Where does Nest roost at Google’s restructured company, Alphabet, Inc.? With a sluggish product portfolio and the dramatic departure of co-founder and CEO Tony Fadell, Nest’s place on the Google/Alphabet family tree follows a tangled trail.  

Bringing a fresh perspective as the new Product Manager for Nest, Mehul Nariyawala returns to the company’s roots of sexy intelligence. The Nest Outdoor Cam, announced today, relies heavily on machine learning to deliver a contextualized service that knows the difference between a human face and a curious mosquito, and gets selective with motion alerts.

Nest has spent the last year studying the shortcomings of other home security cameras to address nearly every issue currently plaguing the industry. With an all-wired solution, Nest avoids the lag time of motion-triggered recordings. With an extra-wide viewing angle and a bevy of LEDs for Night Vision, Nest’s Outdoor Cam sees more than most rivals. With a paintable cable cord, Nest appeals to its design savvy user base. With Person Alerts, Nest only notifies when it’s fairly certain it’s seen a human loiterer.  

Yet for all the problems Nest sets out to fix with the Outdoor Cam, it circumstantially creates a new set of issues. What a heady request to buyers, trusting an Alphabet-owned company with the all-seeing, machine-learning eye in the sky!

Caught Up

With founders from Apple and a $3.2 billion acquisition by Google, Nest helped establish demand for high-end hardware in the home. Expected by some to lead Google’s smart home initiative, office culture clashes and a saturated market ultimately displaced Nest’s efforts. Despite launching a smoke detector and indoor security cameras, Nest found itself competing in a very crowded market where its core product quickly became the commoditized feature bundled in established home cable packages. In 2015 Nest sales reached $340 million, missing early expectations given its costly acquisition by Google. 

As with many others seeking retribution in IoT’s consumer market, Nest doubles down on the app experience — a second life in software. A recent study from Capgemini cites numbers from Cisco projecting the potential for IoT to generate $19 trillion in value-added services in the coming years, yet 70 percent of organizations participating in the study have yet to see significant revenue from IoT investments. The company that can really nail IoT services could end up with a unique opportunity within a massive market.

For Nest, its own IoT services are primed for an upgrade. The smart thermostat maker has seen fierce competition from Honeywell, beating Nest at its own game of high-end devices coupled with user-friendly mobile applications. According to a recent study from Argus Insights, this synchronized hardware/software approach is a difficult balance for many players in IoT smart home services, including Comcast, ADT and AT&T. To that end, Comcast recently acquired long time partner Icontrol, the company powering SaaS solutions for its Xfinity smart home platform.

The Outdoor Cam’s biggest selling point will be its smart services with Person Alerts, the latest of many app addons Nest hopes will attract premium-paying users.

Nest’s Outdoor Cam is weatherproof, wired and white for optimal performance.

The Obvious Questions Answered

There will be wires

Design savvy homeowners will want to keep this in mind when considering Nest’s new weatherproof camera. On the bright side, its extra long cord is paintable to match siding, grout and gutters. For those wanting to paint the camera itself, Nest would cite this survey of real burglars naming visibly prominent cameras as the most effective deterrents. Also, the camera’s color is intentional:

“The camera is colored white because it’s the only color that reflects the full spectrum of light, versus absorbing it. This helps to control the temperature of the unit and protect the electronics inside,” explained Matt Flegal from Nest’s PR team. “If people paint the camera they might be subjecting it to higher temperatures which could disrupt the operation.”

Another noteworthy design component of Nest’s cam is the magnetic base for articulated positioning and quick take-down. The mechanism appears to be quite similar to that found on Arlo’s home security cameras, a system offered by Netgear. 

The app

Aside from Person Alerts, Nest’s app upgrade includes a new feature called Spaces, which visually outlines camera zones instead of merely displaying icons and camera nicknames.

There’s now the ability to privately share live video feeds.

Price + Specs

Priced at $199.99, the Nest’s Outdoor Cam is a weatherproof version of its in-home security camera, with a wider-than-most 130° view. It features a 3MP sensor able to capture up to 1080p at 30 frames per second videos in color, with 8x digital zoom. Video is viewed in 1080p HD, and boosts night vision with eight infrared LEDs circling the camera face. Like Nest’s Indoor Cam, users can talk and listen from app to camera. Live video can be viewed from Nest’s mobile app, secured as 2048-bit RSA key with 128-bit SSL to encrypt streams.

Additional Costs

Nest Aware subscription, with tiered pricing according to how many days you want to keep video. A 10-day video vault will cost $10/mo. or $100/yr. Thirty-day video history costs $30/mo. or $300/yr.

