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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
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.
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
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.
They've been doing that for years
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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