Since Google announced that it would be acquiring smart smoke detector and thermostat company Nest for $3.2 billion earlier this week, the Internet has been buzzing about what this move means for the “Internet of Things.” No doubt the “Things” revolution is picking up steam–according to Gartner, there will be nearly 26 billion devices on the Internet of Things by 2020 and ABI Research is making an even more generous estimate: 30 billion devices by 2020. As Slate’s Will Oremus points out, “it’s becoming increasingly clear that a growing amount of the world’s information is going to start coming, not from humans creating content, but from physical objects, including home appliances. They’re going to be communicating with your smartphone, with one another, and maybe in some cases with the wider Web.”
At Dreamforce this year, Salesforce.com CEO Marc Benioff brought a toothbrush on stage and talked about how it’s able to track his dental hygiene, and report back to his dentist. Ordinary appliances might soon be a thing of a past, he predicted, replaced by smarter electronics capable of harvesting a tremendous amount of a new kind of data, like thermostat settings in Nest’s case. This new kind of data, however, represents more than just another bit of information that Google can feed into its ad generating algorithms and sell to advertisers.
While many are quick to attribute Google’s purchase of Nest to a new commitment to the Internet of Things, Google has actually been committed to the Internet of Things for some time now: “Google bought smartphone maker Motorola Mobility in August 2011, smartwatch developer Wimm Labs in summer 2012, launched and then abandoned the Nexus Q media streaming device in summer 2012 but then delivered the Chromecast in summer 2013, and bought military robot maker Boston Dynamics in late 2013. Google’s self-driving car efforts fits in this group too,” writes InfoWorld’s Galen Gruman. While the Nest acquisition may be among the biggest moves they’ve made when it comes to the Internet of Things, it’s certainly not the first. So what’s different about Nest?
The Internet of Things is only part of the answer. The Nest move represents not only an evolution in the way customer data is collected and used, but also the potential for a revolution in the way customers feel about it. This potential for a revolution, in my mind, makes the acquisition less about the Internet of Things, and more about the Internet of Customers.
Benioff coined the term Internet of Customers at Dreamforce this year, citing a shift in the customer relationship space towards even more customer centricity. In many ways, the term is vague and doesn’t offer a major distinction from the Internet of Things. Still, it adds value to the discussion. Drawing attention to the customers in this Internet Revolution 2.0 is crucial, because they have the opportunity to change as much as the technology has. While there will always be those that are going to be more cautious about their online privacy than others, most people are aware that Google sells their data, but, for now, have still chosen to trust the company.
In a recent interview, Google engineering director Scott Huffman talked about the company’s role in the Internet of Things and when asked about privacy concerns, simply said: “We take privacy and security very seriously. Our goal is to keep users’ information private and use it in a way that helps that user.” Helpful as it may be, that information has always–and will continue to–come at a price, and consumers know what that price is. But many users are willing to pay it. “When I ask Google for travel information during my trip it draws it out using my hotel confirmation email. So I’m trusting Google with that information and in exchange I’m getting that value,” Huffman says.
As the Internet of Things slowly begins to permeate consumers’ lives, the question will become whether consumers, like Huffman suggests, are willing to share their information in exchange for a thermostat that can intuitively predict what the temperature should be when they’re returning home from a business trip. In the midst of the NSA scandal, people are now (perhaps more than ever) skeptical about the security of their data, yet they’re also uniquely attune to the vast and lucrative capabilities of smart technology, which leaves them at a critical crossroads. Google’s acquisition of Nest may prove that the tech giant is gearing up for the Internet of Things, but are consumers willing to (literally) welcome it into their home? Only time will tell, but if so, we should be gearing up for the Internet of Customers–an even greater phenomenon suggesting that consumers are no longer passive participants in an advertisement-driven quest for data but are making an active, educated decision to exchange that data for something they determined to be of greater value.