IoT Uncertainties Drive Search for New Partners

Don Dulchinos, president, Smart Home and Away, LLC

Don Dulchinos, president, Smart Home and Away, LLC

By Don Dulchinos

A big part of the mystery of IoT success or lack thereof so far is the emphasis on assembling partners rather than businesses.  Two developments in the last week underscore the continued dance and prospects for change, even as there appears to be a lull in actual product and service introduction since the hype of one or two years ago.

One involves the departure of Nest’s founder and chief executive Tony Fadell from the position he’s held since the Google takeover.  That People magazine kind of business story doesn’t interest me per se, but it had two interesting components.

The first was a comment from former Dropcam CEO Greg Duffy, who found the Nest exec hard to work with. That may have been, as founders often clash, but there was at least an initially successful integration.

I know it worked technically, because after my Nest Protect alarm sounded (due to a kitchen incident that I guess was a result of my poor cooking skills), I got a notice from Dropcam (now Nest Cam) that a video record of the incident was captured.  Well, not of my behavior in the kitchen, as I only have one Dropcam so far, but that’s okay.  But then the subsequent string of notices via app email was annoying, so the business/product integration perhaps was not as far along as the technical integration.

Indeed, the other primary acquisition by Nest in recent years, of Boulder-based Revolv, has not surfaced in the gossip – no comment on the Fadell story from Revolv CEO Tim Enwall, now head of new business for Nest – or in the integration.  The really nice Revolv app for presenting all IoT device interfaces in one place doesn’t seem to have been adopted (Nest has its own UI). Nor has Nest added many other Revolv partners like Sonos, Hue light bulbs, etc.

The other significant component of the story was Fadell’s replacement, former Motorola and cable executive Marwan Fawaz. Marwan (a friend from my CableLabs days when he was a leader among cable CTOs on the CableLabs’ technical advisory board) was former EVP strategy and CTO at Charter, a company that showed no interest in IoT in recent years (they’ve just absorbed Time Warner Cable’s security service, so we’ll see how that goes).  Marwan then was named CEO of the Motorola set-top spinoff from Google (after Google bought the Mot for its IP portfolio) and sold it off to ARRIS at probably a nice profit.

Since then, Marwan, among other activity, was an industry investor and then a Tech Advisory Board member at ADT.  So perhaps he’s desirable to Nest for having knowledge of two competing IoT business segments, although it’s hard to understand why neither cable nor ADT gave him a more prominent role.  Comcast continues to reference Xfinity Home in passing in Comcast commercials, but the consumer marketing at least to residential seems to have subsided from levels of a year or two ago.  Hard to say whether MVPD’s are disenchanted.

The second development of recent interest grew the partner landscape in the consumer IoT sector as start-up Notion gained an investment from Liberty Mutual.  The idea that IoT will reduce accidents and liability and thus improve profit margins seems good. Nest offers rebates from Liberty Mutual, but I already get a discount for having fire alarms in my home.  If Nest is such an improvement, why didn’t I get a bigger discount from my Nest/Dropcam tie-up than I did for those old, annoying chirping First Alert boat anchors?

So the partnerships are expanding, but is Nest just shuffling executives, or is an industry tie-up in the making?  Google has never wanted to be a “service provider” (low margins, lots of trucks). Maybe Marwan is interesting to them as an agent to find cross-industry synergy with Comcast or other service providers.

I argued more than a year ago that service provision expertise would be a key enabler of IoT success.  But the recent INTX cable convention had virtually no IoT presence, so it begs the question.

If the current dance partners aren’t working, maybe it’s time to change partners.