Analyzing Nest’s $555M Acquisition of Dropcam

Nest has announced that it will acquire Dropcam for $555 million and hints at a hardwired security device.

Nest Labs, acquired recently by Google for $3.2 billion, is spending $555 million to acquire Dropcam, maker of DIY cloud-enabled surveillance cameras.

I had the opportunity last week to serve on a panel discussion with Maxime Veron, director of product marketing for Nest, at an event sponsored by Harvard’s Joint Center for Housing Studies.

I asked him about that “ZigBee radio” in the Nest thermostats that we discovered a couple of years ago.

He told me that, while the chip includes the same 802.15.4 radio used by ZigBee, in fact Nest is using something more like the low-power IP protocol 6LoWPAN with a proprietary layer called Nest Weave.

The technology allows communications among Nest devices even if the home network or Internet access is down.

So, for example, if the smoke/CO detector trips, then the HVAC system will shut down.

What Can Dropcam Add?

So now comes the question of Dropcam. What can the IP cameras add to the ecosystem? The products are sold for $150 and $200 with an optional $99 or $299/year service fee for cloud recording.

For those who subscribe to the cloud service, Dropcam offers some pretty sophisticated analytics that can, for example, distinguish pets from people or detect the opening and closing of doors.

It would not be a stretch for Dropcam to develop algorithms that detect smoke or fire before the warnings hit traditional detectors.

Of course, we could easily imagine that a Dropcam with Nest Weave could be triggered to record when the Nest Protect goes off.

More interestingly, the camera maker recently announced Dropcam Tabs, little sensors that can be affixed to doors, windows, washing machines (to detect the end of a cycle), valuables like computers and TVs, and anything else that moves.

Using Bluetooth Smart (Bluetooth Low Energy, or BLE), the sensors communicate with the camera to indicate activity or non-activity, and the information is relayed through the cloud (for users with the optional service) via email or text.

I’m guessing Nest will add Weave to Dropcam cameras and Tabs, further adding to its inter-communicating ecosystem.

Now, consider that Nest’s mission is to be the purveyor of the “conscious home,” as Veron noted during the JCHS panel discussion, then you can imagine what the camera and sensors can add to Nest.

The big problem today with the Nest thermostat and smoke detector is that they only provide a handful of “learning” points.

With Dropcam video analytics and Tabs sensors, Nest will be able to add multiple points for learning the habits of occupants and their property.

Surely some lighting controls are not far behind.

Coming Soon: Wired Security Solution

Thanks to a tip from Forbes, we have learned that Nest is coming out with a solution that integrates Nest Protect with traditional hardwired security (no word on the thermostat).

The Nest Website notes:

Can they work with my security system? A new Nest Protect that works with wired security systems is already on its way.

The “Learn More” link goes to a dead page.

I assume the product is an adapter with the 802.15.4 Weave protocol and a relay to trigger the security system which, in turn would transmit the alarm to a central monitoring station.
If that’s the case, then the device could easily be used to trigger other activities via the security or home automation system or anything with a relay.

Furthermore, as jurisdictions increasingly are demanding verified alarms before dispatching emergency services, we could imagine how Dropcam might be used by the monitoring station as that video verification.

Stay tuned!

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About the Author


Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration.

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