Nest had a big press conference in San Francisco on Wed., Sept. 20, which I skipped because I figured it would be another thermostat or camera. Well, there was a camera, but the big announcements were the new Hello video doorbell and more importantly the Nest Secure security and home automation system with optional monitoring by MONI.

According to Nest, “It's tough on bad guys. Easy on you.”

The new products don’t do much more than anything else on the market, and they’re quite expensive, but there is at least one very important part of the story: Nest is doing it. Nest will sell millions and millions of the new devices. Alphabet sibling Google will be all too happy to tag along.

In the process, Nest will 1) give consumers another reason to adopt Google Assistant for voice control, and 2) give product developers a reason to implement Thread and Weave, two IoT protocols deployed in every Nest product since the first learning thermostat in 2011.

The end game, I believe, is to push the products through insurance agencies (insurtech, as the movement is known), which want more information about their policy holders and proof that the systems they’re subsidizing are actually connected and working. 

Maybe the insurtech angle is a stretch — Nest has said nothing about it — but it's far more interesting than the notion that Nest created a DIY security system that is more expensive and less useful than current offerings.

But first … what does this all mean for Thread and Weave?

Could Nest Sway IoT Standards with Thread & Weave?

Since day one, Nest has incorporated two home-grown IoT technologies, Thread and Weave, into all of its products (Thread evolved when it was handed over to a consortium in 2014, but all Nest products are still Thread-compatible). The thermostats have it. The cameras have it. Nest Protect smoke detectors have it. And all the new products have it, down to the lowly door sensor. Nest would like everything in the house to have it, regardless of who makes it.

Thread is a generic network layer developed for low-bandwidth IoT devices. The technology incorporates the IPv6-based 6LoWPAN standard (using 802.15.4 radios, like what ZigBee uses), but adds mesh technology and provisions for network security and battery optimization for lightweight devices.

On its own, Thread doesn’t do much but enable communications between IoT devices. It’s up to everyone else to add applications on top of it.

Nest’s own application layer is Weave – sort of the equivalent of ZigBee, Z-Wave and OCF, all of which define smart devices (lights, thermostats, etc.), establishing what they do and how they interact with each other.

The technology enables these products to intercommunicate locally, without an Internet connection.

In the case of Nest, a smoke detector could tell the Nest thermostat to shut off the fan when smoke is detected, even if the home network is down.

In 2014, Nest opened its Thread technology to the IoT community via the Thread Group, which has been helmed by Nest employees so far.

RELATED: Nest Exposes ‘Weave’ Home Automation Protocol for Thread

In 2015, Nest kind of opened up Weave, announcing Yale (Assa Abloy) as the first taker. Yale’s new Linus lock would be able to communicate directly with any Nest product, for example, to unlock the door in the event of a smoke alarm.

Two years later, as Nest breathes new life into Weave, no other adopters have been announced

A source tells me the “open” Weave protocol is a “controlled open,” only available to friends o' Nest, and not fully exposed. As with its “Works with Nest” APIs, only “some of the core components” of Weave are available to third parties. Nest's “OpenWeave” for third parties is not exactly Weave Weave.

The source says, “I still believe it to be a 'Nest does it best' type of open, where all third-party devices are inherently crippled.”

In any case, the power of Nest was not lost on Yale during the press conference, where the Linus lock enjoyed a huge plug, as well as a compelling new use case: The lock will communicate natively with Nest’s new IP-enabled Hello video doorbell … no cloud required.

A guest presses the doorbell. A homeowner answers from afar, recognizes the person, and presses a virtual button to unlock the door. The message can be delivered straight from the doorbell to the lock. In this way, the lock need not carry the burden of a battery-sapping WiFi connection. (August doorbells and locks work similarly, using Bluetooth.)

Better yet, the new Nest doorbell features facial recognition, so presumably the door could unlock automatically if the camera recognizes a familiar face.

There’s more. Nest announced today the Nest Cam IQ outdoor camera with facial recognition (for close up) and person recognition (far away). Because the camera, like all Nest products, has Thread and Weave inside, presumably it could unlock the door automatically when a familiar face is recognized. 

For $349, consumers will demand something really special in an IP camera. This camera delivers. It's really cool. It even zooms in on trespassers and tracks them in high-def.

Packing three microphones, the IQ outdoor camera incorporates Google Assistant for voice control. Out on your deck at night? Just say, “OK Google, turn on the lights.” 

