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Bringing Data Analytics Home

NestGoogle recently paid $3.2 billion to purchase Nest Labs, a company that produces smart, WiFi-enabled thermostats, smoke detectors, and CO2 monitors. These technologies are on the cutting edge of home automation and “the Internet of Things,” an envisioned Internet in which parts of physical reality are run and managed in the virtual space.

But the potential of these devices goes way beyond adjusting your home’s temperature with the help of your smartphone. Such devices have the potential to collect data — data that can be used to solve homeowner problems just as easily as it can solve business problems.

For example, combining advanced analytics with Nest thermostats can help homeowners control their energy bill in a more precise way. Done right, this can be done without any negative impacts on the homeowner’s comfort, as Martin LaMonica of Data Informed explains.

Behind the scenes, Nest analyzes home energy trends and takes steps to minimize discomfort caused by raising the temperature setting, such as pre-cooling the house or selectively controlling the fan and air conditioner compressor.

Nest and Google aren’t the only ones jumping on the potential of home analytics. Other companies are jumping on board, as well. Even the light bulb is getting a dose of data. For example, the proposed smart bulbs could predict when they need to be dim or bright based on your behavior or usage patterns, and could turn themselves off when you left a room without having to resort to a timer.

Of course, there are serious privacy and security concerns that arise when data analytics are used in this way. For example, the same data that helps you use energy in a more cost-effective way may also be used to tell all the wrong people whether or not you’re home. That means each homeowner will have to perform a cost-benefit analysis: how much privacy are they willing to risk in return for convenience and savings? It’s clear there is a limit: just ask Microsoft, who lost a huge portion of their market share as consumers grew angry over the proposed XBox One console’s mandatory use of another “smart” device: the Kinect. While Kinect does not use analytics directly to perform its functions it does have the potential to transmit a great deal of data to Microsoft.

Come to think of it, evaluating that balance–the point where technology stops looking fun or useful to consumers and starts looking invasive and creepy instead–would be an excellent business intelligence problem for those who are invested in creating it. The answers in that data might have a huge impact on the future of the “Internet of Things.”

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