Channel technologies

Nest CEO Resigns: Will Consumer IoT Ever Deliver?

Tony Fadell has resigned from Nest Labs, the consumer IoT business owned by Alphabet (parent of Google). Fadell's departure, which he announced in a blog post, comes after two years of alleged turmoil within Nest, a consumer-focused Internet of Things (IoT) business that some suggest hasn't lived up to the market hype.

Google officially acquired Nest for $3.2 billion in 2014. At the time, the IoT hype cycle was kicking into overdrive. From digital thermostats to Internet-enabled appliances, pundits predicted every "thing" in U.S. homes would become Internet-connected. But generally speaking, that bold vision has yet to materialize.

The quick timeline goes like this:

  • Nest moved out from under Google in 2015, when the overall company reorganized under the Alphabet umbrella. The goal was to help Alphabet accelerate next-generation businesses, including Nest.
  • But by February 2016, rumors about major morale and product problems within Nest surfaced. A Business Insider report revealed that some employees were fed up with long hours, alleged mismanagement and poor product execution.
  • By April 2016, Fadell visited sister company Google and sort of apologized for Nest missteps during a hands-on meeting, Re/code reported.

Nest: New Leadership, New Consumer IoT Opportunities?

Fast forward to present day and Fadell has resigned and will exit immediately. Marwan Fawaz -- a veteran of Charter, ADT and Motorola Home -- is joining Nest as the company’s new CEO.

Marwan Fawaz
Marwan Fawaz

In a blog, Fadell defended his track record while praising the overall Nest team -- saying that Nest revenue has grown in excess of 50% year-over-year and "today, millions of people in more than 190 countries use Nest products, which include hardware, software, services, and the Nest-backed Thread wireless protocol."

It's a safe bet Fadell will write additional chapters in his business career. His overall track record -- including key roles on the Apple iPod and iPhone teams -- is rather remarkable.

The bigger question involves the future of Nest and consumer IoT solutions -- and rival offerings like Apple HomeKit. While the industrial IoT market continues to grow, some critics openly wonder if the consumer IoT market is dead -- or at least severely damaged -- by overhyped products that often underperform.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.