Nest's acquisition of Dropcam all about building a smart home stack

Nest's acquisition of Dropcam all about building a smart home stack

Summary: Google, which owns Nest, wants to play a big role in the automated home. Dropcam fills in a missing element in the smart home stack.

TOPICS: Cloud, Google

Nest's $555 million acquisition of Dropcam, a cloud-based home monitoring service, is about building a smart home stack as competition from established rivals looms.

CNET's Smart Home coverage

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

Google, which owns Nest, wants to play a big role in the automated home. There's a lot of data to mine and perhaps enough people opt-in to Google's plans to even surface advertising. Dropcam will operate under Nest's privacy policy, which doesn't allow data to be passed to its parent Google without a customer's permission. Nest reiterated that the company is about hardware not ads.

In a blog post, Matt Rogers, founder of Nest and head of engineering, said that customers were asking for Nest and Dropcam to be better integrated. Acquiring Dropcam was a quick way to integrate products.

Rogers said:

Eventually, the plan is for us to work together to reinvent products that will help shape the future of the conscious home and bring our shared vision to more and more people around the world. For now though, not much will change. Dropcam products will still be sold online and in stores. And Dropcam customers will still continue to use their Dropcam accounts.

Left unsaid is that Nest needs ways to tie technologies together to automate, monitor and manage homes from many points. Thermostats and smoke alarms only go so far. Dropcam will fill a void. Google's role is ultimately to better connect those home tech tools to its devices, cloud and potentially robots---with customer permission of course.

Add it up and the company that controls the home stack wins. There's a reason that Apple is playing ball, appliance companies are all in the act and companies like Samsung and Panasonic are pitching smart home gear as consumers bridge their lives with work.

What's interesting to watch is not how the technology companies are duking it out as much as how the current home players retool. Consider Honeywell's smart thermostat, which may not be as intuitive as Nest, but is certainly a contender, according to CNET. Isn't there a scenario where your heating system and central air conditioning unit comes with a home automation and monitoring kit? Honeywell already has a home stack that just comes from a different direction?

Meanwhile, telecom players like Verizon, AT&T and Comcast already have an entry point to the home via broadband access. It's no surprise that home monitoring and security services have quickly followed from those giants.

Ultimately, what company wins the smart home stack may be the one that garners the most trust. Nest is filling in a few blanks with Dropcam. Nest---and its well-heeled advertising giant parent---will likely go shopping again.

Topics: Cloud, Google

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  • Still a solution looking for a problem...

    Despite all the players trying to figure out the "smart home stack", it is going to remain a solution looking for a problem until the cost benefit ratio improves. (In my case, a home with 3 programmable thermostats and 5 smoke alarms with a total cost of $325. Upgrading to Nest hardware would cost $1250.) I have played with wifi tv controls, web cams, and Arduino projects related to home control for less money but more geek content. Still have my original thermostats and smoke detectors.

    Having one or two standard communication protocols come to dominate the landscape would help. I don't see that happening anytime soon, though. The makers of devices that would interconnect in a smart home all want their own protocol/connectivity to be their selling point. So it will be a long time before your Frigidaire refrigerator, Whirlpool range, Samsung TV, Sony Blu-ray player, and AO Smith hot water heater all interact on a common interface.

    The future could belong to the companies that figure out the interface separately from the manufacturer of the device. SmartThings is headed in the right direction. My concern is that any outfit like them that achieves a major market presence will get bought out by a larger player as a protective strategy.
    • Close

      There are companies that are working on standards. I don't recall the names, but one has a large display in Lowe's. X10, which has been around for a long time - using RF technologies before wifi and broadband was big, is trying to compete. The main problem is still price. Like printing mentioned, it's hard to swallow the cost of the complete home automation. Just the thermostat would probably take about 5 years to pay back. The geek factor is great and there are some really useful scenarios. (I have a small 2nd home we visit on the weekends occasionally. Controlling the thermostat online is the best solution - of course, we can't get a decent internet service there - but that need isn't very common.)

      I also use an Elk security system which has modular add-ins to control lighting, thermostats, just about anything with a relay control, online/mobile - which has great potential, but just really isn't worth the cost.

      Having lights, alarm, and thermostat all respond to your arrival is nice, but still just a gimmick. My wife likes it when it's all plugged in and working flawlessly, but will cringe if I discuss buying/installing a system. It needs to be simple to install, attractive, easy to use, and inexpensive. We're close and it will happen one day, but we're not there yet. Nest/Google has a good opportunity - except for the fear of Google invading your home.
      • More like infinite

        The thermostat would take infinite number of years to pay back as there really isn't any advantages to it, and it may do worse as the engineers didn't test and tweak it for the specific HVAC system. Playing catchup is often less efficient than maintenance for modern systems.
        Buster Friendly
  • My experience

    My experience with home automation gadgets is they're a neat novelty but ultimately useless. Light timers and dusk/dawn switches are about the only useful ones, and they're old technology and inexpensive.
    Buster Friendly