Strategic CIO // Executive Insights & Innovation
Commentary
1/14/2014
12:33 PM
Chris Murphy
Chris Murphy
Commentary
Connect Directly
Google+
LinkedIn
Twitter
RSS
E-Mail
50%
50%
Repost This

Why Does Nest Need Google? Analytics

Before we have a truly smart home (or car), we need data analysis that we trust with our lives.

Google just provided 3.2 billion reasons for companies to start taking the Internet of Things seriously. But Google's blockbuster deal to acquire Nest also offers a warning that the next generation of smart, connected devices must get a whole lot smarter, and that it'll take a big investment in people and tech to get there.

Google will pay $3.2 billion for Nest, the startup maker of two everyday products -- a thermostat and a smoke detector. Nest made these humdrum products more interesting by connecting them to the Internet, analyzing data from the devices to make them more effective, and offering a mobile app interface. It's a wake-up call for execs at any product company who aren't exploring  Internet of Things opportunities.

That price tag is huge validation for the Internet of Things concept, but looking at Nest's product lineup says as much to me about what's not yet possible. And it explains why a deal with Google -- even more than Apple -- makes so much sense.

[Google isn't the only big company betting on connected devices. See CES 2014: Cisco's Internet of Everything Vision.]

One word comes up often when we start spinning Internet of Things fantasies: "automatically." We will have devices collecting data and then "automatically" making decisions and adjustments. I haven't used Nest's thermostat, but the multiple reviews I've read suggest it does what it promises. It learns how you use the thermostat and when you come and go, and automatically adjusts the temperature to cut your power bill.

But the furnace is a relatively low-stakes game when it comes to automated decisions. If my smart thermostat is wrong, and it's too cold for my tastes, I can turn it up. As long as it's not completely turn-off-the-heat-when-I'm-on-vacation-and-let-my-pipes-freeze wrong, it isn't a disaster.

Nest's smoke detectors operate in a much higher stakes realm, and they don't offer automated decision making, such as deciding whether to call the fire department when the alarm goes off. If a smoke detector is wrong and calls the fire department every time my frozen pizza drips cheese on the oven floor, we have a problem.

Google, however, is exploring these kinds of life-and-death, automated decisions with its self-driving vehicle research. If my car is wrong and slows down to 15 miles an hour on the highway, mistakenly thinking I'm about to hit a car, I (and that semi on my ass) have a very big problem.

Automated response is the Shangri-La of the Internet of Things, that place where everything truly just works. But do we trust these devices to do what they should? Google has the cash, talent, and drive to try to develop the data analytics and algorithms needed to power this kind of high stakes, automated decision making.

Chris Murphy is editor of InformationWeek magazine and Global CIO columnist on IT strategy issues. He has been covering technology leadership and strategy issues for InformationWeek since 1999.

Come to the InformationWeek Conference to hear GE Power CIO Jim Fowler discuss the company's Internet of Things strategy, and to discuss other digital business issues with your peers. This executive-level event is March 31 and April 1 in Las Vegas.

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
mrtylerlevinsky
50%
50%
mrtylerlevinsky,
User Rank: Apprentice
1/18/2014 | 4:38:35 PM
iot
internet of thigns is still ten year out. adoption will be slow, costly to endusers. hence the likelyness it will succeeed is limited.

 

Over engineered products never make it that far since the usefullness determines market.
pzivovic606
50%
50%
pzivovic606,
User Rank: Strategist
1/16/2014 | 6:47:52 PM
Re: Another Google monopoly?
I would add to that with a concise tweet I recently saw someone post re: Nest's smoke detectors and their ability to differentiate what kinds of "smoke" hit the sensors - all while uploading data to the internet:

"But I don't want Google to know when I'm taking a shower!"

'Nuff said.
cbabcock
50%
50%
cbabcock,
User Rank: Author
1/15/2014 | 9:07:46 PM
Analyze this
I suspect Nest wasn't worth the $3.2 billion, based on what we can do today with thermostats and smoke detectors, nor is it clear when it might be worth Google's investment. On the other hand, we have not had a chance to think through what we might do if we were able to manage a set of household appliances and systems as a holistic system. In at least some cases, the intelligence one system might have about another would be useful. Maybe baking bread and washing clothes in the middle of the night, as family sleeps, would result in both cost and energy savings. Or when we all have solar roofs, it would be good to have household work to do for the power generated.
D. Henschen
50%
50%
D. Henschen,
User Rank: Author
1/15/2014 | 10:24:58 AM
It's Just a Thermostat
I was at Lowe's recently and saw Honeywell's alternative to Nest. We're talking about Honeywell, maker of ubiquitous round thermostat that the Nest device is designed to mimic. The thing is, Honeywell's rectangular alternative to Nest costs about half as much, and it may improve on the smarts with programmability as well as smart sensing. If you read the reviews of Nest, you'll see that many people are frustrated by situations where Nest kind of outsmarts itself. Look at the 290+ 1-start reviews on Amazon and you'll get the idea.

