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“If you want to succeed, you should strike out on new paths rather than travel the worn paths of accepted success.” – John D. Rockefeller
January 13, 2014 - Google Inc. (NASDAQ: GOOG) incorporated in California in September 1998, announced today that it has entered into an agreement to buy Nest Labs Inc, the Palo Alto based start-up founded in 2010 by Apple Inc . alums, Tony Fadell and Matt Rogers, and a maker of new category of smart thermostats and protect smoke alarms that can be controlled by an app via a smart phone or tablet, for $3.2 billion in cash. By acquiring it, Google gains a popular seller of connected home HVAC devices while getting data on the growing number of customers whose energy usage is tracked online.
“Google likes to know everything they can about us, so I suppose devices that are monitoring what’s going on in our homes is another excellent way for them to gather that information,” said Danny Sullivan, a longtime Google analyst and a founding editor of Search Engine Land. “The more they’re tied into our everyday life, the more they feel they can deliver products we’ll like and ads.”
“Google likes to know everything they can about us, so I suppose devices that are monitoring what’s going on in our homes is another excellent way for them to gather that information,” said Danny Sullivan, a longtime Google analyst and a founding editor of Search Engine Land. “The more they’re tied into our everyday life, the more they feel they can deliver products we’ll like and ads.”
CNBC's Jon Fortt reports Google will acquire Nest Labs for $3.2 billion in cash.
Nest’s backers include Kleiner Perkins Caufield & Byers (KPCB), Google Ventures, Shasta Ventures, Lightspeed Venture Partners, Generation Investment Management LLP (Chairman Al Gore), Intertrust, and Venrock. It raised a first round in May 2010, and an $80 million round in January 2013, according to DJX VentureSource. In May 2011, Google Ventures led Series B round of financing and in 2012, Series C, according to Tony Fadell in his blog. According to Reuters, KPCB made a return of 20 times on the $20 million it has put in over the years, for a return of around $400 million. Shasta Ventures, which invested at the same time as KPCB stands to make a similar rate of return on its investment...
Is Google Buying Nest Labs to Compete With Apple? Bloomberg’s Ari Levy and Jon Erlichman report on Google’s purchase of Nest Labs for $3.2 Billion and what’s next for the company. They speak to Emily Chang on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)
The purchase is the third largest for Google, trailing behind $12.5 billion purchase of Motorola Mobility Holdings Inc. in 2012 and display-ad company DoubleClick, which cost slightly more at $3.24 billion in 2008. In addition to its Motorola unit, Google is designing wearable computing devices, including Google Glass computer eyewear. Google has also invested in software for laptop computers, driverless cars and televisions.
David Garrity of GVA Research weighs in on Google's acquisition deal for Nest Labs. "I think people are going to question to what extent they can actually monetize Nest Labs as quickly and as well as they may have monetized Motorola."
What can Nest Learning Thermostat do for my home? Meet the next generation thermostat. The Nest Learning Thermostat doesn’t need to be programmed — it remembers the temperature you set to build a personalized schedule. Nest turns itself down when you’re away to help save energy and you can change the temperature from anywhere using your smartphone, tablet or laptop.
What can Nest Protect: Smoke + Carbon Monoxide Alarm do for my home? It quiets down when you wave - no more swinging towels or brooms - and sends a message to your phone if the alarm goes off or the batteries run low. Instead of just chirping and howling at you, Nest Protect speaks with a human voice. It gives you a friendly Heads-Up before burning toast turns into an emergency, and tells you which room the smoke or CO is. Low-battery chirps ever rattle your dreams, Nightly Promise shows you its sensors and batteries are working before you doze off.
How much it costs?
The Nest thermostat costs $249 and the smoke detector is priced at $129
Where to buy?
Home Depot, Lowe's, BestBuy, Amazon, Apple Store
What's next for Nest Labs Inc.?
