Apparently hoping to bolster its chances in the smart home market, Google Inc. announced Wednesday that it’s once again joining forces with Nest, the company it bought for $3.2 billion in 2014.

Today’s announcement comes just a few months after the Wall Street Journal reported a possible integration of the entire Nest team into Google to assist with its smart-home ambitions. The new structure will make it easier to integrate Google’s artificial intelligence and digital assistant into new Nest products.  

”Given the trickle of new Nest products over four years and the gusher of Google Home hardware products, this doesn’t surprise me at all,” said Patrick Moorhead, president and principal analyst at Moor Insights & Strategy.

Parent company Alphabet Inc. spun Nest into a separate unit following its acquisition of the maker of smart thermostats and fire alarms. It moved a few dozen developers from Nest to Google in 2016.

Nest Chief Executive Marwan Fawaz will now report to Google’s hardware chief, Rick Osterloh, under the new structure. A former Motorola executive, Osterloh took charge of all of Google’s consumer devices, which includes Google Home smart speakers, Pixel smartphones and Chromecast streaming devices, in 2016.

“The success Amazon Echo had in the U.S. over the holidays and at CES likely also had to do something with this move,” said Moorhead. “This reorganization doesn’t guarantee success given the issues with Pixel XL and Home mini and Amazon’s momentum, but organizes like resources together, which could lead to more products more quickly.”

Amazon.com Inc. reported a “record holiday shopping season” for its Amazon devices, with the Echo Dot listed as the No. 1-selling Amazon device. Google, which is normally AWOL from the tech show, also dominated at the Consumer Electronics Show with one of the biggest presences at the event and a host of new integrations for its Google Assistant.

By 2020, 20.4 billion connected things will be in use worldwide, while hardware spending from both enterprise and consumer segments will reach almost $3 trillion, according to Gartner Inc.

The product of choice that is currently dominating the smart home is smart speakers, with Google and Amazon accounting for 94 percent of the devices in use, according to Strategy Analytics Inc. Both Google and Amazon continue to add new speakers to its lineup, while new competition has arrived, albeit delayed, from Apple Inc. with its premium HomePod, which goes on sale Friday.

Nest already offers Google Assistant integration in some of its products, such as the Nest Cam IQ indoor camera, and users will soon be able to arm their Nest Secure alarm system with a single voice command.

During an interview Tuesday, Fawaz said Nest has shipped more than 11 million products since its first thermostat went on sale in 2011. The companies anticipate no “significant role reductions.” Nest will also remain in its current location in Palo Alto rather than making the move to the Googleplex in Mountain View.

Although both Nest and Google have already finalized their hardware roadmaps for 2018, the companies will start codeveloping products in the next two years.

Image: Google