Google's purchase of uber-cool thermostat and fire alarm maker Nest for $3.2 billion isn't that difficult to understand: Internet of things = you need things, Internet-y things, to sell. Are we going to see Google, Microsoft and Apple now duke it out in the aisles of Home Depot?
Nest was founded by two very clever guys: Tony Fadell and Matt Rogers. Formerly Apple-ites who built the iPod and were there to realize Jobs' vision for the iPhone. The company is flush with pedigree executives from Google, Apple, Ford and Logitech. It is built for billion dollar exits.
It makes a thermostat and a smoke detector. These are, like all thermostats and smoke detectors, devices that let you turn a dial and control the temperature in your abode and warn you when said abode is smoking, respectively.
They are, respectively, $249 and $129. There are other thermostats that cost more than $200, but you can get one for about $30 that does the job. You can definitely get a smoke detector for about $15.
To be fair, Nest also sells a 100% Merino lambs wool throw and a stylish Nest water bottle. $99 and $45 respectively. I won't say anything about how much you can get a decent throw and water bottle for these days because, I will have to start eating the rich if I go any further.
To be even fairer, Nest's thermostat and smoke detector are kind of cool. They are nicely designed in that Apple-y sort of way that makes you feel like you live in an all white space pod and are served by robot slaves.
The following two videos will make you realize how much your life sucks without Nest products to replace the Stone Age devices that you use right now. Suck it, oldies.Google just acquired Nest for $3.2 billion and it probably makes sense in the high stakes world that companies like Google and Apple exist. Google needed to just blow the deal out of the water to make sure that Apple didn't get the company first. That's one reason to move on this acquisition.
There is also the notion that Google will be able to track data about you and your life through these devices and thereby invade and occupy your lives in even more detail. Which is really creepy but apparently creepy is a legitimate business practice in the socially networked, Internet of Things world that we live in these days.
But, probably more importantly than anything else is that when you start talking about everything being connected to the Internet and the idea that there will be this so-called Internet of Things, you have to start thinking about what the actually "Things" are going to be, and you have to have "Things" to sell.
That's really the best explanation for why Google bought Nest. It needs to have things to sell and frankly, let's be honest, Google Glass is not going to set the world on fire.
On the other hand, it is also a sort of truism that acquisitions and mergers at this gigantic level rarely turn into gigantic wins for the dominant party, ie, Google in this instance. Meaning that Google can screw up this thing because, it really isn't built to sell things.
If, however, the market for these over-priced devices does explode because Google pushes it, it will entail and demand a drop in prices and it will create a host of copycats. In other words, the very thing that makes Nest so interesting today, its cool factor and sense of superiority, will be redundant when other round thermostats come to market with similar functionality and pretty lights and mobile apps and a $40 price tag on the shelf at Home Depot.
There's going to come a time when the billion dollar minds behind Apple products will have to realize that the price of cool is too high and people will kind of calm down and accept that there are good alternatives at a fraction of the cost - cough, Android phones versus iPhone, cough.
Until then, bask in the hagiography of our technology leaders leading us into the Utopian ideal of the Internet of Things.