Nest Labs and Google: Crowd Sourced Data Surveillance?

Nest Labs

Nest Labs, Google’s recent $3.2 billion dollar investment into the “Internet of Things,” may be thinking about getting into the business of crowd sourced data surveillance. The company, founded in 2010 by Apple engineers Tony Fadell and Matt Rogers, made news headlines recently with their $555 million dollar purchase of Dropcam Inc., a manufacturer of in-home surveillance cameras that can be checked via smartphone. Nest Labs manufactures Wi-Fi capable, self-learning thermostats and smoke detection devices. With the purchase of Dropcam Inc., most financial analysts believe Nest Labs is looking to expand its in-home data points to video surveillance.

Recently, Forbes analyzed Google’s purchase of Nest Labs and questioned why the data giant would enter the home technology manufacturing business. Nest Labs was almost certainly overvalued when Google purchased it, according to Forbes technology writer Mark Rogowsky. The company is probably not moving as much stock as they claim, but the addition of a smoke-detector product line almost certainly increased Nest’s value. With the purchase of Nest Labs, Google’s strategy appears to be about building technology to connect the home to mobile devices, acquiring lots of data about energy use, and developing a business model to manage it remotely. However the strategy does not quite make sense to Forbes analysts. Google does not need to manufacture anything to make money in that new market. Moreover, the purchase of Dropcam Inc. puts Nest Labs in a market already highly saturated with smart video surveillance devices. Google is looking less like a data market innovator and more like a brick-and-mortar technology manufacturer.

Analysts of the large and competitive video surveillance technology market, however, point to recent trends in the security industry that suggest a possible market strategy option for Nest Labs more in line with the Google’s historical data collection strategies: crowd sourced data surveillance.

The best example of crowd sourced data surveillance, so far, was the FBI investigation into the Boston Marathon bombings in 2013 where investigators searched through thousands of leads provided by business video surveillance, audio, social media and smartphone video. The investigation made researchers aware of the huge amounts of data available to them and to the huge challenges correctly analyzing it. Employing the right analysis tools without employing thousands of investigators is currently the biggest challenge. The technology for crowd sourced data surveillance appears to be right up Nest Labs’ and Google’s alley.

If crowd sourced data surveillance is one of the new markets that Nest Labs and Google are eventually aiming for, it would almost certainly mean marketing a service outside Nest Labs current in-home data bundle of thermostat, video and smoke detectors. A new crowd source data surveillance service would target businesses and law enforcement agencies that need technology that could analyze a variety of incoming data correctly and more efficiently. The privacy challenges would be enormous, perhaps too much to consider, but the Boston Marathon bombing investigation proved that most people and businesses volunteered their own data in order to aid investigators.

The partnership of Nest Labs and Google has already raised many privacy concerns. The use of video surveillance in any data collection service by Nest Labs is almost certain to raise more. The market for crowd sourced data surveillance offers an intriguing possibility for Nest Labs and Google if they can figure out how to create a video data analysis service that doesn’t frighten everyone.

By Steve Killings

Wall Street Journal
System Security News

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