to grow. Even though Europe’s share of installed cumulative base of active grid storage projects, at a $34 million worth, accounts for only 3% of global installed capacity, this will grow by 2017. Europe’s demand potential is expected to reach $3.5 billion which represents 33% of global demand potential by 2017. Germany has already launched its support for PV storage.

Networks are also crucial for support for technology developers. Lux Research adds that out of the 877 companies looked at, 718 are connected in a mega-cluster while 169 remain on the perimeter alone or in strings of isolated relationships. A large majority, 725, are financial, education or government organizations that can help developers build their technological prowess and sales channels but have little to do with technology development themselves.