Nest May Be The First Major Casualty Of Hollow 'Internet Of Things' Hype

from the hero-to-zero dept

When the Nest smart thermostat was launched back in 2011, you may recall that it was met with an absolute torrent of gushing media adoration, most of it heralding the real arrival of the smart home. That was in part thanks to the fact the company was founded by Tony Fadell and Matt Rogers, both ex-Apple engineers with some expertise in getting the media to fawn robotically over shiny kit. But a parade of high-profile PR failures have plagued the effort since, including several instances where botched firmware updates briefly bricked the device, leaving even the media’s resident internet of things evangelists annoyed.

Under the hood it has become increasingly clear that the company was plagued by what some cooperating companies recently proclaimed was an overall “culture of arrogance”, manifested in a reputation for blaming Nest’s own problems on partner companies. And being acquired by Alphabet (Google) didn’t seem to help matters. Despite expanding the company’s employee count from 280 to 1200 and being provided a “virtually unlimited” budget, the same press that built Nest into an internet of things god based on a single pretty thermostat design has suddenly and comically realized that Nest hasn’t actually done or produced much of anything:

“In return for all this investment, Nest delivered very little. The Nest Learning Thermostat and Nest Protect smoke detector both existed before the Google acquisition, and both received minor upgrades under Google’s (and later Alphabet’s) wing. A year after buying Dropcam, Nest released the Nest Cam, which was basically a rebranded Dropcam. Two-and-a-half years under Google/Alphabet, a quadrupling of the employee headcount, and half-a-billion dollars in acquisitions yielded minor yearly updates and a rebranded device. That’s all.”

There’s also the recent kerfuffle involving Nest acquiring smart home hub manufacturer Revolv in 2014, then effectively bricking a $300 device as of last month (again, without really providing anything to replace it with). Over the last year Nest also started leaking many top employees and there was a notably ugly and public feud with Dropcam co-founder and departing Nest employee Greg Duffy, who blamed Nest’s dysfunction on Fadell’s “tyrant bureaucrat” management style.

Now after six years leading Nest’s frontal assault to nowhere, co-founder Tony Fadell announced last Friday in a blog post that he will be stepping down as CEO. The departing executive tries valiantly to claim it was just time to “leave the nest” (ba dum bum):

“Today though, my news is bittersweet: I have decided that the time is right to ?leave the Nest.? While there is never a perfect time to transition, we?ve grown Nest to much more than a thermostat company. We?ve created a hardware + software + services ecosystem, which is still in the early growth stage and will continue to evolve to move further into the mainstream over the coming years.

Alphabet CEO Larry Page meanwhile issued a rosy statement of his own about this firing dressed up as a not firing:

“Under Tony?s leadership, Nest has catapulted the connected home into the mainstream, secured leadership positions for each of its products, and grown its revenue in excess of 50% year over year since they began shipping products. He?s a true visionary, and I look forward to continuing to work with him in his new role as advisor to Alphabet. I?m delighted that Marwan will be the new Nest CEO and am confident in his ability to deepen Nest?s partnerships, expand within enterprise channels, and bring Nest products to even more homes.”

And while that’s sweet and all, Fadell reportedly held an all hands Google meeting back in April after which he was pretty furiously mocked by Google employees, many of which wanted (and presumably still want) Fadell fired and Nest sold off. Google/Alphabet, meanwhile, appears to have gone full speed ahead on a variety of smart home projects that have nothing to do with Nest, including the company’s Asus and TP-Link OnHub routers (which have baked in IOT functionality not fully enabled yet), and the more recently unveiled Google Home (Google’s version of Amazon Echo).

Nest can certainly still turn things around whether it’s sold or remains at Alphabet, and it should soon be clear just how big of a role Fadell’s management style played in the company’s gear grinding. But the media’s manufacture and subsequent demolition of Nest is also part of a broader cautionary tale about the tech media’s boundless adoration of style over substance (or, security, as “smart” tea kettles, refrigerators, TVs, and vehicles keep illustrating) when it comes to the internet of shiny things.

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Companies: alphabet, dropcam, google, nest

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Comments on “Nest May Be The First Major Casualty Of Hollow 'Internet Of Things' Hype”

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Anonymous Anonymous Coward (profile) says:


If I were Larry Page, I might look at firing my acquisition team, especially those responsible for due diligence. It appears that any engineers who looked at the products were blinded by some shine.

But, you know, even if they start with a clean sheet of paper and re-engineer this thing and post the source code online, then swap out new hardware and replace everything out there at no cost to the current owners, I still would not trust ANY IoT product.

Anonymous Coward says:

Nest is is lipstick on a pig

Nest is a gimmick. It was lipstick on a thermostat pig. You need nothing more than a basic programmable thermostat and most likely nothing more than a non-programmable thermostat. I question whether anyone really saves energy raising and lowering their house temp throughout the day rather than let it get to a maintain a steady temp.

mb (profile) says:

Re: Nest is is lipstick on a pig

Just using a simple programmable thermostat I was able to cut about 20% from my heating bill. I live in the sub-arctic though so YMMV.
One of the advantages of something like Nest, is that it gives you a good visual representation of your energy usage patterns, so anyone that really cares, can tune their energy usage patterns to match their life-style. Arguably, Nest did this autonomously. In a moderate sized home around here, one can expect to pay around $5K/year for heating, so even a few % of your annual heating bill buys a lot of beer.

