Google’s $3.2 billion acquisition of Nest could herald a new wave of interest in companies sitting at the intersection of data, services, and energy for the home and for businesses – or the beginning of the end for earlier-stage competitors.
One investor with deep exposure to the cleantech industry said the buy was good for the overall market, while a technology-focused venture investor said Google’s acquisition anoints Nest the clear winner – and winner takes all.
So who should be worried (or elated)?
Some start-ups that could find themselves under the shadow of Google’s Nest include:
Like Nest, Opower tackles energy management and was backed by Kleiner Perkins Caufield & Byers. Unlike the hardware company, Opower has raised $65.7 million in financing to develop software that it sells to utilities to monitor how much energy consumers use and provide incentives to lower consumption. Among Opower’s other investors are New Enterprise Associates and Accel Partners.
Another software developer for energy management is EcoFactor, which, like Nest, has the benefit of a large, publicly traded backer. While Nest had Google, EcoFactor has NRG Energy, the power company whose plants provide 47 gigawatts of generation capacity and whose retail arms serve 2 million customers in 16 states. EcoFactor raised its first capital from RockPort Capital Partners, which, along with Aster Capital and Claremont Creek Ventures, who came in to the company’s Series A round, remain investors. To date, the company has raised $27.4 million.
With $111 million in the bank, Tendril may be the best financed of all of the potential competitors for Nest’s nest in the consumer home. Like its other peers, Tendril sells utilities a software package for consumers to set efficiency goals and for utilities to improve customer service operations. The company’s business was persuasive enough to attract Good Energies, RRE Ventures, Siemens Venture Capital, VantagePoint Capital Partners, and Vista Ventures.
A subsidiary of the private equity-baked Alarm.com, EnergyHub is one piece of Alarm.com’s play that could knock out Nest. It’s products also include video monitors, garage door controls, connection to security alarms, as well as EnergyHub’s energy management software. Technology Crossover Ventures invested in the $136 million financing, which closed July 2012.
The $7.2 million-backed Canadian smart thermostat developer Energate raised its cash from local investors The Ontario Capital Growth and Cycle Capital in 2010. From its base in Ottawa, Canada the manufacturer of thermostats, energy displays, load switches, and peripherals has expanded with sales offices in California and Texas, according to information on CrunchBase.
If Google were to decide to move its Nest across the pond, it might set off alarm bells for the UK-based energy management company, AlertMe. Another horse in the Good Energies stable of energy efficiency-focused companies, AlertMe also counts the utility British Gas among its investors and strategic partners.
It’s not just startups that have something to fear from a bigger Nest.
Two years ago the building systems management and industrial manufacturing giant, Honeywell International, slapped Nest with a patent infringement lawsuit. Building automation is an industry that multi-billion dollar companies like Honeywell, Johnson Controls, and Schneider Electric consider extremely important – according to a study by Transparency Market Research it could be up to $16.4 billion by 2019, up from $3.6 billion in 2012.
The Google acquisition of Nest means that these giants also could face a new, infinitely deep-pocketed source of competition.
Image via Nest
Article courtesy of TechCrunch
Microsoft CEO Steve Ballmer was not forced out of his role at the company, but its board did hasten his exit, according to a report in the Wall Street Journal, whose sources include Ballmer himself, as well as a number of his lieutenants.
Ballmer’s exit was not a firing over the painful reported a $900 million charge related to the Surface tablet line that was recorded earlier this year. That’s a polite way of saying that Microsoft grossly overestimated demand for its new devices and lost a bundle in the process.
The Journal reports that in January, Ballmer’s plan to rebuild Microsoft was put under pressure by the company’s board. They wanted faster motion. The CEO is quoted as saying that he had not wanted to shake up the company until after Windows 8 shipped. That jives with the stated timeline: Windows 8 shipped in Q4 2012; in Q1 2013, the board turned up the heat.
Ballmer continued his work on revamping Microsoft, a company that has been alive for nearly 39 years. In May, he decided to it was time to go. The Journal has the scene:
His personal turning point came on a London street. Winding down from a run one morning during a May trip, he had a few minutes to stroll, some rare spare time for recent months. For the first time, he began thinking Microsoft might change faster without him.
“At the end of the day, we need to break a pattern,” he says. “Face it: I’m a pattern.” [...] On a plane from Europe in late May, he told Microsoft General Counsel Brad Smith that it “might be the time for me to go.” The next day, Mr. Ballmer called Mr. Thompson, with the same message.
The re-org kicked off in July. Ballmer and the company publicly announced that the CEO would depart within a year in August. The era of Ballmer was coming to a close. In the end, the board was key in accelerating Ballmer’s departure, but he was not, it appears, fired due to any single issue.
When Ballmer did announce that he was leaving Microsoft, there was a good deal of something close to schadenfreude in the media and technology worlds. It was an interesting time.
