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Google’s Nest acquisition was more disastrous than we thought

Published Jun 6th, 2016 5:45PM EDT
Google Nest Failure

On paper, Google’s 2014 acquisition of Nest had all the makings of a perfect marriage. Nest at the time was riding high on the popularity of its Nest Thermostat and was led by Tony Fadell, a former Apple executive credited with dreaming the iPod into existence. Google, meanwhile, was a gargantuan company with the requisite resources to help take Nest to the next level. At the time, it was widely believed that Nest’s Learning Thermostat and smart smoke detector were just the beginning of what promised to be a long line of ingenious products for the home.

In reality, Google’s marriage to Nest was nothing short of a disaster, ultimately culminating with Fadell recently announcing his plan to step down as the CEO of Nest. Over the past two months or so, we’ve seen a growing number of reports paint a grim picture of what life was like at Nest, from stereotypical corporate in-fighting to reports that engineers were extremely frustrated by Fadell’s managerial style.

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With Fadell’s now out the door, we’ve seen seen even more reports detailing what went wrong at Nest. Suffice it to say, the Nest/Google marriage was even more disastrous than we initially thought. According to a report from Ars Technica, Nest was given every avenue by which to succeed but still found no way to thrive under the search giant. Not only did the company see its employee count skyrocket from around 280 individuals to 1200, the report adds that Nest was given a “virtually unlimited budget.”

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.

What’s more, the report details how Nest was continuously working on new products that simply never saw the light of day, including an AI-powered standalone speaker similar to the recently unveiled Google Home. Another security-oriented product Nest had been working on for years was reportedly doomed from the start due to Fadell’s inability to delineate what the final design should look like and how it should operate.

Large corporate acquisitions that end in failure or disappointment is something we’ve certainly seen before, but what makes this particular story so fascinating is that it seemed like such a smart move at the time. In fact, one of the more common arguments made in the wake of the Nest acquisition was that it was a shame that Apple didn’t step up and bring Fadell back to 1 Infinite Loop.

Make sure to hit the source link below for the full rundown of what led to Nest’s arguable irrelevancy under Google/Alphabet’s umbrella.

Yoni Heisler Contributor

Yoni Heisler has been writing about Apple and the tech industry at large for over 15 years. A life long Mac user and Apple expert, his writing has appeared in Edible Apple, Network World, MacLife, Macworld UK, and TUAW. When not analyzing the latest happenings with Apple, Yoni enjoys catching Improv shows in Chicago, playing soccer, and cultivating new TV show addictions.