A Potential Partnership Could Finally Take Nest Sales To The Next Level

Nest thermostatNestGoogle paid $US3.2 billion to acquire Nest in January.

When Google acquired Nest for $US3.2 billion in January, some critics argued it hugely overpaid for the smart thermostat and smoke detector company. 

Nest was estimated to be making $US300 million a year in sales, which means Google had paid a staggering 10X revenue to buy the scrappy startup.

It’s probably too early to say whether the price tag was too high or not — the deal was always about the next ten years — but there’s good news for now: Nest may be close to finding a partner that could significantly boost its sales.

According to Forbes, Nest is in early talks with ADT, the world’s largest home security firm, to partner for future products. Under the partnership, Nest’s wifi-connected thermostats and smoke alarms will connect with ADT’s Pulse platform, its mobile security and management system. It will also connect Nest with ADT’s massive call center infrastructure, the report says.

The most important part of this deal would be ADT’s huge footprint in the global security monitoring market. ADT currently has seven million customers, across 50 countries worldwide, and two million commercial enterprise clients, including over 300 airports and shipping hubs. This partnership will allow Nest to reach a much bigger market without the need to implement all the complicated enterprise sales and marketing tactics.

“What they love is ADT’s seven million customers, 4,000 sales representatives and the relationships we have with fire departments and other emergency services, so that when there is an alarm we can dispatch the right people,” ADT’s CEO Naren Gursahaney told Forbes.

The timing of this deal would be perfect, too. According to BI Intelligence, the smart thermostat and other connected-home device market is going to see its growth slow down next year. In fact, Nest has some of the worst reviews from individual consumers on Amazon.

Still, it’s too early to get excited about this partnership. These deals usually take a long time to finalise and it could get really complicated if more terms get involved. But it seems like both companies really want this deal, as Gursahaney told Forbes, “We’re working feverishly to develop the partnership.”

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