Despite all the pie-in-the-Internet-of-Things Hoopla, people buy Nest to serve as a thermostat. Honeywell and others that are way down deep in the HVAC business are going to undercut it on price, beat it on distribution and quite possibly put their years of HVAC expertise to work to beat it on functionality. Smoke detectors? Same deal. Nest will be to Google what the Flip Minnow was to Cisco.
Ariella
50%
50%
Ariella,
User Rank: Ninja
1/15/2014 | 8:50:47 AM
Re: Needed or Not, that is the question.
@Thomas perhaps it has greater value for people who are away from home more. I can see going away during the winter and then worrying that the heat isn't set high enough to prevent pipes from freezing or that it's set higher than need be with no one in the house. 
Kristin Burnham
50%
50%
Kristin Burnham,
User Rank: Author
1/14/2014 | 8:18:48 PM
Re: Another Google monopoly?
...it may get to know your next move even before you do yourself!  


Now that's a scary thought!
Thomas Claburn
100%
0%
Thomas Claburn,
User Rank: Author
1/14/2014 | 8:08:47 PM
Re: Needed or Not, that is the question.
A lot of home automation pipe dreams can be dismissed with the phrase, "More trouble than it's worth." I have a Nest. Installed it myself. It's nicer than my old thermostat but frankly its value is aesthetic. The energy reports are meaningless because I don't have air conditioning and when the heat is on, it's needed. Having data about that doesn't matter to me. And being able to turn Nest on or off remotely is not all that useful.
Ariella
100%
0%
Ariella,
User Rank: Ninja
1/14/2014 | 3:11:44 PM
Re: Another Google monopoly?
@Shane I was thinking the same thing. If you use Google Maps apps for your car, it already knows a lot about your driving habits. And now it can learn a lot about your home, with indicators of when you are in and when you leave. Combine that with what it knows of your search history, choice of videos,  and what it knows about your email messages (if you use Gmail) and it may get to know your next move even before you do yourself!  
Shane M. O'Neill
50%
50%
Shane M. O'Neill,
User Rank: Author
1/14/2014 | 2:20:19 PM
Another Google monopoly?
I agree that Google has the data analytics expertise, ambition and money to take charge of the home smart device movement. But with the company's history of brazen disregard for privacy rights, I just hope they're not on a march to monopoly. I get a little uneasy about Google having even more access to even more of my personal data. Then again, I use Gmail, YouTube, Google+, Google Maps, an Android phone, and an Android tablet all day, every day. So it may be too late for me! But other players need to jump in fast because Google is giddy to be the neighborhood bully in the Internet of Things space.
Kay987
IW Pick
100%
0%
Kay987,
User Rank: Apprentice
1/14/2014 | 1:37:18 PM
Needed or Not, that is the question.
Since the Jetsons cartoon, I have wanted an automated home and car. There are many positives about it. But the Jetsons never dealt with the most obvious problems we have of outsiders breaking into our private domain and doing things with our "account". Today that's a big issue, as is total Identity Theft. So what's wrong with turning off a switch ourselves, or having individual items we can reset as we leave and return. That requires better products that, for instance, heat faster in winter, cool faster in summer. Many times I have forgotten to remove meat from the freezer and then had to think about what alternatives I had for dinner that night. I survived it without problems. These are not major changes we need. Making the Internet safe to use for "things" and making better quality "things" is where we need to focus our efforts. And we also need to make better use of natural resources for production of power for all these "things" we take for granted.
InformationWeek Elite 100
InformationWeek Elite 100
Our data shows these innovators using digital technology in two key areas: providing better products and cutting costs. Almost half of them expect to introduce a new IT-led product this year, and 46% are using technology to make business processes more efficient.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Government, May 2014
NIST's cyber-security framework gives critical-infrastructure operators a new tool to assess readiness. But will operators put this voluntary framework to work?
Video
Slideshows
Twitter Feed
Audio Interviews
Archived Audio Interviews
GE is a leader in combining connected devices and advanced analytics in pursuit of practical goals like less downtime, lower operating costs, and higher throughput. At GIO Power & Water, CIO Jim Fowler is part of the team exploring how to apply these techniques to some of the world's essential infrastructure, from power plants to water treatment systems. Join us, and bring your questions, as we talk about what's ahead.