The Google re-org may help it innovate faster and find its place as a leader within the #IoT

Per BI, Google’s big reorganization, which made Google and its different brands separate subsidiary companies under a wider holding company called Alphabet, could mean fast growth for some of its IoT initiatives. Google has rapidly grown beyond its traditional web and search businesses in recent years, and under the umbrella of Alphabet those projects will have more flexibility as independent companies to innovate faster, according to an article in PC Magazine. 

The article explains that as Google reaches into more experimental areas like self-driving cars and healthcare, its investments in these areas have grown harder to justify to shareholders, who would likely prefer the company and its executives keep their focus on core businesses like search, Gmail, and Android. 

Under the new arrangement though, Google itself will be exposed to less risk should one of these side projects fail spectacularly: Google will be its own independent company that could be spun off to protect its share price should such a failure happen. That will both make shareholders happy because their shares’ value will be safe, and it will allow these side projects to be more aggressive in experimenting with nascent technologies, since they won’t be handcuffed by the risk that they could crater Google’s share price.

The reorganization will also allow Google’s founders Larry Page and Sergey Brin to focus more on these non-core businesses, as they will become co-CEOs of Alphabet and hand off the CEO role at Google to Sundar Pichai. The most important new companies  under the Alphabet umbrella in regards to IoT development will be:

  • Nest will become an independent company under Alphabet, which will hopefully help the company speed up the expansion of its product portfolio of smart home devices. The company has been slow to grow beyond its first offering, the Nest thermostat. Google acquired Dropcam for $555 million last year, and made it part of Nest. Nest hasn’t done much with the acquisition though: its released a connected home security camera earlier this year that didn’t do much to improve on the original Dropcam. Nest needs to release more innovative products if it wants to be a smart home company, not just a smart thermostat company.
  • Google X, Google’s innovation lab, will also become an independent entity. The lab is working on several projects that are relevant to the IoT including Google’s self-driving car tests; Google Wing, a drone delivery service; and Google Loon, an effort to expand internet access to new geographies using high-altitude balloons. Google X will be able to move forward with these projects more rapidly now that they the lab is more independent from Google.

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