Nest says that in 2014 the Nest Protect will integrate with wired security systems. This is not just a hardware play, though: this also sets up Nest as the single app that can act as a hub to run all your connected home devices. Though Nest is the first company that has created an end-to-end smart thermostat service, which offers the software, a gadget and a data-filled website, it also has to watch the competition in the the smart thermostat market from the likes of Opower, Honeywell, Radio Thermostat Company of America, EnergyHub, and EcoFactor, and other home automation companies such as Smart Home Automation VA.
Another interesting aspect is that Nest did all of the hosting of its solution on Amazon Web Services (AWS) and it will be interesting to see how quickly Google can put all this on Compute Engine, its public cloud. Nest, along with Snapchat, which already runs on Google, would be among its marquee customers.
Nest’s key technologies were described by Mr. Fadell in an interview in November 2013 as “communications, algorithms, sensors and user experience, running over a network to the cloud” and as such, it is just the beginning of a disruption in the home automation market.
What's in it for the market?
Though home automation is certainly in the lime light today; I believe that the next wave will be in the commercial and Industrial automation markets for office complexes, educational institutions, shopping malls, industrial warehouses, retail distribution centers, and factories in the next decade...An interesting space to watch and witness how Nest Labs Inc. could give a tough competition to the leading incumbent such as Honeywell or or it could act as an awakening call to the incumbents to assess how they transform their products, services, and solutions to position themselves for success in the Internet of Everything (IoE) Economy!!!
Nest says that in 2014 the Nest Protect will integrate with wired security systems. This is not just a hardware play, though: this also sets up Nest as the single app that can act as a hub to run all your connected home devices. Though Nest is the first company that has created an end-to-end smart thermostat service, which offers the software, a gadget and a data-filled website, it also has to watch the competition in the the smart thermostat market from the likes of Opower, Honeywell, Radio Thermostat Company of America, EnergyHub, and EcoFactor, and other home automation companies such as Smart Home Automation VA.
Another interesting aspect is that Nest did all of the hosting of its solution on Amazon Web Services (AWS) and it will be interesting to see how quickly Google can put all this on Compute Engine, its public cloud. Nest, along with Snapchat, which already runs on Google, would be among its marquee customers.
Nest’s key technologies were described by Mr. Fadell in an interview in November 2013 as “communications, algorithms, sensors and user experience, running over a network to the cloud” and as such, it is just the beginning of a disruption in the home automation market.
What's in it for the market?
Though home automation is certainly in the lime light today; I believe that the next wave will be in the commercial and Industrial automation markets for office complexes, educational institutions, shopping malls, industrial warehouses, retail distribution centers, and factories in the next decade...An interesting space to watch and witness how Nest Labs Inc. could give a tough competition to the leading incumbent such as Honeywell or or it could act as an awakening call to the incumbents to assess how they transform their products, services, and solutions to position themselves for success in the Internet of Everything (IoE) Economy!!!
About the Author
About Google
Google is a global technology leader focused on improving the ways people connect with information that
was incorporated in California in September 1998 and reincorporated in Delaware in August 2003. It completed our initial public offering in August 2004 and our Class A common stock is listed on the Nasdaq Global Select Market under the symbol “GOOG.”
Google's Motorola business is comprised of two operating segments. The Mobile segment is focused on mobile wireless devices and related products and services. The Home segment is focused on technologies and devices that provide video entertainment services to consumers by enabling subscribers to access a variety of interactive digital television services.
Google is a global technology leader focused on improving the ways people connect with information that
was incorporated in California in September 1998 and reincorporated in Delaware in August 2003. It completed our initial public offering in August 2004 and our Class A common stock is listed on the Nasdaq Global Select Market under the symbol “GOOG.”
Google's Motorola business is comprised of two operating segments. The Mobile segment is focused on mobile wireless devices and related products and services. The Home segment is focused on technologies and devices that provide video entertainment services to consumers by enabling subscribers to access a variety of interactive digital television services.
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