ADT and Google partner with plans to dominate smart home

BOCA RATON, Fla.—ADT and Google announced a long-term partnership with the goal of creating an end-to-end smart home solution that combines Google’s technology platform with ADT’s installation, service and professional monitoring network.

Google will make a $450 million investment in ADT, which equates to 6.6 percent of ADT’s outstanding aggregate common equity, in exchange for shares of a newly created Class B common stock having all of the rights and preferences of ADT's common stock except for the right to vote on the election, appointment or removal of directors. Google’s equity investment is expected to close in the third quarter of 2020.

Each company will commit an additional $150 million, subject to the achievement of certain milestones, to be used for co-marketing, product development, technology and employee training to advance the partnership.

ADT expects to offer certain Google devices to its customers beginning this year and to expand the integration in 2021. The complete “ADT + Google helpful home security solution” will utilize a secure platform for a “seamless experience that prioritizes privacy and interoperability for greater customer peace of mind and choice,” the announcement read.

“Today we start a new chapter in the company’s 145-year history with this partnership with Google,” ADT President/Chief Business Development Officer and former President of Defenders Jim Boyce said during a press call with Security Systems News. “ADT and Google is such an awesome combination and I think we have lightning in a bottle and we are going to be doing this a long time together.”

Boyce said the two will initially be focused on the “high-volume business,” which he said is do-it-for-me residential, DIY and small to medium business, as the two build a smart home platform with Google’s Nest products at the core.

Building the future smart home platform

“We will be anchored in Google Nest products going forward,” said Boyce. “Now that is not going to happen tomorrow; that is going to take some time, but we look at this as an opportunity to apply Google’s exceptional innovation, including product technology innovation capabilities and Nest products and AI and machine learning capabilities together with the platform we have today.”

Google sees the future smart home platform “as an extension of the strategy we set for ourselves several years ago,” Nest GM and Vice President Rishi Chandra said during the same press call with SSN. “Our mission has always been really simple: To create a home that takes care of the people inside of it and the world around it. And we fundamentally believe that the way to do that is to bring amazing technology … ambient computer technology to areas like the home but [also] bring it together through partnerships where you can really deliver an end-to-end customer experience.”

Chandra said there is still a lot of work to do to integrate products and create a seamless experience. “We are building a smart home platform that is going to allow us to extend the capabilities in a whole bunch of different ways, so you can connect your security system to all your other systems that you are building inside your house, from entertainment to energy systems to communications systems — that is bridge we want to build together and that is what we are looking forward to building over the next few years.”

AI and ambient computing

The partnership allows ADT to leverage Google’s machine learning technology to create a more intelligent home and experience for users.

“One of the things that we have found here at Google is there is a huge opportunity to rethink the home experience using AI and machine intelligence, and building a new kind of holistic platform that ties all these devices together,” Chandra said, noting that the challenge so far is the way customers experience the technology. “It is still really hard. I give the analogy that we have created these building blocks for the home, but we ask consumers to put the home together. And that is the mistake we are seeing right now because if we want to break through and really start addressing the real pin points inside the home we need to think end to end.”

Both Boyce and Chandra are confident that the combination of Google’s AI technology and ADT’s nearly century and a half know-how will lead to improvements in areas such as false alarm reduction.

“We think there is a big opportunity to shift away from this isolated platform to a new integrated, ambient computing platform that we are looking to build that will bring in all of these different technologies so they can actually talk and sync with each other,” said Chandra. “For the first time, we think that is the AI that we can unlock and help solve user problems such as false alarm protection, so something as simple as being able to understand from a mobile user perspective where you are can help already to significantly reduce that. A lot of those capabilities are already built into our cameras already that will help.”

Cloud technology is key

Both Google and ADT emphasized during the call that one of the keys to help bring this platform together is cloud technology.

“We have been looking at how we can bring Google technology to advance ADT and its vision for almost a year now,” said Chandra. “I think we clearly saw an opportunity with some of the consumer products and technologies that we have on how we can help ADT run its business. Obviously we have been making significant investments in our cloud technology for many years now, and we saw a great alignment there as well between the two companies.”

Boyce agreed, noting that the cloud is going to play an important role in helping dealers provide and offer their customers the latest cloud-based technologies, products and services.

“It is our expectation that our dealer partners, which are really a valuable part of the overall business, will contribute to and benefit from this ADT-Google relationship fully … the cloud is an important part of that,” said Boyce. “I think that some of our past experience of tapping into all of that goodness from a dealer’s perspective and we will make sure that happens going forward.”