It took Google $3.2 billion in cash last week to snatch up digital thermostat company Nest. And it took a small startup about 24 hours to hack together a working equivalent of Nest’s signature product a few days later. That would be terrible news for Google – if the search giant’s chief interest in Nest was hardware. But as is the case with its purchase of robotics heavyweight Boston Dynamics, or even its dabbling in self-driving cars, Google’s acquisition of Nest isn’t just about creating new revenue opportunities – it’s about expanding the nodes and sensors it uses to collect data on our world. After the blockbuster sale, Spark in Minneapolis, a Nest competitor that makes kits so folks can build their own smart devices, managed to put together a similar Internet-connected thermostat that senses when you’re in the room. Of course, Spark’s hack isn’t as slick as an actual Nest product. CEO Zach Supalla laughs when asked where his company’s quick replication comes up short: “Lots of places.” He lauds Nest’s user interface and stylish design, but says that with more than a day’s work, many designers could get close to Nest’s aesthetic.Undoubtedly, that’s not lost on Google. There are only so many clever ways to manage the heat, and there’s lots of interest in mimicking a successful product. Numbers on Nest’s market penetration are tough to pin down, and the company doesn’t say much. In December, Nest CEO Tony Fadell told Forbes that 1 percent of American homes had Nest devices – a number worth taking with a very large grain of salt. Much of Nest’s value is in its production chain, installed customer base and the talented engineers who built the product. But from the perspective of a company like Google, Nest’s value goes much farther than that.That’s because Nest has built a following thanks to “smart” devices, which memorize users’ habits to predict what they want. “The machine learning aspect is really powerful,” Supalla said. “It observes your presence. It kind of figures you out, and makes your home more comfortable.”
But to do this?
“Sure, you need algorithms, but you really need data,” he said.
Google has been educating machines since Larry Page and Sergey Brin developed PageRank, the algorithm that basically organized today’s Internet. Google’s special sauce has always been the way it responds and adapts to human behaviors and environments as we search and surf the Internet. Becoming a company that pays the bills with advertising was simply a side effect, the best way to make money from its artificial intelligence.
Information the goal
Michael Mace, founder of informatics outfit Zekira, noted on Monday in a blog post that “Google’s mission statement to ‘organize the world’s information’ is no longer a meaningful guide to its actions. To me, the company looks less and less like a unified product company and more and more like a postmodern conglomerate.” But information is the unified product. And laying claim to the pipes, whether smart thermostats or Google Fiber, to route it all back to Mountain View is its game.Google says it will be hands-off with Nest’s brand and strategy; the company of 200 already knows its business. As always, Google will stay out of producing the hardware. Remember, this is a company that gives away its Android operating system to smartphone makers and outsources construction of Google-branded Nexus and Chromebook products.
Google doesn’t want to make machines, it just wants the ones and zeros that come out of them.
But let’s not assume that knowing whether your toes are toasty is the limit. Power consumption habits say a lot. In 2011, a group of University of Washington researchers showed they could figure out what programs you were watching on television by the patterns of energy coming into the home. Such data would be invaluable for anyone in the information business, whether it comes through a Nest device or a homemade one. “That’s the kind of thing you can’t build in a day,” Supalla said.
Source : sfgate.com/technology/article/Google-buys-Nest-to-feather-its-data-trackers-5160286.php