Nest: convenience vs. data

Nest, the company that makes thermostats and gas detectors bought by Google at the beginning of the year for 3.2 billion dollars has just announced an interesting strategy: deals with electricity distributors to install its thermostats free for customers. The idea is to speed up penetration of the company’s products in homes (at the time of the Google buy out it was present in around 1 percent of US homes) in exchange for associating itself with the main parties interested in reducing and rationalizing energy use.

Nest’s thermostats, which have just been updated to include information about the weather, as well as including algorithms that learn users’ habits and preferences, are very easy to use, thanks to the work of Tony Fadell, a former Apple designer. Users don’t have to deal with complex panels of the kinds found in The Jetsons’ household; all that is required is to turn the thermostat one way when the ambient temperature is to hot, and in another direction when it is too cold. The thermostat, for the first time in history is now almost sexy, an intelligent device able to predict its owner’s preferences, as well as being fitted with smoke and gas detectors.

The obvious question is what can the company do with a huge network of sensors installed in thousands of homes, sensors able to detect heat, light, movement, and ultrasound. The answer could be to suggest to electricity companies that they could partially manage the temperatures of their customers’ homes, thus enabling them to manage their aggregate consumption at times of peak demand. These savings could be passed on to customers, and could also lead to information exchange with the utilities, which have traditionally limited themselves to providing a commodity, pretty much ignoring what the client actually wants or needs.

Nest’s agreements with the electricity companies will have to be negotiated, but might include anything from a percentage of the savings to deals direct with customers. Nest says that it won’t allow utilities to actually control its thermostats, and that any information gathered would not be shared with third parties — not even with Google — but it is very likely that some customers might have their suspicions.

Would customers be prepared to share information about how much electricity they use with electricity suppliers, who after all, are not exactly famed for their customer service? Could a mutually beneficial relationship be established on the basis of this information and on these types of devices?

From the client’s perspective, the idea would be to increase convenience and savings in return for providing data that some people might consider highly personal. As we install more and more of these kinds of intelligent sensors, they take on a hitherto unimagined relevance. It is clear that the development of the internet of things and the intelligent home will oblige us to get used to these kinds of intrusions.

(En español, aquí)