Nest Borrows From Phone Companies' Model to Find New Customers

Home Automation Company Won't Send Data to Google 'Ad Machine'

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Nest thermostat
Nest thermostat

Nest said Wednesday it has struck a deal providing new customers of the Electric Ireland power company with free smart thermostats and installation. Nest CEO Tony Fadell said he hopes that deal will be just the first in a series of arrangements akin to the free or discounted phones available when consumers sign up for a new wireless plan.

Nest, which Google bought early this year for $3.2 billion, is in the vanguard of the so-called internet of things, a near-future vision in which home heating systems will automatically warm the house before consumers get home from work and refrigerators will order more juice when shelves are looking bare.

But Nest also needs to capitalize on its position before competitors catch up. Already utilities such as Con Ed offer their own versions. Part of Nest's growth plans will depend on deals like the Electric Ireland partnership, which Mr. Fadell announced at the Web Summit in Dublin, a meeting of digital power brokers, entrepreneurs, startups and developers.

Nest also recently released a software update that uses data from the past three years to further improve its devices' efficiency, Mr. Fadell said. "We were able to eke out another 7% to 10% energy savings, and that's a free update," he said.

Asked whether consumers should be concerned about the amount of personal data rapidly accumulating in the hands of Nest and Google, Mr. Fadell said he has spoken about privacy with his new parent company. Nest products are invited into the home and will remain welcome by keeping data safe, he said.

"The data isn't going to flow over to the ad machine," he said, referring to Google.

While Nest is focused on in-home applications, Mr. Fadell said the next area ripe for technological disruption is outside the home. "I still think transportation is huge. ... Self-driving cars, partially-driving cars, assisted driving, Uber and Lyft, sharing things," he said.

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