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Google's Business Plan For Nest: Selling Your Data To Utility Companies
jfruh (300774) writes "Google spent $3.2 billion on Nest. How is it going to make its money back selling high-end electronic thermostats at $250 a pop? Well, keep in mind that Google is a company that makes its money off information, not hardware. In fact, Nest is developing a healthy revenue stream in which it sells aggregated user information to utility companies, to help them more efficiently plan their electricity-generation scheduling. The subscriptions net Google somewhere in the range of $40 per user per year."
The power company already knows how much I use and when. In fact they send me this energy statement saying I'm using 10% more than my neighbors.
Slashdot's rate-of-post filter: Preventing you from posting too many great ideas at once.
Remember, with Google, you - and what you do online - are their product. That information, and your "eyeballs" are what they sell. Expect them to behave accordingly.
this is horrible, imagine if they could build out for peak capacity in the right locations for the right times so there wouldn't be anymore rolling blackouts in july and august
Google is a one trick pony. From robot cars to balloon-based internet access to Android OS, they still only have one business model: selling advertisements. 96% of Google revenue is generated via advertising channels. Take away the advertising and Google as we know it is gone.
this is horrible, imagine if they could build out for peak capacity in the right locations for the right times so there wouldn't be anymore rolling blackouts in july and august
presumably the next step is for the power companies to control your thermostat to cut back your A/C during peak times.
I bet traditional power company metering could already tell what hours of the day and which days of the week I am usually at home. What could Nest tell them that they don't already know?
I'm a good cook. I'm a fantastic eater. - Steven Brust
Or is there a way to prevent it from phoning home? I'm interested in getting one, I just don't feel like feeding more information to Google than I have to.
This could actually provide very valuable information for energy companies. Like the kind that could genuinely make life better for middle class people trying to save a buck and the environment. They already know how much power you consume, and send people around to read your meters.
Google should secure it with a nice read-only api and should offer to install one at your house if you agree to give them the data from it for ~5 years.
It appears you are running a marijuana grow op. Do you want to:
( ) Hire an attorney
( ) Locate nearby vendors of weapons and security systems
( ) Find out about hydroponic equipment and cultivation techniques
Oh, no! You have walked into the slavering fangs of a lurking grue!
In fact the meter is a far more accurate measure than the thermostat ever could be. It only controls one appliance in a household, and you have no idea what kind of appliance they are actually hooked up to. It could be super efficient, or an old clunker... gas or electric...geothermal? There has to be more to this.
Of course Google was going to do this. That's why there was a whole bunch of red flags raised when the acquisition was announced. We should all be more privacy conscious and it's not like there are alternative's to the Nest gear. I was about ready to pull the trigger in January for three Nest T-Stats but after hearing that Google was buying them, I changed over to Cyberstats instead.
Harrison's Postulate - "For every action there is an equal and opposite criticism"
My low end programable does everything that I want it to do and it does not report on me. Paid for itself in the first two months that I had it too. ROI on a NEST would take years, not even sure if it ever would.
Passionately Indifferent
Only the latest smart meters can capture data down to hour-resolution. Traditional meters cannot capture that level of detail unless a meter reader is standing there typing numbers in. Large scale deployment of smart meters costs millions in labor and infrastructure, so this type of device from Nest could be extremely useful for both consumers and producers, at a lower cost than the alternatives.
Does the Nest still work if it can't access the internet? Seems like a no-brainer to just configure your router so that it can't communicate outside your LAN.
I hope the Nest Thermostat is better than the Nest Protect Smoke Detector. Those gave me a case of serious "early adopter burn".
The Nest Protect detectors have the tendency to generate false alarms in clean air (no smoke, no dust, no steam) and are very hard to disable (get a ladder, dismount, get a screw driver, open device, remove battery). The idea of disabling a false alarm by WIFI has not occurred to them yet :-(.
NEST's generate a lot of heat that make them keep the house colder than actually set, they cause you to use more power in summer and warm climates. Have they pushed out a firmware that fixes this major flaw with the devices?
Do not look at laser with remaining good eye.
The single biggest thing that power companies worry about is demand. Long term, short term. They worry about it second by second, millisecond by millisecond even. If someone has a better short term model they can make money.
This is why power companies worry about the weather so much. It has very little to do with the sun or the wind. Who cares if you're a coal/natural gas plant?!?
Except you do. The generators all have consents that say that the can only take a certain amount of water from the river for cooling, and they can only raise the temperature of the river a certain amount. That means the temperature of the water (and air) are very important. There is a direct correlation between weather and the amount of power they can generate.
Add to that demand prediction. Sure, they've got a model, and smart meters tell them when you are likely to use power (based on previous patterns). However, Nest's data will tell them when you are going to use power. 100%. Even better, Nest is able to _delay_ that power use, or shift it to when it is cheaper. It will even result in a more stable grid, since that data feed will allow the generator to know when there's about to be a brownout.
New Zealand already does this with "ripple control" on water heaters. Suppliers turn water heaters OFF at the meter when power prices get to high.
This is not about snooping on what you do (the power companies already know), it's about the grid itself.
I bet traditional power company metering could already tell what hours of the day and which days of the week I am usually at home. What could Nest tell them that they don't already know?
I assume that they have some interest in how much of your use is heating/cooling related vs associated with other purposes. Thermal management, especially cooling, tends to be both a big item, and the one that shows nasty seasonal and sometimes just unpredictable variations. It's also the one that probably has the most 'slack', either in providing people with some incentive to relax their targets by a few degrees or to include various thermal energy storage mechanisms in new builds and renovations of existing HVAC systems that can be used for peak shaving.
