There's a shakeup at Nest today. Following previous rumors back in November, Google just announced Nest will no longer be a standalone Alphabet company; instead, it will merge with the Google hardware team. The current Nest CEO, Marwan Fawaz, will report to Google Hardware SVP Rick Osterloh.
Nest has struggled since it was purchased by Google/Alphabet in 2014. Under Google, Nest was given a huge influx of resources, which it used to quadruple its employee headcount and purchase Dropcam. But none of these extra resources resulted in new or improved products. Nest's CEO and co-founder, Tony Fadell, left the company two years after the acquisition, at which point Nest's only "new" product under Google was a rebranded Dropcam.
Once the current Nest CEO Marwan Fawaz took over, Nest finally started to push new products out the door. It launched the very expensive $300 Nest Cam IQ and the even more expensive Nest Secure home security system, which runs $500 for a starter pack. And their cost doesn't end there: both work best with a monthly subscription fee.
On the cheaper side of things, Nest launched the Nest Thermostat E, a plastic version of its famous thermostat. There are also plans for a "Nest Hello" doorbell sometime in 2018. Google's post mentions that Nest sold "more devices in 2017 than the previous two years combined."
Google's blog post says the merger will allow it to "combine hardware, software, and services" between the two companies, which are all "built with Google's artificial intelligence and the Assistant at the core." Nest and Google have been growing closer together even without this merger, with Nest getting a spot at the "Made By Google" Pixel 2 launch event to tout Nest and Google Assistant integration. An earlier report from The Wall Street Journal said that Google and Nest already combined their supply chain teams in 2016.
While Google has focused on making the "Google" brand well known in the hardware world with the Pixel phones and Google Home, CNET reports that Google won't be dumping the Nest brand.