So, this week’s big story was Google buying Nest for a tad over $3 billion. Not a bad day’s work for Tony and the team over at Nest. The news, blogs, and coffee breaks everywhere was talking about the valuation and what Google was after.
In the world of AV we have watched Nest as they have become the “cool” thermostat. Their Apple-esque design mixed with the ease of use make them poised to take over home automation and make it mainstream. With the purchase of Nest, some of those projections can easily be pushed onto Google. They are the 500-lb gorilla, after all. There are even some in the industry who have claimed that Crestron and AMX had better watch out because Google was going to take over the automation industry.
How do I put this without sounding like a Sherman? Um, no.
Let’s break this down. By every smart analyst, the control/automation segment of AV might be about $500 million. That’s with all the players put together. For you and me, that is quite a sum of money. For someone who just spent six times that amount, not so much. Then you put in the fact that Nest makes a great thermostat. Let that sink in for a second. A thermostat. The back end is really great and the potential is through the roof. It’s just a thermostat, though. It isn’t even, from a control standpoint, the most versatile one because it doesn’t control multiple zones, or do some big building management control. From an end user’s perspective, thermostats are pretty simple. They either make the temperature go up or go down. Before you mention the smoke detector, yes they have that as well. It is also pretty great.
Now to what Google really wants. Google has said for years that the more we use the Internet, the better it is for them. They are after data. Pure and simple. The other thing they are after is Tony Fadell. The visionary behind Nest, who also worked on the iPod and iPhone teams, is a pretty remarkable guy. So, for $3 billion, he becomes part of your team.
Those who are geared up over this purchase and what it means for AV are fussing over the “potential”. Let’s be honest for a minute. Google makes more per day than some AV companies do in a year. If they wanted to take over control/automation they could have already purchased AMX or Crestron, or anyone else for that matter, or created their own company to “take over”. They haven’t because it isn’t a priority. They are after data, pure and simple.
Thanks for taking the time to read my blog. Have a great week.
