Google, Nest, and the basket of remotes

Google jumped on board the smart home bandwagon in a big way this week when it announced it will spend $3.2 billion to acquire Nest Labs, which makes connected thermostats and smoke alarms. Google said Nest will continue to operate under its own brand under CEO Tony Fadell, but as I wrote Monday I think it’s only a matter of time before Google extends Android to its new connected home gadgets.

As the hefty price tag would indicate, there’s a lot to like about Nest: Roughly one-sixth of its workforce are former Apple employees, which helps explain why Nest’s gadgets are so well designed and easy to use – skills that Google sorely lacks as it grows its hardware business. And while Nest has yet to disclose hard sales figures, it has hinted it’s sold roughly one million smart thermostats, giving it a clear lead in a very promising market.

Lots of spokes in need of a hub

By sheer coincidence, just before I learned of the Nest acquisition I read a thoughtful piece from venture capitalist Jean-Louis Gassee about the “basket of remotes” problem that could slow the growth of the internet of things. Our homes (and offices, and cars) will see a wide variety of devices that are connected to the web via Wi-Fi or Bluetooth (or even directly to cell networks) in the coming years, Gassee writes, but they “don’t provide self-description or reliable two-way communication.” Consumers, then, are left with no easy way to manage and configure the networks and devices that will surround us every minute of every day.

Most of us are already trying to manage multiple networks and operating systems: My Android phone operates independently of my family’s four tablets, and those tablets are almost never connected to our laptops. Add to that mix kitchen appliances, energy controls, fire and security alarms, and a few smart TVs – very few of which talk to each other, and some of which don’t interoperate with any other device on any level — and it’s easy to imagine a scenario where we need at least a half-dozen controls to manage a dozen or more devices.

The smartphone as remote control

As the internet of things evolves, the smartphone is very likely to emerge as the conduit we use to monitor and control the ever-increasing number of devices we use every day. They’re almost constantly connected to the web through cellular networks or Wi-Fi, and they can also connect to other devices directly via Wi-Fi, Bluetooth or (in some cases) NFC. And while the steep price of mobile data continues to shackle usage of tablets over cell networks, most of us have long grown accustomed to consuming data on our smartphones whenever and wherever we like.

That’s why the Nest acquisition could be such a huge move for Google. It allows Google to pry open the door to the smart home, laying the foundation for a variety of Android-based home devices and services. Nest devices will surely continue to work with iPhones and iPads – for the near future, at least – but Google is buying a growing footprint through which it can distribute Android and cross-sell products and services. Consumers may not make big purchases like cars based on operating systems, but many will be inclined to buy whichever connected home products work best with their existing smartphones, and with each other. Positioning Android as the gold standard hub of the connected home will give Google a chance to expand the OS far beyond the mobile world.

Relevant Analyst
Colin Gibbs

Colin Gibbs

Mobile Curator Gigaom Network

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