Google (NASDAQ: GOOG) is slowly taking over your life. It all started simply by changing the way you searched for information. From there the company started creeping into more of your life. It took over your favorite video channel. It's your default map. It also controls about half of the mobile phones in America. And soon, it hopes to control most, if not all of your home.
Building a nest right in your home
When Google announced that it was buying of Nest Labs for $3.2 billion, it marked the next step in its quest to marry technology with everyday life. Nest, which makes the self-programming Learning Thermostat as well as a smoke and carbon monoxide alarm called Protect, is an early creator of home automation products that are part of the growing field of the Internet of Things.
Its Learning Thermostat, for example, can self-program based on the lifestyle of the user. That saves consumers money because the temperature is adjusted for the nighttime or when the homeowner is away. Thanks to a simple Wi-Fi connection a homeowner can set or adjust the Learning Thermostat from a smart phone and even receive an up-to-date energy usage history.
That, however, is just the start. Google's Learning Thermostat is partnering with utility companies to save consumers even more money. With Rush Hour Rewards, for example, a consumer is paid to conserve energy during peak demand. In places where this is available, the thermostat will automatically pre-cool a house in advance of a hot day so that the utility won't need to produce as much energy during peak times. The user still remains in control and can override this feature, but would forfeit the payment in that case. That said, the demand response feature is just one of many ways the Internet of Things could change the way we live our lives.
The Internet of Things = The next big thing
Home automation, which is blending computer and information technology to control home appliances and features has explosive market potential. Many see it as the next evolution of the Internet where the world's devices are all connected and work together. Tech giants see a world with 31 billion web-connected devices by 2020. Because of this the home automation market alone could reach $48 billion by 2018 according to one market research firm. That however, is just the beginning.
While Google is taking one of the first major steps into homes, it's not the first company that's blending technology and home appliances. Several appliance manufacturers are building products designed to save consumers money by connecting to the Internet. Washers and dryers, for example, can now be equipped with a demand response technology so that these can be set to run when it's cheaper to do so. Together with other appliances, a future home could be so well connected that all appliances work together to achieve optimal performance at the lowest cost.
The potential for consumers is simply staggering. An article in the Wall Street Journal, for example, noted that the total economic impact from costs savings, improved productivity and other factors could hit $1.9 trillion dollars in the future. That's a lot of extra dollars to be gained from allowing companies like Google to have more control inside our homes.
The Internet of Things could really change the way we live our lives. Most of us don't even program our thermostats, which is why Google would like to take control of this and other appliances and gadgets as it looks to lead this emerging market. It's buying its way into the homes of Nest's customers and will likely continue to find new ways to either buy or build its way into the homes of more consumers. Given the cost savings and the improvements to the quality of life, that's not a bad thing.
Learn more about amazing potential of the Internet of Things
Matt DiLallo has no position in any stocks mentioned. The Motley Fool recommends Google. The Motley Fool owns shares of Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.