With its Voice ID feature, the Google Assistant could automatically unlock the door with a spoken command from a recognized voice. 

By the way, Nest is is providing a free Google Assistant update for its existing indoor IQ cameras. That makes us believe the service will be embedded in the new security system at some point.

So we see that a worthwhile ecosystem based on Thread and Weave — not to mention Google Assistant — is becoming enticing for smart-home developers. 

Nest Secure, UL-Listed Security and Home Automation System

So far, the only Thread and Weave products we’ve seen are robust devices that can support a complete IP stack and Wi-Fi radio anyway, so they don’t actually need Thread/Weave.

The intent of Thread and Weave is to support smaller devices that cannot afford a big battery or Wi-Fi overhead – like a security sensor.

Finally, we have those sensors, called Nest Detect, a component of the new Nest Secure security and home automation system.

Nest Secure starts with Nest Guard, a pretty white hub with an onboard keypad, back-up battery, loud siren, blinking lights and a Wi-Fi radio (cellular optional) for connecting to the outside world – both for remote access and for cloud-to-cloud integration. In Sept. 20 announcement, Nest highlighted integration with Philips Hue, Lifx, Lutron, Chamberlain, “and more.”

Obviously, Nest needs to communicate locally with life-safety devices like the Nest Protect smoke detector and Nest Detect sensors. Indeed it does.

View all the new Nest products and features in slideshow

In the case of the new Nest Detect, a single CR123 battery powers the sensor for two years or so — respectable, but a little less than the equivalent Z-Wave sensor, and a lot less than traditional alarm sensors (319 – 443 Mhz), which can last more than five years.

A Nest Secure starter kit, including one Guard hub, two Detect sensors and two Tag fobs (NFC only) will retail for about $500, which puts the system at the very high end of the DIY market. (The fob doesn't do much today. You can use it to disarm the system. old-school like.)

Additional sensors cost $59, which is expensive for any ol’ wireless sensor, but not for a company that sells thermostats for $250 and a basic IP camera for $199.

We could imagine a house full of Nest sensors, potentially multiplying the number of Thread/Weave nodes in a single property by … a lot … overnight. Homes with a security system tend to have about six sensors on average.

Add that to a handful of other Nest nodes like a thermostat and camera, and the Thread/Weave penetration becomes meaningful enough to entice IoT fence-straddlers.

Nest has one more carrot for dawdlers: Nest Connect. The plug-in module serves as a Thread/Weave repeater and Wi-Fi bridge, ensuring reliable coverage across large homes, and providing Internet connectivity for Thread/Weave devices — like the Yale lock and Nest Detect sensors — that don't have Wi-Fi built in. The device wasn't discussed in the press conference because only like 12 people on the planet care about it right now. I'm one of them.

With a security system, a plethora of sensors, and a Thread/Weave bridge, Nest is starting to make its two big IoT protocols look pretty interesting to third-party developers.

Why the UL Listing? For Security Pros?

There’s another very important element of Nest Secure. It is (or will be) UL listed for security. Nest didn’t specify – and I haven’t been able to get definitive answers – but I assume they mean UL 1023 compliance for intrusion detection.

UL 1023 has certain requirements for battery back-up, encrypted communications, device supervision and more. Consumers don’t much care about the stamp, but professional security dealers do. Most will not install and monitor non-compliant systems.

For Nest to go the extra mile for a UL 1023 listing – it is neither cheap nor easy to attain, especially for a brand new player with a brand new technology – may suggest the company has designs on the pro channel.

Nest is using MONI Smart Security (formerly Monitronics) as its central station for consumers who want professional security monitoring. MONI, a subsidiary of Ascent Capital Group (Nasdaq:ASCMA), is pretty big, currently monitoring more than 1 million accounts, through a network of authorized security dealers (as well as LiveWatch, the DIY division acquired in 2015).

It’s not inconceivable that MONI would team with Nest to offer dealers the opportunity to sell Nest Secure as a user-installed, professionally monitored solution … or even as a pro-installed system. A pro could build out the whole Google and Nest ecosystem, with cameras, video doorbells, Yale smart locks, and smoke detectors to go with the alarm system. With big incentives from Nest … why not?

If not MONI dealers, then possibly home-technology integrators who crave recurring revenue but don't install security (yet). Considering these dealers already install doorbells, thermostats, locks and cameras, adding a security hub and monitoring service would be a simple and profitable endeavor.

