Google's reach expands into your home more via $3.2 billion Nest acquisition

Google's reach expands into your home more via $3.2 billion Nest acquisition

Summary: Nest gives Google some design know-how as well as a lot of home energy data. Google's tentacles are spreading into your home even more.

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Google said Monday that it will pay $3.2 billion in cash for Nest, which makes smart thermostats and smoke alarms. Rest assured that Google is hoping to plug smart homes together with Android devices, its developer ecosystem and treasure trove of data.

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Nest launched in 2011 to strong reviews. Since its launch, Nest's smart thermostat has been replicated by larger players such as Honeywell.

Google CEO Larry Page said that Google is "excited to bring great experiences to more homes in more countries."

For Google, Nest founders Tony Fadell and Matt Rogers will bring some more design knowhow to the search giant, which has a hardware side of the business via Motorola. Fadell led the team at Apple that created the first 18 generations of the iPod and the first three generations of the iPhone. 

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On the data front, Google could ultimately harness more information about individual homes and their energy usage. Nest, however, did indicate that home data would stay in its company under its privacy policy, which is owned by Google now, and only be used to improve products. Nest was poised to launch a developer program in early 2014. 

Consider the moving parts:

  1. Google has mobile access via your smartphones and various apps on multiple platforms.
  2. Google has multiple ways into your living room via Android and Chromecast, a streaming TV gadget, as well as tablets and PCs.
  3. The company had tried to monitor energy usage with utilities, but scrapped the plan in 2011.
  4. Google's Android will increasingly be in your car.
  5. And Google is working the robot market.

It remains to be seen how all of these efforts fit together, but it's clear that Google's tentacles are spreading.

Analysts said that Google's purchase highlights the importance of the connected home and Internet of things. Forrester Research analyst Frank Gillett said:

Google's acquisition of Nest affirms the growing strategic importance of the idea of the connected home. It also shows that Google increasingly believes in hardware/software solutions, such as Nest has built, rather than just building operating systems for other manufacturers to implement in smartphones, Chromebooks, and TVs.

In a blog post, Fadell said:

Google will help us fully realize our vision of the conscious home and allow us to change the world faster than we ever could if we continued to go it alone. We’ve had great momentum, but this is a rocket ship.

Google has the business resources, global scale and platform reach to accelerate Nest growth across hardware, software and services for the home globally. And our company visions are well aligned – we both believe in letting technology do the hard work behind the scenes so people can get on with the things that matter in life. Google is committed to helping Nest make a difference and together, we can help save more energy and keep people safe in their homes.

Google and Nest are familiar as Google Ventures has been an investor in Nest. Fadell added that Nest will continue to have its "distinct brand identity."

Rogers posted an FAQ for nest customers and hammered home the distinct brand theme. Here's the excerpt:

Will Nest continue to support iOS so I can have the Nest app on my iPhone or iPad? Yes, absolutely. We’ll continue supporting iOS, Android and modern web browsers so you can check in on your home and control the temperature from wherever you are.
Will Nest and Google products work with each other? Nest’s product line obviously caught the attention of Google and I’m betting that there’s a lot of cool stuff we could do together, but nothing to share today.

What will happen to the Nest warranties on products? No change there – we stand behind our products like we always have.

Will I still be able to find Nest products at my local retailer? You bet. We intend to continue selling through the same partners in the US, Canada and the UK.

Will Nest customer data be shared with Google?
Our privacy policy clearly limits the use of customer information to providing and improving Nest’s products and services. We’ve always taken privacy seriously and this will not change.

Topics: Cloud, Emerging Tech, Google

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56 comments
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  • google wants to control your life

    this is great news: google will now be able to reach in and control your heating and air conditioning because they think its their duty to force you to *save energy* no matter how cold or hot you may get.
    DontUseGoogleAtAll
    • Re: Google wants to control your life....

      I really feel bad for everyone that has to buy oil to heat their homes; and am so happy that I married a farm girl who gets outside and helps me cut wood off our own property to heat our home. We haven't had to burn oil, since 2009, when we had to rebuild.

      Our old home (house had been built in the 1790's) had burned down after a power surge from an ice storm in 2008.

      As far as the Google angle, you don't have to buy the Nest brand, there are always other brands to use...

      TW
      T-Wrench
    • Personally, I really don't see the need for a Nest thermostat

      I have a non internet connected, fully programmable thermostat. Once setup, it's a fire and forget kind of thing.