TKnarr (profile) says:

The devices are pretty much feature-complete

That’s the basic problem: the devices Nest is making were already feature-complete before they started. Thermostats, light bulbs, surveillance cameras, they all have decades of refinement behind them already. Their functions are basic enough that there really isn’t a lot of room for enhancement there. IoT can add control and reporting features (think lights and appliances or even outlets that can report power use in real-time, allowing you to see exactly how much power your home’s using and where it’s going) but things like a learning thermostat are easier to do with a controllable dumb thermostat and a process on a central controller that adjusts the settings. Combine that with an erroneous emphasis on “the cloud” and vendor lock-in and you’ve got a recipe for collapse.

Richard (profile) says:

Re: The devices are pretty much feature-complete

The company I worked for was making “Energyy Management sytems” that contained ALL the features that are possible (apart from connection to the internet – which didn’t exist at that time) in 1982.

It wasn’t a great seller – because it was overkill on a trivial problem. Plus ca change….

Anonymous Coward says:

“Nest is a gimmick. It was lipstick on a thermostat pig. You need nothing more than a basic programmable thermostat” – oh so true. I installed a couple basic programmable thermostats and they’ve been great.

Meanwhile… I *love* my Hue lights. Being able to adjust the brightness and color, setting different timers for any given day of the week and hooking them up to IFTTT has been amazing. (note: I have SAD and light sensitivity so major control of my lighting is important to me)

Anonymous Coward says:

This puts on display exactly why I don’t want the IoT in my house. Not only are they not dependable to be there working for you for the next decade due to a company dropping support or bricking your purchased device but it’s also a huge spy sitting right in your house announcing to any and all when you’re home, when you’re up, and when you’re gone.

Security is an after thought at best, doesn’t exist at worst. So many of these devices have turned out to be ways into your email, your identity, and in the long run into your wallet/bank account.

As long as these devices are not yours through the licensing, which does not continue to function if a company that makes it gets bought out, craters, or just simply decides to fold on the product, is a good reason to stay with tried and true that doesn’t need an internet connection to work.

Thank you but no thank you. When I buy something like a thermostat I expect it to work until the day comes it flat wears out. Not when the company goes broke or quits supporting it, forcing me to buy another through failure to work.

lars626 (profile) says:


I am always amazed at the near total lack of foresight by the engineering teams that put these things together. There is little to no security built in. They always seem surprised when somebody hacks into their pretty little gadget.

Who writes the specifications for these things, The three Stooges? Was the requirement deleted by management? Was the entire project done by recent graduates with no adult supervision?

Inquiring minds want to know!

Anonymous Coward says:

Re: Amazement

“the engineering teams that put these things together”

They’re not engineers. They’re unprofessional hucksters without any knowledge of decades of actual engineering practise. Makes me mad, in case you can’t tell (!). As another poster mentioned, building and energy management has been around for decades using robust equipment and in all sorts of environments. Unfortunately that equipment and software tends to cost more $ exactly because it works reliably and has high build quality.

Mason Wheeler (profile) says:

When the Nest smart thermostat was launched back in 2011, you may recall that it was met with an absolute torrent of gushing media adoration, most of it heralding the real arrival of the smart home.

Yep, I remember. As late as 2013, the media was sticking up for them and fawning over the way they “dar[ed] to make a better product.”

TimothyAWiseman (profile) says:

IOT is overhyped

While some internet of things items have proven themselves useful (my wife loves the Ring, an IOT doorbell, and even I see value in it), most of them are overhyped. I have yet to see a compelling (or even really any) use case for an internet connected fridge or tea kettle.

I do see a use case for an inernet connected thermostat, but the price for a Nest was far too high to justify its fairly small value.

There is a place for IOT, but I think (at least for the near future) it is much smaller than many companies want it to be.

John Fenderson (profile) says:

Re: IOT is overhyped

“There is a place for IOT, but I think (at least for the near future) it is much smaller than many companies want it to be.”


The hype has successfully confused two completely different things: networked things and cloud-connected things. Almost everything that is being hyped as IoT is the latter.

The fact is that being cloud-connected improves almost none of these things in any significant way. All it does is provide a rather significant data leak.

Networked things, however, are a different story. If you lived in an environment where the devices you interacted with could be coordinated to fit your lifestyle — without connected to the internet or subjecting you to spying by service providers — that would be a huge, huge benefit.

That market, however, is deliberately being completely ignored in favor of IoT for the sole reason that IoT provides a greater profit potential through datamining.

PT (profile) says:

If a firmware update bricks a device, you can blame it partly on incompetent programmers, but in reality the blame falls on incompetent management for rushing something out without proper testing.

Such problems are not unknown in companies founded by hot shot engineers. They seem not to know the limits of their own competence, and they just can’t keep from interfering with the engineering department. This makes for an atmosphere where mistakes – the boss’ mistakes – are covered up. Nobody dares draw attention to them and they’re fixed, if at all, behind the scenes and undocumented. If Quality Assurance knows anything about it, they know better than to draw attention to the cause of a problem, and that often means it doesn’t get reported.

If I were Page, I would have fired Fadell just for the bricking, never mind the business performance.

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