Google + Next = IoT core

Like the `smart’ lightbulb that Fujitsu demonstrated last November, it is easy to dismiss Next’s `smart’ thermostat as, well, a `smart’ thermostat: one of those quirks of tech development that has people saying `cool’ and then getting on with the rest of their lives. It starts to become interesting, of course, when Google decides to buy the company for a seriously large $3.2 billion in cash.

And why on earth should Goggle want to spend such a vast amount on a thermostat company? Well the answer is because the thermostat, of itself, is absolutely irrelevant. What is important is what lies behind it, and the implications that this then points at.

What lies behind the thermostat is some clever software that has far, far wider applications potential than a mere thermostat. What Next has developed is some core technology that allows domestic appliances to program themselves, as well as then communicate and collaborate with smartphones and tablets.

This is, of course, all about the Internet of Things (IoT), and demonstrates that Google is now extremely serious about holding some of the key cards in the game of making IoT practical for a huge range of applications. On that basis, $3.2 billion may well prove to be a chicken-feed amount to have paid for a ready-made, tested and proven underlying technology that could well be the glue that is used by just about everything.

And while Next is focused on domestic applications, it is highly likely that the underlying technology will apply equally well to many industrial and commercial applications areas as well. It would certainly not be beyond reason to suggest that this is exactly how Google is thinking.

On top of that, it already has experience of how offering users a base level of technology onto which they can overlay their specific requirements quickly, and with a good degree of confidence and reliability, with Google Apps. From the point of view of any business looking to exploit IoT or offer new services built on it, having a known entity as the underlying technology will make their development task so much easier, and faster to implement.

Google could find itself at the heart of everything remotely based in or around IoT, which may or may not be a good thing, of course. Like IBM in mainframes and Microsoft on the desktop, it will certainly find itself loved and reviled in equal measure should that occur.

The potential however, could be enormous, as the sixth edition of IDATE’s M2M Market report, covering 2013-2017, reveals. The Machine-to-Machine (M2M) market finally taking off, according IDATE’s research, with growth of roughly 30 percent in volume and over 10 percent in revenue, with the market set to reach €40 billion in 2017.

This performance is being spurred by increased use within the main areas of application (automotive, consumer electronics and utilities) and is expected to accelerate even further over the next five years as M2M spreads to other sectors of activity.

Europe will be the biggest market in terms of revenue, ahead of North America, even if Asia-Pacific will continue to dominate in terms of volume. At the end of 2013, China rose to the number one spot in number of cellular M2M modules installed, overtaking the United States.

In practice, and as part of a wider IoT environment, M2M is likely to be considerably bigger than this by that time.

Google’s news has, of course, generated a fair bit of comment and speculation across the board, especially as the domestic IoT marketplace has already attracted other players. Most notable amonst these is Samsung, which announced a system that will link a household’s gadgets, appliances and utility controls to create a ‘smart home service’ at the recent Consumer Electronics Show in Las Vegas.

Pontus Noren, co-founder and director of Cloudreach, believes that these developments mark just the start of an era which will see major investment and innovation in IOT. But he also warns organisations that as a consequence, they must now also start to consider data utilisation as a serious tactical issue.

“The news that Google has purchased Nest Labs shows that 2014 is clearly going to be the year of IOT. Google, Samsung and other leading manufacturers are heavily investing in IOT in an effort to lead the market in connecting everyday items such as toothbrushes, fridges and cars through the cloud in increasingly intelligent ways.

“This is an exciting time in the tech space, but to remain competitive organisations will need to anticipate what IOT will bring in 2014 and how they can be ready.  The volume, variety and velocity of data can bring a whole new set of challenges when embarking on data-fuelled innovations.

“Cloud will be the binding factor that will underpin IOT. It’s no coincidence that Google, one of the biggest players in the cloud market, has entered the consumer electronics market with such a big leap. Companies looking to embrace IOT must engage with experts in data storage and utilisation early in the decision making process, to create a consolidated, elastic and centralised data landscape to support these innovations. Those who fail to see data utilisation as a serious tactical issue do so at their peril.”