Let's get it out of the way right at the top: Google is a creepy company that's only getting creepier with its hideous camera glasses and driverless ghost cars. When a company puts "Don't be evil" right in its corporate motto and IPO prospectus, and treats it like some kind of badge of honor? That's creepy. I mean, I don't tell myself every morning, "Don't kill anyone today," make it my motto, and then brag about that.
OK, I admit it: I actually use a ton of Google products and tend to love them because they really do make my life more convenient. But it's a creepy exercise anytime you sit and think about all the data you just hand over to this face-cam-wearing company on a daily basis. So Google's $3.2 billion all-cash purchase of smart thermostat maker Nest is just one more chance to play the Scary Google game. But once all the jokes on Twitter die down, this is a super smart move on Google's part too.
Hardware is important
Google really isn't a hardware company, whereas Nest is all about great design. People like Nest because it really does nail the trifecta of software, hardware, and service. That killer hardware-software combo has really worked for Apple, although it still trails Google on the cloud-services side. Google rocks at software and services, so it needs that hardware mojo.
The Moto X is a great phone, and people like the Chromecast, but Android @ Home fizzled out—Lighting Science, the hardware company that was making compatible LED lightbulbs, has scrubbed any mention of Android @ Home from its site, and Google's own Nexus Q device had a rough "beta" debut and then never even made it to market.
The Internet of Things
Google also knows that you can't dominate the Internet of Things without things. Its Chromecast is a decent entry into the living room space, although a TV stick controlled by a smartphone does not a connected home make. The Nest's slick take on home automation is not only well executed, but also appeals to a wide section of users—no matter how much TV one watches, we all like to have heat.
The trend in the connected home space is integration. You no longer want a bunch of standalone devices that are controlled by a separate app for each device. You want an ecosystem of things that talk to each other and are controlled by a single app. Samsung Smart Home, and LG HomeChat, and the Revolv device that will connect up all your existing Internet of Things stuff—that's where we're headed.
Sign up for CIO Asia eNewsletters.