Or … Nest’s desire to attain UL approval could be as simple as: They were hoping to sell the platform through an ISP like Comcast or security giant like ADT, both of which would require the designation.

The Big Insurance Play?

But there’s another big possibility: Nest is going after the insurance companies.

Given all the wacky start-ups and new products in the security space, insurance providers are taking more care in doling out discounts for monitored systems.

A UL listing is a big fat stamp of approval.

More than that, however, insurance companies are starting to demand proof that systems they subsidize are in fact working and connected. The old days of slashing 10% off the bill for a “monitored security system,” and then never questioning its existence or functionality thereafter … those days are numbered.

Already Nest has convinced insurance companies to give policy holders a Nest Protect smoke detector free of charge … and a 5% discount on top of it. The stipulation is that the insurance company gets notified once a month that 1) batteries are charged, 2) sensors are working, and 3) Wi-Fi is good.

Nest, with Google, is an information company. They can do that.

Insurance companies want more than anything to have a black box in the home like they have in the car today. Drivers can opt in for a discount, while insurance companies gather data, promising not to penalize drivers for whatever they see. Reward drivers, sure, but not penalize.

At the end of the day, the actuaries want better data to help them assess risk beyond the age and sex of the driver. How many stop signs are on the way to work? How many left turns are there? How late does the driver work? Does he stay home on weekends? Are there a lot of trips to the airport?

For the home: How many people go in and out? (Nest cameras can count.) Does the customer arm their security system? How long do the residents sit on the couch? How often does the door open and close? Does the homeowner pace back and forth? Is the home vacant during the summer? The weekends?

This type of data in aggregate can save insurance companies millions or billions of dollars. Brand new policies could be invented.

Now, couple that with data from the black box in the car? Jackpot!

Now, let’s go back to that $500 retail price for a basic Nest security package. It’s really expensive for what it is, especially given that it only works with one variety of relatively expensive security sensor (see sidebar, left). No one else is making Thread/Weave devices except for Yale.

Unlike, say, a Z-Wave system or one that uses standard alarm sensors (319 – 443 Mhz), Nest Secure doesn’t work (locally) with flood detectors, freeze detectors, water shut-off valves, sirens, keyfobs or just plain ol … cheaper door/window sensors. Not to mention, it doesn’t talk to standards-based lights, appliance modules and other niceties that complement virtually every other security system on the market.

In fact, while Nest Secure presumably communicates natively with Nest Protect smoke detectors via Thread/Weave, the smoke detector played no role in the big press conference and is oddly absent in Nest Secure messaging. Why wouldn't a smoke detector be front-and-center of a securty-system launch? It's just weird. 

We know one thing for sure: the smoke detector is not being monitored by the central station. If the house goes up in flames, no one will be notified except homeowners and the friends on their contact list. Perhaps Nest is whithholding any fire-safety messaging until a UL listing (985) arrives for that?

Between the relatively high retail pricing and scarcity of Thread/Weave integration partners, I see little reason for consumers to buy Nest Secure at retail at this time. The early-adopting Google and Nest groupies, of course, will take the bait.

But I see plenty of reasons for insurance companies to embrace the platform, given the secure nature of the ecosystem, and the generous discounts Nest is likely to provide. In such case, the $500 MSRP on Nest Secure makes a cut-rate deal from an insurance company look pretty darn sweet: We’ll give you this super-cool system for half off, and provide a 10% discount on your homeowner’s insurance if you let us take a look from time to time. Heck yeah.

The major obstacle right now is that Nest Secure doesn't communicate locally with any leak detectors, which is like the No. 1 thing that insurers want. That omission would be a deal breaker for insurers today, but certainly we'll see a Nest water sensor soon. I'm guessing 30 days.

The icing on the cake would be if Nest Protect secured (get it?) a UL 985 listing for fire warning systems. If that were the case, it would only be certified if paired with the Nest Secure hub, which could seal Nest's fate as the provider of choice for insurance companies. It would also make the system — finally — attractive to security pros.

Insurance companies are looking for a hardware, software and data partner. Nobody else is really in the running. Sure, I’ll wager my 25-year smart-home career on the idea that Nest’s security play is an insurance play.

