When Google announced its acquisition of Nest back in January, I wrote that the rationale of the deal was largely about enabling potential APIs and third-party apps. With the news that Google is indeed opening up Nest to (approved) third parties, it would now seem that I even wasn’t entirely wrong. With a few more of these recent and unexpected kernels of corn, this blind chicken might be able to make popcorn one day. Even a spoonful would do, really.
As far as Google’s strategic interests are concerned, Nest and Dropcam should be seen first and foremost as building blocks for IoT applications. That is not meant to say that they are not compelling standalone propositions (because they are), but that their value can supercharged by enabling other smart products to tie up with them. And when a user owns enough of these building blocks, or other products that connect with them, they also represent an opportunity for exclusively digital applications, with no associated physical products behind them, to develop something even more customized and sophisticated.
The most valuable kinds of applications tend to solve certain problems. The more complex, and thus more valuable, problems require input from various and often diverse data sources, which in turn quite seriously limits what likes of Nest, Jawbone, and Lifx can ever achieve on a standalone basis. That’s why Google is acquiring some of these enablers and ramping up their marketing – in order to get some critical mass that will attract third parties to join the ecosystem. Don’t mistake Google’s strategy for a truly open and interoperable Internet of Things, but bear in mind that in the medium term such platform-centric approaches are the most viable way to make homes smart and selves quantified.
In terms of use cases, Google’s IoT vision is actually very similar to what, say, Qualcomm has been displaying with its AllSeen demoes. The key difference here, however, is that in Nest and Dropcam Google will have an existing bedrock to which the new entrants can anchor their own products and applications. That's a major advantage when the interested third parties need to prioritize their early investments. This aspect should give Google an edge also over Apple's HomeKit, which (unlike HealthKit) may suffer from the lack of Nest-like spearheads.
