Nest Labs Acquisition of MyEnergy Makes Sense

As we wrote in the last post to this blog, merging tech businesses make sense when an acquirer looks to enter new markets. Nest Labs acquired MyEnergy in early May, 2013. This acquisition meets our criteria.

Back in December, 2012, we published a series of posts on the Smart Grid here in the United States on our Industrial-Strength-Ethernet blog. In April of this year we wrote of the Nest Labs Thermostat technology: ” . . . what we . . . find exciting about the [Nest Labs residential thermostat] is its apparent compatibility with most smart meter systems and, thereby, with the smart grid.”

But the thermostat did not have the hooks to the grid. On May 7, 2013 we interviewed Ms. Kate Brinks of Nest Labs. Ms. Brinks informed us ” [Nest Labs] is a consumer product company. We have things like the Zigbee chip built in. . . Just being forward thinking, we knew a lot of the Smart Grid uses Zigbee, and so we put that chip in there just to be ready for it, if the time came when our customers would want to do that [presumably, to connect a smart residential temperature control system, represented by the Nest Labs thermostat to the Smart Grid]”. Transparent bi-directional data communications from residences, back through the Nest Labs thermostat, and then up to an energy provider through the Smart Grid was not actually possible.

Until Nest Labs acquired the technology along with the other assets of MyEnergy. Merging the two technologies together makes Nest Labs technologies into a unique set of tools capable of bridging the divide between the Smart Grid and energy consumers otherwise created by the dumb or smart meter positioned between businesses, residences, and the energy distribution plant. We aren’t aware of another comparable technology.

So merging MyEnergy and Nest Labs into one business is a great example of a sensible technology acquisition, promising business expansion and very low internal levels of friction between Line of Business (LoB) units, if any at all.

If you’d like to read more of our chat with Ms. Brinks, please contact us.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved


The Learning Feature of the Nest Thermostat is Interesting, But the Zigbee Internals and Compatibility with Smart Meters is More Important

We just read an article, written by Nick Wingfield, Controlling the ‘Smart Home’ With Tablets and Smartphones. The article mentions a smart thermostat called the Nest.

Mr. Wingfield is impressed with the device’s learning capability. Use it for a week or two and the device will adjust temperature by itself, according to the pattern that you demonstrated over the learning period. The ability of this device to study a pattern of settings and then to replicate the pattern, unattended, is great, but not rocket science. This technology has been around for quite a while. We’ve seen different versions of it going back to the mid 1990s. You can see the technology at work on popular interactive web sites like Amazon dot com, Netflix, and more.

But what we do find exciting about the device is its apparent compatibility with most smart meter systems and, thereby, with the smart grid. As far back as October 25, 2011, Lynne Kiesling wrote a blog post titled Nest’s elegant learning thermostat — but is it transactive?. We agree with Lynne Kiesling. For, us the important point is whether the thermostat can communicate to a smart meter to turn down energy consumption for a specific location on the smart grid (the end point represented by the Nest owner’s home) when occupants are either working, sleeping, or have left the location for another reason. If the message to the smart meter is successful, then the home owner will save some precious cash.

Kiesling notes: “[b]ut even more importantly, Nest comes equipped with a Zigbee chip and wi-fi, so it will be a discoverable device on your home network, and able to communicate with a digital meter and other digital devices in the home”. It’s precisely the device’s ability to communicate with a digital meter that is of prime importance to us. Once the two way communication is established with the smart meter, which, in turn, communicates with an electric utility’s smart distribution network, then there is real potential to deliver value at a tangible, prominent level to the customer.

The Nest thermostat is an example of successful product marketing. The marketing communications campaign for the product speaks clearly to both the end customer and the technical audience more concerned with what’s on the backend of the product.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2013 All Rights Reserved