At last week’s Google I/O 2019 conference, Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google dropped a bombshell. The company’s Nest division — producer of smart home products like the Nest Learning Thermostat — became the umbrella brand for Google’s smart home ambitions. So products like the Google Hub became the Google Nest Hub. The controversy arose with the announcement that the popular “Works with Nest” program was being axed by the end of August, as part of Google’s newfound focus on consumer privacy and security.
That move would have caused chaos in many homes. Devices and services that were integrated with Nest products would suddenly cease to work with them.
After a week of outcry from smart home adopters, Nest owners and manufacturers of “Works with Nest” certified products, Google blinked.
Walking Back “Works With Nest” Termination
In its original announcement, Google laid out an aggressive plan that would see its “Works with Nest” program terminated by the end of August. At that point, smart home devices that were integrated with Nest products would lose their connectivity.
In a blog post titled “We hear you: updates to Works with Nest” Google responded to the many critics of its decision and announced it is softening its stance. Instead of cutting off existing integration on Aug. 31, the company will stop accepting new “Works with Nest” connections. Existing connections will continue to work, but will not get any new functionality updates.
At the same time, the company is working to replicate Nest’s popular Home/Away status (which is used to trigger many third-party smart devices) in Google Assistant later this year. And companies that receive more granular data from Nest products than “Works with Google Assistant” allows will have the opportunity to undergo a security audit. They may be allowed to retain some of that granularity on the new platform, although Google says that passing the audit will include giving consumers control over what Nest data or devices are accessed.
Consumers are still expected to eventually migrate to a Google account, at which point their “Works with Nest” connections will cease to function. However, the company is expecting much of the functionality will be replicated in “Works with Google Assistant” and most importantly, consumers are not being arbitrarily forced to give up what they currently have on Aug. 31.
Alexa Gets Singled Out for Extra Assistance
Amazon’s (NASDAQ:AMZN) Alexa was singled out by Google in the post.
“We’re working with Amazon to migrate the Nest skill that lets you control your Nest thermostat and view your Nest camera livestream via Amazon Alexa.”
Alexa is a key competitor to Google Assistant as a voice assistant. Amazon’s market-leading Echo smart speakers are the primary competition to the Google Nest Home smart speakers. And the two companies have been sparring over their smart home products for several years. However, it makes sense that GOOGL is playing nice here. With Amazon’s significant lead in the smart home — the Echo still has more than 60% of the Smart speaker market — not accommodating Alexa could risk hurting future Nest sales.
Why Walk It Back?
Google’s plan was to migrate everything to its “Works with Google Assistant” program, a move with several advantages. It unifies everything under one platform, instead of having to worry about maintaining two separate code bases. And it supports the company’s new focus on consumer privacy and data security because “Works with Google Assistant” doesn’t provide the same data granularity that Nest’s integrations allow.
Unfortunately for consumers, that solution meant that many existing integrations simply wouldn’t work as well as they do now … even if the third-party device or service developer put the effort into migrating to “Works with Google Assistant.” Many would cease to function altogether.
That’s a big deal and would have caused chaos. For example, there are third-party smart lights that connect to Nest Protect devices and light up in red if the smoke detector goes off. My monitored home security system can control my Nest home thermostat. You can use a voice command to tell Alexa to display the feed from a Nest Home camera on your T.V. The backlash was already beginning to hurt Nest — and that’s not great news for Google stock, when the company paid $3.2 billion for the smart home pioneer.
Walking back the decision to outright axe “Works with Nest” still accomplishes most of Google’s goals. Most existing Nest product owners can continue doing what they’re doing indefinitely (although there was no word on IFTTT support), while Google doesn’t have to put resources into continuing to support that platform. At the same time, it’s building up “Works with Google Assistant” and when consumers choose to make that migration, the company’s data security and privacy goals are accomplished. And under this revised approach, the risk of tarnishing the Nest brand and having consumers turn against Google as a smart home partner are significantly reduced.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
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