I confess, although I would have gotten there eventually, the insurance bug was planted by an industry associate with whom I texted furiously and furtively during Rosh Hashanah celebrations.

There is so much more to explore — not the least of which is the extensive patent portfolio of Alarm.com and Icontrol (Comcast/Xfinity) — but the rest will have to wait.

Shoot me an email if you want to discuss on or off the record.

NEXT PAGE: Nest press release, product details

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{pagebreak}PRESS RELEASE

Nest Expands into Home Security with First Security System Designed to Be Easy on Residents, Tough on Intruders

With Six New Products, Nest Doubles Hardware Portfolio for Second Time in A Year

Nest Secure Designed to Be Both Effective Against Intruders and Delightful to Use

Nest Hello Delivers Trusted Security of A Nest Cam with the Familiar Convenience of A Doorbell

Nest Cam IQ Outdoor Brings Intelligence to Securing the Outside of the Home

Nest Labs, Inc., architect of the thoughtful home, today announced a home security solution that includes the Nest Secure alarm system, Nest Hello video doorbell, Nest Cam IQ outdoor security camera, and corresponding software and services.

• Nest Secure alarm system – A home security system designed to be tough on intruders and easy on you. The Nest Secure starter pack includes these products:
  • Nest Guard is an all-in-one security base that provides the alarm, keypad and a motion sensor, along with a friendly voice.
  • Nest Detect is a category first: a sensor that detects both motion and open or close movement in one compact, battery-powered product. Put it on a window and it will know when it opens. Stick it on a wall and it senses motion in a room. Place it on a door and it can do both.
  • Nest Tag is a convenient fob that can attach to a keychain, allowing you to easily arm and disarm Nest Secure without a passcode. Nest Tags are easy to share with family members and trusted people who regularly enter the home, like dog walkers.

• Nest Hello video doorbell – Nest’s first video doorbell combines the trusted security and intelligence of a Nest Cam with the familiar convenience of a doorbell.
• Nest Cam IQ outdoor security camera – Purpose-built outdoor security camera that protects homes with best-in-class imaging and intelligence, and tamper resistant, weatherproof components.

“Today, Nest is delivering on the next phase of our strategy to create the thoughtful home,” said Marwan Fawaz, chief executive officer of Nest. “We’ve had quite a year so far, expanding into 11 more countries, growing our product portfolio with the successful launches of Nest Cam IQ indoor and the Nest Thermostat E, and today we’re disrupting yet another product industry: home security. By building product experiences our customers love, Nest has experienced more than 60 percent growth on devices shipped in recent years and continues to expand to millions of homes around the world.”

Nest Secure

Nest Secure is the first alarm system that is actually enjoyable to live with, designed to be convenient for homeowners as they come and go.

“When we looked at the home security market, we saw a similar landscape to when we entered the thermostat market,” said Matt Rogers, Nest’s founder and chief product officer. “Just as people tend not to use programmable thermostats because of their complexity, the current home security offerings are also a huge pain to live with –whether it’s bulky hardware, false alarms or loud and stressful countdowns. That’s why 43 percent of people with alarm systems don’t ever arm them.*We set out to design a product that isn’t just effective during a security incident, but is delightful and easy to use when people are at home with their families, living their lives, which is the vast majority of the time.”

Everyone in the family has a different routine, so Nest provides multiple ways to arm and disarm: by tapping Nest Tag onto Nest Guard, through the Nest app, or by entering a code on the Nest Guard keypad.

Nest Secure makes it easy to monitor from anywhere, sending a notification if something needs attention. Customers have the option to add additional monitoring and deterrence by adding Nest Cams to their system, which are all controlled from the same Nest app.

READ THE MAIN STORY: Nest's New Security and Home Automation System: Implications for Thread, Weave, Insurance Providers

Nest Detect sensors combine both motion and open/close detection so they can be placed on either doors, windows or walls. They also provide the option to temporarily bypass the alarm on the way out, with the press of a button, thanks to a feature called Quiet Open. And if someone forgets to turn on the alarm? Nest sends a Remind Me notification to arm it directly from the app.

Nest Guard is designed to remain on guard –with battery backup and an optional cellular backup service –even if Wi-Fi is down or the power is out. And with an easy, voice-guided setup that doesn’t require tools, screws or wires, it’s simple for either the customer or a Nest Pro to install.