      For me I have no need to jump on the internet or run an app to adjust it for me, or to check the temperature, it just follows the programing I loaded at the start.
      William.Farrel
      • ...

        Can you turn off your thermostat from a remote location when you leave and forget to turn it off? Probably not. Does your thermostat learn when you are gone and not and adjust even if your work schedule changes? Probably not. To you end up using more electricity at the end of the month because it doesn't? Yes.
        Asilus
    • google is the government's b!tch

      or is it the other way around?
      schm0e
    • That's more like Apple's way

      Google just wants to bring you mostly baked products that mostly work for engineers. I just can't wait to play Angry Birds on my thermostat.
      A Gray
  • Google and IeT

    Nice going for Tony Fadall. Made a couple of cool billions! The Internet of Things (IeT) is getting very serious. The basic technology is now is place and with the added Google backing - IeT is going to be ramped up. This is a big down payment by a top player. Cisco and others have to catch up. For those who want a good read on IeT, including NEST, check: http://tinyurl.com/lp5egb4
    mikesangha
    • I still don't know

      why I would want an IeT. I don't see what the Nest does for me, or why I would want to have my toaster, fridge, TV etc. connected to the Internet.
      wright_is
    • You don't have to want it.

      Government wants you to have it.
      Brent Bach
  • National Disappointment.

    F'ing Google....We The People can thank F'ing GOOGLE for the eventual removal of OUR Civil Liberties with their F'ing technology which I would personally be happy to do without. It doesn't matter WHO is in office. That party get's to make their own rules while GOOGLE stacks the F'ing deck for them. It just happens to be Obama the Socialist Donkey who has total control of not only his mindless flock of sheep but of those who use googel on a regular basis. We The People CANNOT TRUST ANYONE and I'm looking forward to the day We The People overthrow this rogue socialist goverment. Bring on the stock market crash and the ensuing REVOLUTION!!
    FUandObama
    • You think this purchase is disturbing?

      What I find disturbing is the most insane, reckless, ignorant posts get the most votes.
      none none
      • You think this purchase is disturbing?

        SOON to arrive at a ceiling near you.
        JTONLY
      • Look Again!

        The only reason it is disturbing is because YOU have not realized the gravity of Americas future as the commentators who seem like nuts have. The stuff that is going on now makes Orwell's 1984 look like a visit to Disneyland in the 1960's. We are caught a death spiral and it appears there is no sane way out.
        Nat George
      • The only ignorant posts I see around here, are yours,

        and you still get a bunch of votes. Go figure.
        adornoe
    • You might want to

      rip out that smart electric meter and go off grid before that revolution, just to keep Obama from controling your electric use.
      WhoRUKiddin
  • Yes Nest, Yes Google

    I understand that Nest is riding a rocket ship -- less than three years into "hey let's do a company" and they have invented a market. A lot of yahoos including me tried to get feelthy rich in home automation -- all flopped.

    The nest folks basically said "I'll bet folks will pay three times as much for a smart thermostat that looks sexy". Meanwhile the folks who had grown up with pneumatic valves at Honeywell had long given the company to the accountants and "marketers" who did the same old, same old every day. Nest was right and whole new segment was born. The smoke detector was the next thing in the mega-high volumes in the home, but what comes next will bring in so many dollars so quickly that Google is going to look like geniuses for spending only $3,200,000,000.

    Google has proven adept at not crushing barely sane companies they buy and let them keep the nutty, but profitable, market share stuff keep coming.

    But I need the next logical steps for Nest -- C'Mon, i'm waiting, credit card in hand.
    TomMariner
    • Heat Pumps with set backs

      Betting on American stupidity has always been a safe bet.

      If your home is heated with a heat pump do not use a set back thermostat (either "smart" or "dumb.") Your electric bill will go up, not down with each set back

      The efficiency of heatpumps decline, the greater the difference between ambient and called for air temperature.

      Because this is so, heat pumps normally are equipped with resistive heating elements to help make up for the larger differences. This is equivalent to heating your house with lots of toasters - $$$$$$
      SirGareth
  • No Thanks.

    Now that Google is involved, I'll never buy a Nest product.
    Jeff Richardson
  • Nest is a great company.

    The question is whether Google will ruin a great company who makes great products. I'm suddenly having visions of ads appearing on my thermostats every time I walk past them. This purchase certainly makes me a little apprehensive. I can understand the strong appeal of a $3.2 billion check, though.
    BillDem