People don't much like brownouts; but they are suspected of being more tolerant of modest thermal excursions, given sufficient motivation, so getting the breakdown would be of use. I'm surprised that it's $40/year worth of use, though.
At first I thought they were interested in knowing what your thermostat is set and how well insulated the house is to changes in temperature, but they could have done that with a web-form and a letter to customers.
Then I thought they just want the data sooner, meaning they want to know when your heat or AC will turn on so they can adjust their feeds before the appliances start to draw the power but then I realized they already know that on an aggregated basis in their grid software (at power exchanges and such) and can use statistics to work out time of day or regional differences.
Now, I just think it's a fad they are buying into to see if it actually helps them and in several years they will stop looking at the data because they already had it in other forms or could get it cheaper than $40 a customer elsewhere.
I suppose if you tie energy usage to thermostat settings you could get a decent picture of insulation and heating/ac efficiency of the structure. Then the power company could make useful suggestions on how best to reduce your bill.
I'm a good cook. I'm a fantastic eater. - Steven Brust
I thought the point of Google buying Nest, was that so they could analyse your behaviour, and then figure out when to serve you ads for pizza.
The story is that the Nest company created relationships with Power companies to sell your data. Google acquired Nest and all of its business practices. Google is not in the game of selling your information to other companies. Google normally keeps that information in house and sells advertisements associated. They historically have not sold information wholesale to other companies.
The most important part of Nest's utility-based revenue model (which predates the Google acquisition, BTW) isn't the data that flows from Nest to the utilities, it's the command signals that flow the other direction, enabling the power company to adjust your thermostat in order to reduce the demand from peak AC utilization, in a way that isn't likely to bother you.
The basic idea is that the utility company can tell Nest that peak usage is between, say, 4 and 6 PM. Nest can then tell the thermostats to turn the AC on from 3 to 4 PM, to pre-cool your house and keep your AC from running during the peak hours. The details depend on your desired temperature ranges, what your thermostat learns about the thermal characteristics of your house, predicted external temperatures, etc. Nest can also try turning your thermostat temperature up a bit to see if maybe you are willing to put up with a little higher temperatures... and the device can learn whether or not that's the case based on whether you manually bump it back down.
Utilities are willing to pay quite a lot of money to Nest for the ability to better spread and manage their loads. That is the main reason they pay Nest, not for the usage data... and according to some articles I've read, Nest generates more profit from the utilities than it does from selling devices. Consumers generally save money by reduced overall consumption as well.
http://techcrunch.com/2014/04/18/nest-uses-its-data-to-turn-electric-utilities-into-cash-cows/
I can see Google integrating the thermostats with other information to make this even more effective. For example, suppose information about your location (from your phone) were used by your thermostat to determine when you head home from work. If you're working late and no one else is home, there's no reason to kick on the AC until you actually leave the office. They could add in information from your calendar as well, to allow thermostat to potentially predict that you won't be going home at 4 PM because you have a 5 PM meeting, even though you normally do go home at 4.
I expect integration with Google Now as well; imagine a Google Now card that tells you your home's current temperature or one that warns you when your energy usage is higher than normal, so your monthly utility bill will be higher. Perhaps you could be notified that your utility company will give you a couple of bucks if you're willing to turn your thermostat up a few degrees today, and given the opportunity to say "yes" or "no" on the spot.
(Disclaimer: I work for Google but the above speculation about what Google may do is just my personal speculation about what's possible.)
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I have a real concern here. What gives Google the right to sell my usage???? I bought the device,I pay for the utilities it uses.I pay for i guess it connects to the internet so they are using MY internet bandwidth. I read the article its barren of facts about the devise and what i actually does. I believe this is a true wiretap problem Google gets 40 bucks a yr but all i get is the use of the device which i have already paid for. I really don't think google has any right to sell my home usage data and not give ME more then half of the 40 bucks. Am i wrong in my thinking here?? i don't believe so Google is getting 40 a year and paid nothing of the expenses to make the data.I think Google is way over stepping the privacy boundaries here
Jack of all trades,master of none
But they don't specifically know how much energy goes into heating and AC, vs. other household uses.
My furnace is gas and my AC is electric. All other sources of electric and gas are fairly consistent from month to month. My furnace accounts for the vast majority of seasonal variation in my heating bill and AC the same for my electric bill. So yeah, my electric company knows what I use for heating and AC vs everything else. Nest might give them a slightly more accurate picture but not that much.
Information about when you are home and not home can be sold too.
really dr. truth? tell me more.
yes, the inevitable post that thinks it's going to shatter our perceptions of google. OMFG they aren't developing and hosting all those services out of the goodness of their kind hearts?
remember, we KNOW how they make money. we get it. some of us choose to continue to use them, some don't, but we all understand.
I'm waiting .....
Have gnu, will travel.
You are not thinking far enough.
Smart meters and thermometers could allow smarter uses of electricity, e.g., at peak times, if your temperature is only marginally above the set temperature, your AC could be switched off automatically. If you are way above the set temperature, the utility would let you keep using your AC until it comes down to a comfortable temperature.
You could even have peak pricing, and maybe you could instruct your AC to only turn on when the price per unit of electricity is below a certain level, unless your house is too hot.
This could be preferable to building excess capacity which will hit your bills, even when you are not using it.
I believe in the internet of things. I believe that the world can become much smarter and planning can be done much better and resources used in ways they will be most effective far easier if better information from the ground is available. The only reason I worry about such information is because of certain bad players, especially government ones, that tend to great abuse it and criminalize whatever they wish. Accelerating change makes vast information flows from everywhere pretty nigh inevitable. What we need is to so limit government especially as to not put ourselves in deep jeopardy from it. And yes we also need rational laws to keep business and others from abusing it as well.