Nest Hello Video Doorbell

Today, Nest is shipping intelligent and powerful cameras. But there is one important area of the home not completely addressed by Nest Cams –the front door. It’s the place people come in and out. Where the action happens. And one of the first places burglars check for occupants.

Nest Hello can detect a person, then send an alert and a snapshot, even if that person doesn’t ring the bell. With Nest Aware, customers can get alerts when strangers or suspicious activity like people talking or dogs barking are detected.

Nest Hello customers can engage with guests and strangers at the door from anywhere and have a natural conversation with HD Talk and Listen. Echo suppression and ambient noise cancellation ensure it’s easy to hear each other, even on noisy streets. A list of pre-recorded responses makes it easy to quickly and effortlessly answer visitors with one tap from the app.

Nest Cam IQ Outdoor

Buying a security camera is driven by the peace of mind that comes from knowing the home and family are protected. But when it comes to keeping an eye on the home, we know people don’t want more information, they want better, actionable information.

Earlier this year, with the launch of Nest Cam IQ indoor, Nest introduced one of the most intelligent and powerful cameras on the market to bring better security to the inside of your home.

Now, Nest is extending that intelligence outside. Featuring a brand new design, Nest Cam IQ outdoor is a camera that does more and requires less time from customers. Instead of just showing what’s happening, it will deliver critical, actionable information via an alert –like spotting someone unfamiliar in the yard –so users know that the alert is important.

Google Assistant on Nest Cam IQ Indoor

Not only is Nest bringing new hardware to its camera portfolio, but will provide customers the option to add the Google Assistant to Nest Cam IQ indoor. It’s the first security camera to have the Google Assistant built in, and will be available via a free software update for all current and new customers this winter. The Google Assistant adds a new level of intelligence to Nest Cam IQ indoor, including the ability to ask questions, control the home, and manage tasks.

Security Product Integrations

Through the Works with Nest program, Nest has been working with partners to create integrations with its portfolio of new security products.

As previously announced, Nest has been working with Yale, which brings 175 years of expertise in locks, to build a modern take on a secure deadbolt. The new lock, as well as Nest’s own products, leverages both the Thread and Weave technologies to securely communicate with Nest Secure and other Nest products, even if the power is out or there's no Internet connection.

The Nest + Yale lock will be available early next year. Customers can disarm the Nest Secure alarm system when they unlock the Nest + Yale lock, and they’ll be able to unlock the door when they notice a friend (or delivery person) through the Nest Hello video doorbell.

Nest will also launch a new accessory, called Nest Connect, that will ensure Nest Secure will work in large homes, as well as enable the Nest + Yale lock, and similar products, to connect to the Internet and be controllable via the Nest App.

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When it comes to security, making a home seem like it’s occupied can provide powerful deterrence.

Works with Nest products including lights, switches and plugs from companies such as Lutron, LIFX, and Philips can connect with Nest security products to make it look like you’re home when Nest notices you’re away. That can help prevent break-ins from happening.

And with Chamberlain’s MyQ-enabled garage door openers, users can get a notification if they’ve left their garage door open. Then they can close it from wherever they are with a tap on their phone.

The Works with Nest program, using technologies such as Thread and Weave, enables Nest products to work seamlessly with products from other manufacturers as a complete system.

Pricing and Availability

Nest Secure can be pre-ordered beginning today on nest.com and will ship in November, when it will become available at leading retailers in the U.S.

• The Nest Secure starter pack, which includes Nest Guard, two Nest Detects and two Nest Tags, has a suggested retail price of $499.
• Customers will be able to purchase additional Nest Detects for $59 and Nest Tags for $25.
• A Nest Secure starter pack plus Nest Cam Outdoor will be available on nest.com and at Best Buy for $598, a $100 discount versus the standard bundle price of $698.
• Cellular backup service will be available on nest.com for $5 per month or $50 per year.
• Nest has partnered with MONI to offer its award-winning, 24/7 professional monitoring service in the coming months. And we’ll be launching Nest Secure in Europe and Canada next year.

Nest Cam IQ Outdoor will be launching in the United States, Canada and all Nest European markets in November at leading retailers, and can be pre-ordered on nest.com beginning today.

Nest Cam IQ outdoor is available at a suggested retail price of $349 or in a two-pack for $598.

To get more details about when it will be available, please visit www.nest.com. Nest Hello will be available in the U.S. and Canada in the first quarter of 2018, and Europe later next year. 

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