Additional cameras add at least $5 apiece to the monthly subscription fees. See here for full pricing details.

Availability

Pre-orders begin July 14, 2016. Hits store shelves this fall. Nest has also said multi-camera packs will be available “later this year.”

​Plot Twist

Given Nest’s worrisome backstory, the company’s best bet for a proper comeback is through innovation. This is where machine learning comes into play, layering intelligence atop Nest’s Outdoor Cam with Person Alerts. In order to tell a homeowner with certainty that a human is loitering near the garage, Nest has trained its software to detect faces. In turn, Nest will also send an alert when it’s somewhat certain it’s detected a person on the property.

“Humans are capable of not only understanding motion, but knowing which is important,” explained Nariyawala, likening the Nest camera to the human eye. “The algorithms related to our eyes aren’t perfect — sometimes we see things but we’re not 100 percent sure. We always communicate this in a meaningful way. In the same way, when details are available from the camera, we can send the alert. In scenarios where a face is hidden partially behind a fence, we’ll offer a warning that there might be someone.”

One challenge Nest faced in developing the artificial intelligence to power Person Alerts was modifying facial detection from image processing, where people are typically closer in proximity and are looking directly at the camera. For an outdoor, mounted security camera, the view is angled down. “We spent quite a bit of time on this, to be able to give nuanced alerts and allow [homeowners] to judge for themselves. We’ve had to collect tons of video and train quite a bit of data over the past year-and-a-half, but by no means is our work done,” explained Nariyawala.

Does that mean Nest hopes to continue training its system based on input from homeowners, effectively validating the video content for only somewhat certain Person Alerts? Nest says no — for privacy reasons, the company does not have access to user video. According to Nest, direct user feedback will be the primary indicator for improving its facial detection software, reiterating that its new cameras are not able to recognize or identify faces. Nest is considering the addition of other improvements to Person Alerts like the ability to distinguish family members from strangers on the property, based on factors like the time a detected person spends in the vicinity.

“We’re a part of Alphabet, not Google”

With software services being at the heart of Nest’s new product launch, the company takes cues from the enterprise cloud sector, promoting today’s upgrades with competitive cost in mind. Existing subscribers will incur no new charges and are automatically upgraded, the perk being 24/7 video recording accessible through the Nest application, along with intelligent Person Alerts. Having been acquired by Google there’s an assumption that Nest might rely on its parent company to subsidize the costs of added cloud services, but since Google’s split under the new umbrella of Alphabet, Nest is operating a bit more independently.

“We’re part of Alphabet, not Google. So money matters,” Nariyawala explained, going on to justify its comparatively pricier subscription costs with intentions for homeowners to keep Nest products for at least five years. Building with longevity in mind, Nariyawala sees a better opportunity to “build intelligence in the cloud and improve over time.”

Nest is also promoting the free cloud upgrades with the expectation that cloud costs will only continue to get cheaper. The company’s SaaS strategy is to upload everything and let end users determine what content is important.

So how much is Nest really taking on in order to promote its new cloud services to succeed in its long game? Being a wired camera that records all day and night, bandwidth and streaming is also always on, whereas a wireless security camera cuts bandwidth by only streaming and recording when motion is detected. Video data sent to the cloud will likely be compressed or transcoded down to a lower resolution to save on bandwidth and storage costs. From there a number of variables could affect cloud requirements and subsequent pricing models, according to Brian Gracely, an analyst at Wikibon Research, owned by the same company as SiliconANGLE.

Because none of the major cloud providers (AWS, Azure, Google) have a native video processing service for things like facial detection, this intelligent data processing would happen at the application level. To make such an application more efficient, Gracely explained that video data could be stored in a NoSQL database for easier processing. Alternatively, the application could be running on a virtual machine or within a container, turning video frames into images for analysis, and storing the data somewhere else.

Despite Nest’s asserted independence from Google-branded, consumer-facing cloud applications, as well as the obvious lack of direct influence within Google’s broader smart home initiative, there will be lingering questions regarding Alphabet’s ultimate goals with Nest data. The new security camera, wired for 24/7 coverage and streaming access from the cloud, will be a likely target for political interest groups in the U.S. and beyond. Concerned citizens will wonder what data can Google really see, whether that data will be tied into its advertising platform, and how readily that data can be shared with law enforcement upon request. See here for Nest’s on-hand responses to many of these questions.

These data privacy questions were raised at the onset of Nest’s acquisition by Google, and will resurface with the company’s introduction of a new kind of smart camera. As Nest looks to innovate with intelligent services, the company must also placate homeowners as they weigh the value of compromised privacy in today’s digital economy.

photo credit: Because one of these days, I swear I’ll explode… via photopin (license)