Google buys two elements for its future network

Its Nest subsidiary pays $555m for Dropcam, filling out IoT stack, while Alpental brings 60GHz network expertise

By Caroline Gabriel

The latest additions to Google's technology stable highlight two key areas where the firm must defend its stranglehold over the web experience in future - the internet of things (IoT) and the high frequency world of '5G'. The search giant's Nest subsidiary has filled out its IoT stack with the purchase of home camera maker Dropcam, while Google has also acquired Alpental Technologies, which has developed a small cell solution for the 60GHz spectrum band, expected to be an important element of next generation access and backhaul networks.

The Dropcam deal, made under Nest's own auspices rather than directly by Google, is worth $555m. The firm's cameras can be checked from a mobile device anywhere in the world, and add a home security element to Nest's core gadgets, smart thermostats and smoke alarms.

"We care very deeply about helping people stay connected to their home, especially when they're not in their home," said Nest co-founder Matt Rogers. He said his company had been looking for a camera maker for months before the Google acquisition and approached five-year old Dropcam a month ago. The latter's CEO Greg Duffy wrote on a blog post: "Nest and Dropcam are kindred spirits. Both were born out of frustration with outdated, complicated products that do the opposite of making life better."

Behind the gushing words, there is the hand of Google, steadily building a complete smart home stack. It is very questionable whether the company really needs to own these gadgets - an approach more like Apple's HomeKit, building a broad platform around partners' products, would seem more in keeping with Google's open, software-driven philosophy and more suited to the diverse and unpredictable patterns of the IoT.

The fact that Nest is being kept so separate from the main Google structure perhaps indicates that Google, whose experiment with owning a mainstream handset maker failed, knows it has to be careful of alienating partners by making its own hardware - even as it fails to resist the charms of the integrated hardware/software model. So ironically enough, Apple is creating smart home and smart health platforms without, as yet, its own devices (though iWatches are on their way at last, supposedly), while Google is aiming for the full stack.

This will drive all kinds of advertising, big data and cloud services business opportunities in future, though the other reason to keep Nest separate is to allay some privacy concerns about how Google may use all that data from a connected home full of its gadgets. Nest insisted the acquisition was about extending its branded hardware offering, not about ads, and that Dropcam will operate under Nest's privacy policy, which bars data from being passed to the Google parent firm without a customer's permission.

Meanwhile, Google's second purchase - actually made in May, but just revealed - is very different. Seattle-based Alpental is led by two founders and former Clearwire engineers, CEO Pete Gelbman and Mike Hart. They have developed a system which they say lowers the cost level of 60GHz technology with a self-organizing, ultra-low power implementation. Gelbman describes it as a "hyper scalable millimeter wave networking solution for dense urban next-gen 5G & WiFi - at the form factor and cost of an iPod".

Overhype or not, these are words to hit many of Google's hot buttons. The company has spent a decade investing in wireless technologies which could help fulfil its aims of extending low cost internet access to the whole world, and making it easier for those with access to increase their usage - all in the interests of boosting Google's advertising and services revenues.

The company raised $850,000 in 2012 and delivered working prototypes and demonstrations at Mobile World Congress in February this year.

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