Microsoft is on the hunt for home automation startups

Home automation is likely the next big wave for consumer innovation. While the idea is nothing new, the barrier to entry for startups is quite low and prices are quickly entering the range where many consumers can afford such luxuries.

An easy example of the home automation wave is Nest, a simple thermostat that uses algorithms to help keep your heating and cooling costs down, but packaged as a stylish piece of hardware. Admittedly, what they were doing was not new, but their execution was unique and their marketing was more or less perfect.

Nest was soon bought by Google, fueling the home-automation race among the tech giants with Apple getting into the game too, and now Microsoft is looking to move in on the turf. 

Microsoft’s approach, however, is a bit different from that of Apple or Google, as the company is opening up an accelerator program. In partnership with American Family Insurance, Microsoft will be opening up an immersive program from August to December and American Family Insurance is offering an optional $25,000+ for an equity stake in any company accepted into the program. 

The program is quite interesting from Microsoft’s perspective, as it is focused on one specific type of company and the intent may be more far-reaching than it seems at first glance.

With the home automation market starting to heat up, it seems that Microsoft wants to get in on the ground early with new companies in this arena. The thinking behind this move could be to spot new technologies before they hit mass market so that Microsoft can acquire companies in this space and give themselves an advantage against competitors.

This type of strategy is a big bet as finding these companies at an early stage is not an easy task, requiring the right combination of ideas, execution and coding to make a company a success. But Microsoft is not alone as the field of venture capitalists looking for the ‘next big thing’ is about as crowded as a sardine can.

Will it pay off for Microsoft and the startups? That’s a question that only time can answer.

Source: Microsoft | image via Satya Nadella

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12 Comments

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Couple home automation with windows that act as screens, and walls too, man homes of the future are going to be awesome. Chuck some graphene based solar cells on the roof, and winning!

But acquisition could still show benefits. If they do it like a acqui-hire, they may acquire valuable insights from said companies experience.

In a relatively esoteric field? I doubt it. There are many DIYers out there that have cobbled together robust systems, I'm sure MS Research could figure it out. By designing it from the ground up, they may have been able to come up with more innovative solutions. Instead, they're relying on people designing tech without MS's resources and tech in mind, they may wind up reinventing the wheel when they could have used pre-existingn tech in mind, reducing redundancy and leveraging mature and robust solutions that already integrate well with other MS products.

What MS should do is create a software to run a domotized house; years ago I bought a WM powered PDA which included a program to do exactly this. It was not develops by MS itself but the company was involved with the development. A stunning GUI, for example a house divided in zones, ability to control lights, temperature, curtains etc. etc. would put MS ahead of any competitor.

I would really like to see them purchase an established home automation company like Insteon. They already sell their kits in Microsoft stores and it's really the only decent one that supports Microsoft's platforms at the moment.

Camden Krupala said,
I would really like to see them purchase an established home automation company like Insteon. They already sell their kits in Microsoft stores and it's really the only decent one that supports Microsoft's platforms at the moment.

and what, ruin all their products that are out there now? I love MS but seriously some stuff I think needs to be independent of major companies...

Your right, that is a big fear when it comes to acquisitions. I would hope that they would buy them and keep the company independent, similar to google and nest, but perhaps work together to bring some really nice integration into their products.

Imagine, your family sits on the couch to watch Netflix on the Xbox. You hit play and the lights in the living room turn off. You pause to go get some popcorn and the lights turn on to 30% to find your way to the kitchen. I doubt that integration would come from a $25,000 investment.

Camden Krupala said,
Your right, that is a big fear when it comes to acquisitions. I would hope that they would buy them and keep the company independent, similar to google and nest, but perhaps work together to bring some really nice integration into their products.

Imagine, your family sits on the couch to watch Netflix on the Xbox. You hit play and the lights in the living room turn off. You pause to go get some popcorn and the lights turn on to 30% to find your way to the kitchen. I doubt that integration would come from a $25,000 investment.

If Microsoft did home automation it would be real easy to fix problems like this. Just close all the windows and reopen them......