Google Doesn’t Want Control

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.

1 thought on “Google Doesn’t Want Control”

  1. I think a staggering majority of residential and commercial consumers are missing from that $500 million figure.

    The way I see it Crestron and AMX are in the business of cat herding – they make products that control other products and cooperation from manufacturers ranges from pretty good to non-existent.

    Enter Google, a cat seducer. They could release an API to allow manufacturers to create apps for other appliances and devices (rather than modules which only a programmer can work with). Each app would be customized to the device its controlling by the manufacturer. I’m guessing it would be cheaper to develop than a physical remote control.

    Just because Google is after data doesn’t mean they won’t make a better control/automation product to get it. Data will be their profit motive to do control/automation better. In general I don’t think Crestron or AMX would be attractive companies to acquire because they are in a competitive deadlock with one another which is evidenced by the war over switching speeds. They seem too caught up in battles that are either beyond their control or irrelevant.

    I’ve been in a few Google meeting rooms, and they don’t use Crestron or AMX – they use Linux boxes with custom touchscreen interfaces. It was a side-project for an engineer to get a promotion which points to the fact that they could do it with their eyes closed. I think the big question is can they market data from those systems. The last thing they want is an end-user calling them directly for support, so I’m inclined to think they’ll only consider the consumer market which they already have a solid foothold in via Android.

    I’d actually pin my commercial hopes on Microsoft or IBM who care a lot more about serving businesses with technology.

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