Google’s Nest acquisition will speed up the ‘smart grid’, but it’ll come at a cost

Nest Heat

Google has just bought Nest, maker of the smart thermostat, for a whopping $3.2 billion. It’s not immediately clear what’s motivated this acquisition, but with it Google is getting its hands on a relatively rare and untapped source of data – detailed information about your home’s power consumption. This could herald both good and bad news – Google’s massive financial power and should help to further the development of the ‘smart grid’ that’s all about minimizing power consumption and saving money, but it could also lead to even greater intrusion into our privacy.

If you’ve not heard of Nest, it’s a four-year old startup that began life with its Nest Learning Thermostat, an internet-connected thermostat that seeks to learn about your lifestyle and save energy accordingly by switching off the heating when you go to bed, when you leave the home etc. More recently, Nest has expanded further into the smart home with the development of a smart smoke and carbon-monoxide detector, which lets you know if your home’s on fire.

The acquisition has led to plenty of jokes about Google linking your home’s ambient temperature to Google+, but actually this isn’t it’s first venture into smart energy systems. Just last month, Google was rumored to have been making a smart thermostat of its own, and the company’s independent investing firm, Google Ventures, is already a backer of Nest. Google has also made some serious investments in solar power companies that provide photovoltaic panels for the home, and the technology behind this could definitely benefit from the kind of effective smart-metering that Nest delivers. As the smart grid (and smart homes in general) gets smarter and bigger, Nest’s smart technology will surely play a fundamental role in its development, and could potentially open up a world of opportunities for Google.

Speaking to theCUBE earlier today, SiliconANGLE founding editor John Furrier said that by acquiring Nest, Google was making its own play on the Internet of Things

“The market opportunity is clear, the Internet of Things is the future of the world,” stated Furrier. “The business opportunity for Google is that this is the home. If you think about your home now, everything is going to be connected, and everything is going to require a new set of software services.”

“Google could have that thermostat, that could also be an internet access point, it could also be a balancer between signal, managing your Instagram, managing your AT&T bills – all of those things are now possible for Google. This is just another mainstream hi-tech device it can put in its arsenal, alongside Google Glass, self-driving cars, your search engine – it’s all about personalization in your connected home.”

Perhaps the real reason for this acquisition lies in Google’s own power management. As one of the largest energy consumers in the world, Nest Energy Services, which manages partnerships between power companies and Nest, will surely be of interest to Google. The company makes no secret of its desire to improve its data center’s power consumption and save money, and with the acquisition of Nest it’ll surely be looking to apply its technology to cut down on one of its own biggest expenditures.

The cost of a smarter home – your privacy?


Cheaper and more efficient energy is certainly most welcome, but it could come at a cost. Some of Google’s recent moves have been less than comforting – such as its forcing YouTube viewers to comment using their own names, and more recently its decision to allow anyone on Google+ to email you via Gmail. Now that it’s gotten its hands on Nest, one has to wonder what it intends to do with all that energy consumption data.

Nest has already tried to address this on its blog. The company stated that it will continue to operate independently of Google, and pointed to its privacy policy which states that customer data collection is limited to “providing and improving Nest’s products and services.” That’s all well and good, but there’s nothing to stop Google or Next from changing that privacy policy or integrating their products and services more deeply later on down the road.

“You’re going to see a huge argument arise about policy, about privacy,” states Furrier. “Will this thermostat be programmable, can I see anything, if I have a Nest device, is it snooping on me? These are the questions that everyone is going to be asking, and that’s the business challenge for Google.”

The worry is that Nest’s trove of data will be too tempting for Google to ignore. After all, the search engine has long ago evolved from being a search engine – these days, Google is all about providing answers and suggestions (think Google Now), and that requires greater contextual awareness about the people who’re asking it questions.

Nest’s products can almost certainly give Google greater contextual awareness about you, and this will definitely provide us with more convenience and perhaps even some savings – but the downside is that Google will gain almost total knowledge of what you’re doing at any moment, and that’s more than a little worrying, especially if entities like the NSA really do have ‘backdoor’ access to all of that data.