The Nest Digital Thermostat Nest, which was acquired by Google in 2014 for $3.2 billion, is an influential player in the smart home industry. The company pioneered the digital thermostat and smoke detector. The Nest thermostat creates value by digitizing the entire home-temperature-control process-from fuel purchase to temperature setting to powering the heating, ventilation, and air-conditioning system-and connecting it to Nest's cloud data services."The thermostat aggregates data on real-time energy usage and shares that vital information with utilities, which use it to improve energy consumption forecasts and achieve greater efficiency. The retail price of a Nest thermostat is double or triple that of conventional thermostats Through its "Work with Nest program, the company is opening up its digital cloud program to devices from other providers. So far, partners include Whirlpool and Mercedes Benz. The connection with Mercedes allows drivers to adjust the Nest thermostat to insure a comfortable temperature upon arrival home. The Whirlpool integration provides the means to schedule wash and dry cycles during nonpeak hours. Using its digital cloud platform, Nest can enter other sectors by opening up its digital cloud platform to devices and services from other providers. Recent reports are that Nest is partnering with ADT, the world's largest home security firm.2 The two companies could connect Nest's Internet-connected thermostat with ADT's Pulse system that allows its customers to control their security system through a mobile app. Iansiti and Lakhani, "Digital Ubiquity," p. 95. 2 Google's Nest Close to Partnering with World's Largest Home Securit Company, A Forbes, December 22, 2014 th 2015 accessed p w tor es com on anuar o Propose a segmentation plan that Nest might use to target the small- and medium-sized business market