Google will be the GE of the internet of things era

The Economist makes the case that Google is positioning itself to be an inventor and re-inventor of hardware. Google will also be the GE of the internet age.

The common factor shared by GE’s early products was electricity, something businesses were then just learning to exploit. With Google’s collection of hardware businesses, the common factor is data: gathering and crunching them, to make physical devices more intelligent.

Google bought Nest Labs, a maker of sophisticated thermostats and smoke detectors for $3.2 billion. This it Google’s second largest purchase after Motorola mobility.

Paul Saffo of Discern Analytics, a research firm, argues that Google is already adept at profiting from the data people generate in the form of search queries, e-mails and other things they enter into computers. It has been sucking in data from smartphones and tablet computers thanks to the success of Android, and apps such as Google Maps. To keep growing, and thus to justify its shares’ lofty price-earnings ratio of 33, it must find ever more devices to feed its hunger for data.

Packed with sensors and software that can, say, detect that the house is empty and turn down the heating, Nest’s connected thermostats generate plenty of data, which the firm captures. Tony Fadell, Nest’s boss, has often talked about how Nest is well-positioned to profit from “the internet of things”—a world in which all kinds of devices use a combination of software, sensors and wireless connectivity to talk to their owners and one another.

IF Google can merge and integrate all of its pieces
* Massive search and data capabilities (software massive scaling advantages and superior data centers)
* Vastly superior mapping and layers of location data
* robotics
* self driving cars
* smart homes, smart buildings via smart devices and sensors
* Android devices
* Google glass and other wearables

Google’s mapping could reach into all buildings via information from smart cars and devices in the home and buildings. Google just needs to manage the privacy issues but to provide you or your company the right information and control would be very powerful.

Robotics could really work well within the smart home and with self driving cars.

At least one Google executive has already made it clear that the company’s goal is to “put computing everywhere.” Google is pushing in the opposite direction of desktop replacement superphones: getting microprocessors into any place they might possibly be useful.

The Internet of things could be a trillion dollar market.

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