Hubs: The Key to Smart Homes and Their Domination by Google

Revolv a Nest company

Source: Revolv.com

A smart home hub — or at least the company who makes one — could be the key not only to the smart home, but to Google’s future dominance in it. As The Verge reported recently, Google’s Nest acquired Revolv, the maker of one of the most flexible smart home platforms on the market. The Revolv hub is able to connect devices made by different manufacturers and running on a variety of wireless protocols, from Zigbee and Z-Wave to Bluteooth and WiFi.

On its website, the Revolv team wrote, “Revolv is now a Nest company. We have been inspired by Nest since our foundation, and are thrilled to be part of the Nest family. Together, we’re going to create some amazing products and continue to unify the connected home as part of the Works with Nest program.”

The Works with Nest program is the company’s platform for collaborations with developers adding compatibility between their third-party devices and Nest. Along with Dropcam, which Nest acquired in June, Revolv will make the Nest ecosystem even more powerful, solidifying its pursuit of a position at the center of the smart home. As The Verge reports, the partnerships created through Works with Nest should increase in number and in capability.

The acquisition seems aimed at bringing the Revolv team and its expertise on with Nest. (And to refresh your memory, Nest was acquired by Google for $3.2 billion earlier this year.) Revolv’s service and support will continue to be available for existing customers, but Revolv won’t be made available to new customers. Revolv assured customers that, like Nest data, Revolv data will be kept separate from Google.

Re/Code notes that while the $300 Revolv hub functioned well, it seems to have achieved only modest sales. That’s likely because the smart home industry and the market for smart home hubs are both in their infancy. Any industry this early in its development can only attract so many early adopters, but the involvement of bigger and bigger tech companies is expected to get the ball rolling.

Matt Rogers, Nest’s co-founder and vice president of engineering, told Re/Code: “We are not fans of yet another hub that people should have to worry about. It’s a great team, an unbelievable team. There’s a certain amount of expertise in home wireless communications that doesn’t exist outside of these 10 people in the world.” Revolv was one of the first partners for Nest’s Works With Nest program, which it just announced five new partners for: Ivee, Life360, Pebble, SNUPI Technologies, and Rachio.

In the smart homes of the future, you’ll be able to set your thermostat, control your locks, and turn on the lights, all with your smartphone. But opening a different app to complete each of those tasks would quickly become cumbersome. So a smart home hub provides a way to unify all of those apps and devices into one easy-to-control whole.

While many companies want to create the devices — the thermostats, locks, lightbulbs, and more — that you’ll use in your smart home, others want to create the products that make the smart home a complete, connected, and smart whole. It’s those companies that are interested in smart home hubs, and Nest made it clear that it’s one of them with its acquisition of Revolv.

Buying Revolv and the team behind it puts Nest, the creator of the popular smart thermostat and smoke detector, in a strong position in both major categories of the smart home — the devices and the platform that unifies them.

But smart home hubs have a bigger problem to solve than simply enabling users to bypass the confusing array of apps that they’d otherwise need to control the smart devices in their homes. What makes these hubs, and the smart home, really take on a life of their own is a hub’s ability to enable devices to work together. While hubs work something like a router, connecting all smart home devices, they can also share information collected by one device with another.

As Fortune reports, the nascent smart home industry is still working to gain traction with homeowners. The largely unproven nature of technology and the relatively high cost of “building” a smart home are two significant barriers to entry. But IHS projects that the market will grow to 44.6 million devices installed by 2018 — an estimate that illustrates the industry’s expectations for a huge potential market.

While there may not yet be a large market for smart home hubs, there certainly is a market for the companies that make them. Over the summer, Samsung acquired SmartThings, another smart home hub maker, as Tech Cheat Sheet reported at the time. (Though an assortment of other companies make smart home hubs, SmartThings was regarded as Revolv’s primary competitor in the space.) In September, Logitech released its Harmony line, which includes a hub to link smart home devices, plus a remote control that can be used instead of a smartphone.

A variety of other companies manufacture smart hubs with varying capabilities; Insteon, Lowe’s Iris, and the Wink hub are a few names that come to mind. As Fortune points out, at any given time, there’s an assortment of smart home hub-building startups conducting crowdfunding campaigns at Kickstarter or Indiegogo, hoping to either raise enough funds to produce their product, or to attract the attention of one of the large tech companies that may be in the market for an acquisition.

While most people prefer not to think about the prospect of inviting Google, the Internet search giant, into their homes, smart or not, Revolv makes a point of noting that its data, and all Nest data, remains separate from the data that Google collects on its users on a daily basis. But on Google’s part, it’s hoping that the independently-run Nest will be a strong competitor against not only the variety of specialized companies selling smart home devices and hubs, but against the ecosystems created by Apple’s HomeKit and a Samsung/SmartThings collaboration, whenever they have a product to offer to the public.

Aaron Tilley wrote for Forbes that Revolv cofounder Mike Soucie told him in July, “Nobody right now is making money at the hub level. There’s a lot of betting on the long-term future and willingness to take losses. That’s where the market is–placing bets on the future.” Even if there isn’t another Revolv-branded hub, it seems inevitable that with Revolv’s help, Nest will continue to grow in the direction of connecting as many smart home devices as it can, helping Nest to take the lead in the developing smart home market.

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