Google to provide software tools for the electricity business? Nest thermostats, Demand Response Comes to the Home (in the USA)

Companies such as Apple and Google have demonstrated an ability to kill entire industries.  Well, actually, the industries survive and prosper, just the historical players fade away as a new entrant does something much better, for a tiny fraction of the cost, than had been the case before.

Apple first took over the music distribution business as the iPod and iTunes spread.  And it has wiped out many giants in the mobile phone business such as Nokia and Motorola.  Google dominates "search" and related advertising, maps, and email.  Now it has put the fear of God into the auto industry with its plans for driverless cars (which, as collateral damage, would destroy the auto insurance business over the next 20-30 years).

So some members of the utility business might sit up and pay attention to a Bloomberg story this week that Google is going to enter the business of developing software for the electric power-related business.  According to Bloomberg:

"Google, a big consumer of electricity for the computer servers that power its services, is looking at ways to transform the century-old utility industry, which has been struggling to adapt to changing demands for power management and production. As solar, wind and other renewable energy sources come online, the power grids that transmit electricity will need to be more flexible and efficient."

Of course, if Google does this well and quickly, it will help push forward a revolution in the U.S. electric grid, and if this happens in the U.S., it will shame Japan into action.  The article cites as some evidence:

"Earlier this year, it spent $3.2 billion to acquire Nest Labs, a digital-thermostat company, and is an investor in Atlantic Grid Development LLC, a project designed to help deliver electricity in New Jersey."

Of course, Google is hardly the only company that sees a huge consumer opportunity in managing the "smart grid".  This article, also Bloomberg, from a few weeks ago, discusses other entrants as well.  The common theme -- the existing utilities are unable to take advantage of, or even see, this opportunity, as they view customers as "load", and do not know how to sell.  They are toast.

On the other hand, this month's Wired magazine offers an amusing look at the super connected home of the 2030s, dominated by Microsoft/Samsung (Samsoft) products, the merged entity having beaten out Google/Android and Apple.

Of course, Japan has its own host of "smart city" and "smart grid" initiatives.  But these initiatives seem to be going on in typical Japanese "Galapagos" style, largely apart from the rest of the world.  It seems likely that the Japanese smart city will have its own standards and pecularities, with little likelihood it can be exported (or that foreign-developed software tools can be used in Japan).