The big home automation news out of Alphabet last week was the transition of Tony Fadell away from his role at the helm of Nest. The ripple effect of this could be far reaching and set the foundation for a more integrated home automation strategy for Alphabet.
Fadell co-founded Nest with Matt Rogers in 2011. The thermostat was a hit blending great design and technology with a consumer market hungry for sexy home automation products. The company made headlines again when Google/Alphabet purchased it in 2014 for $3.2 billion. Nest has continued to grow, adding and refining products and representing Alphabet as a flagship/gateway home automation product. The market is evolving rapidly and this change in leadership offers opportunities for Alphabet and their competition and raises a number of questions including: why now? and what’s next?
Time to Coordinate and Consolidate
Part of the answer to the ‘why now’ question may be that Fadell never planned to stay. Two years is a solid transition period – it has the ring of something written into a contract somewhere – and five years at the helm of a company may be enough for him to feel satisfied. Fadell certainly has the means, opportunity, and interest to continue doing the things he is passionate about and finds ‘disrupting’. From Alphabet’s perspective, they continue to draw on Fadell’s key strengths as an innovator and designer through his advisory role at the corporate Alphabet level. The move could be a step towards coordinating the integration of the fragmented behemoth that is their home automation and IoT strategy. There are a number of interesting and well- backed high potential projects in the labs and production channels – not the least of which is the newly announced Google Home product. As the market and competition heats up, Alphabet will need to focus on coordinating projects and resources to ensure they are responsive and leveraging all of their assets effectively.
Alphabet End Game
Reading more into the changes and beginning to look at the answer to the “what’s next” part of the equation, we can look at Marwan Fawaz, Nest’s new Chief Executive Officer. To me, he seems to be a good choice with a strategic Alphabet end game in mind. Although Fawaz may not be as well known or have the ‘star’ reputation of Fadell, he has a lot going for him. He has a history with Google having been part of the Motorola Mobility acquisition in 2011. His background as the CEO of Motorola Home with responsibility for set-top boxes and cable modems should also translate well. He is a known quantity with solid engineering and operations management experience. Fawaz will not only want to prove that he is a successful leader, he will be motivated to work together with his former Motorola colleagues and should help to drive integration with other Alphabet projects.
The Nest product lineup is solid and should continue to evolve (the next logical move would likely be to add some form of security devices or system) and will need to integrate more with the other Alphabet technologies to leverage the synergies. Alphabet has a great line-up of tools and technologies and a solid reputation as an innovator and market leader. I expect they will continue to push this space and I believe they have the solid technical expertise, leadership and drive necessary.
Do you agree or do you feel they are stumbling and need to course correct? We look forward to hearing your thoughts and comments!