Google Buys Xively From LogMeIn, Folds In Nest to Advance in IoT

Xconomy San Francisco — 

Google is ramping up its efforts in connected devices for homes and businesses as competition with Amazon, Apple, and other big tech companies heats up.

Despite its prowess in machine learning and other A.I. technologies, Google may have some catching up to do in the so-called Internet of Things (IoT) sector. That’s the burgeoning market of machines getting linked to the Internet for various purposes, from light bulbs that homeowners can control via mobile app, to factory machines whose performance can be remotely monitored via sensors and software. Two moves this month signal Google’s desire to bolster its position in the market, spanning consumer devices and business products and services.

Last week, the Mountain View, CA-based company said it was combining Nest—the maker of connected thermostats and other smart home devices—with Google’s hardware team. Google acquired Nest in 2014, and it has been operating as a separate division within Google parent company Alphabet’s “other bets” group of businesses.

Now, Nest will work more closely with Google to better integrate its virtual assistant and other A.I. software into Nest devices. Nest CEO Marwan Fawaz will report to Google senior vice president of hardware Rick Osterloh, who oversees the company’s consumer products, such as Google Home smart speakers, Pixel smartphones, and Chromecast video streaming gadgets, CNET reported.

Google’s other recent IoT move is Thursday’s announcement that it has signed a deal to acquire Xively, the connected devices business owned by Boston-based LogMeIn (NASDAQ: LOGM). Google is paying $50 million and will bring on about 45 Xively employees as part of the transaction, LogMeIn CFO Ed Herdiech said in a Thursday conference call with investor analysts. The deal hasn’t closed yet, Google said.

Xively (pronounced “zive-lee”) sells cloud-based software and services that help businesses securely connect devices to the Internet and manage the machines—and the data they produce. Xively emerged from LogMeIn’s $15 million purchase of Pachube in 2011. Xively generated $3 million in revenue last year, but incurred about $13 million in expenses, Herdiech said during the call.

LogMeIn decided to sell Xively because an IoT software platform no longer fit into the company’s long-term plans, particularly after its $1.8 billion acquisition of Citrix’s business collaboration tools in 2016. Once it sheds Xively, LogMeIn’s products will consist of business communications and collaboration software (think webinars and video conferencing), tools for remote computer access and troubleshooting, and cybersecurity and password management.

“That [IoT] platform-as-a-service play for us wasn’t going to be part of our go-forward strategy,” LogMeIn CEO Bill Wagner said during the conference call. “The fact that Google bought the asset, I think, validates our platform, our development capabilities, and all the people who worked so hard on Xively over the years.”

Xively will join Google’s cloud computing division and is intended to complement its existing efforts to provide businesses with “a fully managed IoT service that easily and securely connects, manages, and ingests data from globally dispersed devices,” Google Cloud’s Antony Passemard wrote in a blog post.

“Our customers will benefit from Xively’s extensive feature set and flexible device management platform, paired with the security and scale of Google Cloud,” Passemard wrote.