Do you trust Nest?

Do you trust Nest?

By Joey Marquart and Michael McCullough

Google’s breathtaking $3.2B acquisition of Nest was a galvanizing moment for everyone in the cleantech sector. We are big business.

Ironically, the acquisition happened two weeks after the 60 Minutes cleantech segment, which was 2-3 years late with its proclamation that VCs are exiting an industry blemished by Solyndra and biofuels.

Of more interest, however, is the wave of privacy concerns that emerged from this news, which comes on the heels of the NSA, Target and Neiman Marcus privacy scandals. Many Nest customers and prospects are afraid Google will track their behaviors at home through smart thermostats and smoke detectors and share the data with third parties (like the NSA).

According to the Edelman Privacy Risk Index (ePRI), these problems are indicative of a larger issue in privacy – most companies don’t emphasize privacy as a corporate priority, they aren’t transparent about consumer information use nor do they have resources to tackle the issue.

Nest competitors, such as Control4, Honeywell, EcoFactor, ATC Industrial Group, AlertMe and Tendril, now have an opportunity to differentiate their approach to privacy, since they are not owned by an internet search and advertising company with access to such big, personal data. In fact, they might use the ePRI calculator to measure and prove their approach.

Nest itself is faced with building confidence in their assurances that Google will not be using its data.

The Trust Barometer, an annual survey that will be released January 22, provides advice on this exact issue:

  • Engage your customers directly in two-way dialogue
  • Be radically transparent
  • Work with NGOs that will hold you publicly accountable (in this case, the Electronic Frontier Foundation is a good start)

Nest has a potential forum for this dialogue on its blog and social channels. We expect they are moving quickly to address the product returns resulting from the acquisition and feedback like the statement from this Forbes contributor: “Now that Google owns Nest, I am less interested [in its thermostat] because I don’t trust Google.”

Ultimately, Google has been an amazing force for cleantech through its wind and solar projects , green data centers, and investments.

Its acquisition of Nest is a clear example of how technology companies see the opportunity to own part (or, in some cases, all) of the ratepayer/utility relationship.

Beyond the privacy issues, regulators themselves should be motivated by such developments to consider new thinking, allowing utilities to pursue new innovations at the risk of being squeezed out of new revenue streams.

As a consequence of energy industry digitzation, of course, the issue of securing consumer data is a rapidly growing concern. Energy players will increasingly find themselves on unfamiliar territory as they are thrown into the vortex of the NSA-Target-Neiman Marcus stories of 2014.

Knowing how to be courageous with new technology while engaging with transparency and accountability will make all the difference in this transformation.

Image Credit: TechCrunch