The Internet of (Google/Amazon) Things
More and more we see news of big companies turning towards the Internet of Things. The Internet of Things can be defined; as “sensors and actuators embedded in physical objects—from roadways to pacemakers—are linked through wired and wireless networks, often using the same Internet Protocol (IP) that connects the Internet” (McKinsey, 2010). Basically, advanced connectivity of all kinds of devices through the Internet. Amazon is rumoured to be expanding its research department Lab126 to further focus on developments around “home automation” (Reuters, 2014) and Google recently bought Nest for US$3.2 billion (the Wall Street Journal, 2014). So there is no denying that large parties are becoming more and more interested in home automation, or smart homes.
But why are companies like Google and Amazon the companies investing in this industry? As described in this article on Wired (2014), Google creates value from understanding consumers. Google is already well established in doing this while we are online, but not that much in our offline life. By using these Smart Home Appliances, Google could tap into a vast amount of additional knowledge about people’s daily behavior outside of the Internet. As Amazon has not yet released a product in this aspect yet, we can only speculate as to what they plan to release. However, keeping track of our “offline” lives could prove very valuable.
There are of course large privacy concerns involved in this. Nest has stated that customer information will not be shared outside of Nest, but anonymized data can still prove valuable for Google in some way.
Currently there are no definitive answers as to how these companies will use this technology to support their core business. What do you think? Will this really be the next big thing for Google and Amazon? How would you see the Internet of Things being used in Amazon’s business model?