Google’s ADT partnership turns the smart home into a service
Google has taken an investment stake in alarm company ADT as well as signed a deal to tie ADT’s installer network to the Google ecosystem of smart home products. The deal helps Google by bringing professional installers into the homes of consumers to resell and install Google’s products and also helps ADT by giving it a lower-cost security offering and an entre into a world of other smart home services.
The deal, announced Monday has Google taking a 6.6% stake in ADT, worth about $450 million. It also means 20,000 ADT installers will be trained on installing Nest products from the smoke alarms to the security systems. This last bit is relevant given that the idea of a do-it-for-me smart home could become a point of competitive differentiation between smart home systems going forward. ADT will start linking Google Home Mini, Nest Thermostat and Nest Wifi to its system this year and then will add others over time according to Reuters .
The new Nest Wifi router and Nest WiFi point, which doubles as a Google Assistant speaker. Image courtesy of Google. The rationale behind this deal ties to this idea that true smart home isn’t one that turns on your lights on command, but one that looks out for you in terms of security, energy consumption, air quality, and preventing catastrophic damage. We see companies such as Resideo and Comcast pushing this idea in their product and sales strategy. If Google gets on board with its “helpful home” branding, we could see a new era of services that appeal to the mass market as opposed to those of us who like to play.
ADT’s an excellent partner for this because its installers are employees as opposed to external dealers.
First, the use of professional installers is a great move to try to reduce the complexity associated with making your home smart. I used to spend hours installing devices, trying them to Amazon or Google or SmartThings, and then building routines. Maintaining them also takes patience, time, and a wee bit of expertise. Getting someone to put devices in the home and to set up some basic routines is an easy way to get consumers to buy into these products and to control their experience so it’s a positive one. This would give Google an advantage over Amazon’s Alexa (although you can hire someone to help) and SmartThings.
With ADT installers being employees of the company, Google and ADT don’t need to worry about cannibalizing a middle man network of dealers like the professional home automation companies do. The security company model has focused on selling customers gear that they then pay for over time as part of a monthly service contract. It will be worth looking at how Google structures sales of its Nest gear through this particular channel. The prices for Nest gear are fairly high, to begin with, so installers may not experience a loss on commissions if they focus on Nest over the original ADT hardware.
The Nest Guard security...