Google’s Nest Labs Joins Race to Define Platform for the Internet of Things

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Nest Labs on Tuesday is expected to announce a strategy to build a software platform to connect home devices as part of the Internet of Things.Credit

Google did not pay $3.2 billion for Nest Labs this year just because it designed a smart thermostat that has redefined that humble household device.

No, Google also bought into the vision of Nest’s founders, Tony Fadell and Matt Rogers, a pair of prominent Apple alumni, that the Nest thermostat is one step toward what they call the conscious home. That means a home brimming with artificial intelligence, whose devices learn about and adapt to its human occupants, for greater energy savings, convenience and security.

Last Friday, Nest moved to broaden its reach in the home, buying a fast-growing maker of Internet-connected video cameras, DropCam, for $555 million. And on Tuesday, Nest is expected to announce a software strategy backed by manufacturing partners and a venture fund from Google Ventures and Kleiner Perkins Caufield & Byers.

Nest’s is the third high-profile announcement this month about software to link devices in the home in a network known as the consumer Internet of Things. At its Worldwide Developers Conference this month, Apple introduced HomeKit, its technology for linking and controlling smart home devices. HomeKit uses the iOS operating system, the software engine of iPhones and iPads.

Quirky, a start-up that manufactures and sells products based on crowdsourced ideas, on Monday announced the creation of a separate software company, Wink. Its initiative has attracted the backing of a major retailer, Home Depot, and manufacturers like General Electric, Honeywell and Philips.

All three projects are efforts to create software platforms for the Internet of Things. The concept of a platform relies on a virtuous cycle: The more people use your technology, the more likely other people are to use it. Economists call this a network effect. The most common example in technology is the computer operating system, which has gone from the IBM OS/360 to Windows to iOS to Android.

But a software platform doesn’t have to be an operating system. It can be any software that attracts a following of developers who write applications that link to it or work with it. The company behind a successful platform creates a technological and business ecosystem and reaps the benefits through increased sales of software or hardware.

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“You build great products, and through that a platform emerges,” said Matt Rogers, a co-founder of Nest Labs.Credit

The Nest plan reflects its corporate ethos: “You build great products, and through that a platform emerges,” Mr. Rogers, vice president for engineering, said in an interview. “No one wants to buy a platform. People buy products. You need critical mass.”

Nest’s eight early partners include Whirlpool, Jawbone and Mercedes-Benz. Brett Dibkey, a vice president who oversees Whirlpool’s smart-home efforts, said his company and Nest had a similar philosophy. The emphasis, he said, was on “consumer-relevant, purposeful innovation.”

Whirlpool and Nest, Mr. Dibkey said, have worked together for more than year to develop a few applications. One allows a Whirlpool clothes dryer and a Nest thermostat to work together to conserve energy and save money. The thermostat detects a local utility’s peak load times, when electricity is most expensive. It sends a signal to the dryer to run on a cooler, slower drying cycle at those times.

In a Jawbone application, the company’s activity-monitoring wristband detects when a person gets up on a winter morning. It then sends a message to the Nest thermostat, telling it to heat up the house, said Jim Godfrey, Jawbone’s director of communications.

Nest opened up one site for developers and one for consumers that explains how other products work with Nest.

Nest’s Internet of Things strategy will be backed by the Thoughtful Things Fund, a venture capital fund created by Google Ventures and Kleiner Perkins. The fund is intended to help developers who make Nest applications get their projects up and running. The Thoughtful Things Fund is similar to other venture funds established to support smartphone and tablet software developers.

“For a small company,” Mr. Rogers observed, “it’s really tough.”