Why Google’s $3.2B purchase of Nest is a game-changer for property

Earlier this week, Californian technology giant Google announced that it is acquiring household hardware manufacturer

Nest for US$3.2 billion in cash. Whilst the news of a billion dollar acquisition by Google is not uncommon, this particular play marks the company’s first major foray into the built environment.

Nest, created by former Apple executive Tony Fadell, has grown rapidly since launching in 2011. The company designs and manufactures a line of products for the home, including a thermostat and smoke detector that fuses cutting-edge technology with modern software and contemporary design.

So why is this a game-changer?
Well, let’s understand what is actually happening from the perspective of technology.

Over the last decade, we have witnessed the fastest and most dramatic change in technological innovation in human history. To put this in perspective, only ten years ago I was rolling around with a

Nokia 8210 addicted to its built-in game,

Snake.

The concept of a single hand-held mobile phone with access to the internet, gigabytes of storage for my music and photos and a high-definition camera and video camera all sounded like a dream come true, albeit a distant dream. Since then, we have been unified as a social cohort through the likes of Facebook, Twitter and LinkedIn; and the world has never been the same.

Technology has not only become ubiquitous, it has also extended deeper into our lives than we ever expected. The speed of technological innovation is also accelerating faster than even the most bullish predictions.

So what happens next?
According to many tech experts, the next evolution of this technological trend is known as ‘

the internet of things’ – the concept that everything around us will be (already is?) connected to the internet.

Currently, there are more ‘things’ connected to the internet than there are people on the planet – over 15 billion devices by 2013 alone.

Cisco’s Internet Business Solutions Group (IBSG) predicts some 25 billion devices will be connected by 2015, and 50 billion by 2020.

In a recent speech, Cisco chief executive John Chambers predicted the Internet of Things would evolve into a $19 trillion market over the next several years.

These ‘things’ range from smartphones, alarm clocks and coffee machines to cars, cattle (yep! – see

infographic) and, you guessed it, thermostats, fire alarms, refrigerators, security systems, lighting, air-conditioning  and televisions.

It’s no surprise that Google would ultimately move into the built environment given the search engine giant’s unrivalled technological capabilities. And Nest is a likely and obvious fit.

According to Fast Company, Nest is better positioned than any of its competitors to take advantage of Google’s capabilities by creating an operating system for the connected home.

In a recent blog post, Nest founder Tony Fadell shared his thoughts:

“From the beginning, our vision was to create a conscious home. A home that is more thoughtful, intuitive--and nice to look at. No one had cracked the code and we were confident we could do it with the right product, the right team, and focus. Google will help us fully realize our vision of the conscious home and allow us to change the world faster than we ever could if we continued to go it alone."
No one really knows how this next phase of technological innovation will influence the way we develop the built environment, but what we do know is that change will become as constant as it is unpredictable.

Adam Di Marco is a Development Manager for an ASX-listed property and construction company responsible for built-form residential and mixed-use urban renewal projects.