Google Raids Nest Labs Engineering Team To Bolster Smart Home Projects

Nest Labs pounced on the emerging Internet of Things market by making and selling Internet-connected smart thermostats and smoke detectors. That caught the attention of Google, which in 2014 acquired the company for $3.2 billion. Since then, Google's had trouble figuring out how best to utilize its acquisition, though parent company Alphabet has an idea. Alphabet's made the decision to pluck Nest's entire platform team and make it a part of Google.

The idea is to creat a unified IoT platform. Google executive Hiroshi Lockheimer will spearhead the effort, though it's not clear if he'll also continue in his current role as senior vice president of Android. Either way, the IoT group will focus its efforts on Google Home, a smart speaker similar to Amazon Echo, as well as countering Amazon's other initiatives in the smart home sector.


This is all according to Fortune, which says the move is at least partially motivated by money. There's no doubt that Google and Nest will play this up as a logical pairing, though at the same time, Alphabet's been looking to cut costs at some of its smaller subsidiaries. One way to do that is by letting Google absorb the payroll of Nest's software developers.

What happens from here is sort of a big deal. The Nest acquisition hasn't been the perfect marriage that Nest and Google hoped, a point that was underscored in June when Nest co-founder and CEO Tony Fadell jumped ship. Though the parting was amicable and Fadell said all the right things, there were reports of a less than rosy relationship with Alphabet's brass.

The IoT market is expected to balloon over the coming years, particularly in the enterprise. Around this time last year, market research firm ABI Research predicted that the number of business-to-business (B2B) IoT connections would more than quadruple to 5.4 billion by 2020. More recently, a Research and Markets report pointed to connected homes, connected vehicles, and connected retail as early leading areas of IoT, but said that enterprise and industrial IoT represent much larger opportunity areas for innovation and economic impact.