Ballmer was an imperfect CEO, but his final years will be considered his legacy, and I think that the changes he made to the company that he viscerally loves will bear out as generally correct. He initiated a new business model, began to reform key product lines to protect revenue streams and meet market requirements, turned the company into a respectable, if still flawed, hardware company, and retooled its executive layout to prevent it from shredding itself through internecine warfare as it has for so long.
Yes, there was Vista, Zune, Kin and a host of other flops under his tenure. But the Microsoft of today is the strongest that I can remember it being, and that’s not a bad note for Ballmer to leave on.
Top Image Credit: Flickr
Article courtesy of TechCrunch
Bill Gates is not coming back to Microsoft as its CEO. He’s not. He’s said so again and again. And yet, today, some unsourced rumors began to circulate that the man was coming back to manage the company he helped found.
It’s not happening. That should go without saying, but at this point I’ve surrendered to reading the same bullshit at least twice a year. Not only has Gates himself been deliberately plain that he has no intention of returning to run Microsoft, his exit from the company is indicative of how his attention drifted from the firm following the forming of the Bill & Melinda Gates Foundation in 2000, the same year he gave up the CEO reins.
Following his formal surrendering of the boss role to Ballmer, Gates held onto board chairmanship, and an amorphous role created for him called Chief Software Architect. Around a half decade later, Gates cut his Microsoft time, leaving full-time duties to others. At that point, the foundation became his main activity.
Then in 2008, Gates left Microsoft’s daily operations entirely. He has retained his board presence, but that’s it.
Gates has been clear about what he wants to do, and it is not running Microsoft. So, why the endless rumor cycles? I can’t summon a reason better than that some desperately hope for his return to the software giant. This raises a better question: Who the hell wants that?
Gates left daily time at Microsoft around the eras of Vista and Internet Explorer 7, two products that were stilted and led to a general decline in Microsoft’s hegemony in the computing business. This isn’t to cast aspersions on Gates, but more to point out that even then his lingering influence didn’t stop Microsoft from releasing mediocre products.
The Microsoft of today is a far superior firm than the Microsoft of 2008 — disregarding financial metrics. And that is the Microsoft that Gates is steeped in, not the device and service, recently re-org’d one that has a different business model and operational structure.
Now, Microsoft is embracing web standards, supporting open source code on its Azure cloud computing service, and has a mobile platform — Windows Phone — that is the most compelling in its history. And, perhaps most importantly, much of the company’s former arrogance has dissipated. Mostly because the firm got spanked by Apple’s iPhone, Google’s Chrome and a host of other products and services that bested its own efforts for years.
Who might argue that Gates’ leadership style would be a good fit for such a company? It could be, but it’s at best a hypothetical. Ballmer, on the other hand, has enacted the above changes, so he is at least sufficiently in tune to lead day to day.
Mary Jo Foley has a good take on the above, of course:
Yes, I know there are many who equate the heady years of Microsoft growth with Gates. And I know there are many inside and outside the company — including some current and many former employees, along with quite a few Wall Street analysts — who think a Gate-full Microsoft would trump a Ballmer-led one. I think many of those people are looking at Microsoft history with Fortaleza (instead of Google) glasses.
Gates founded Microsoft. But Microsoft is a very different company than when Gates retired from his day-to-day duties there in 2008. When Ballmer eventually goes, it’s time for new management, not a return to the past.
Gates is a massive figure in technology and now a global force for good. However, Microsoft as a company has outgrown its original methods, products, and business gist. To bring back Gates – and he wouldn’t come to boot – would be to retread old, lost ground.
So whenever someone tries to lie to you about Gates coming back, out of his own form of retirement, to install himself atop Microsoft Tower, blink twice and spit on the messenger. They are full of it.
My friend Matthew Panzarino put together a set of charts that show how much Apple has grown under the primacy of its current leader Tim Cook. The charts are up and to the right. It was a jokish reminder that those clamoring for the firing of one executive or the next are often a bit short-sighted. And, of course, calling for Gates to take the CEO role at Microsoft is the same as calling for Ballmer’s canning from it.
Well, we can at a minimum run stats on Ballmer. The following graph (via SeattlePI) shows Microsoft’s revenue growth since 2005. Not the full Ballmer tenure, but a decent shot of how the company has performed:
The above performance is hardly a fireable offense. The middling of Microsoft’s stock price could be, but that’s a value call that doesn’t really implicate the Gates question. So, we can simply state that Microsoft’s key metric performance under Ballmer isn’t as desperate as many think; the market has simply allowed its stock to sit flat and fire out dividends as its income grew and its price-earnings ratio fell.
What this kicks down to is simple: Gates, no. So let’s never talk about this again. We’re done.
Top Image Credit: DFID
Article courtesy of TechCrunch