Google parent Alphabet just lost one of its most prolific executives: Nest founder and CEO Tony Fadell, who previously led the invention of the iPod at Apple, is leaving. His role will be filled by Marwan Fawaz, who some years ago was the CTO of Charter Communications.
Fadell announced the departure on Nest’s blog Friday after the close of markets, writing: “Although this news may feel sudden to some, this transition has been in progress since late last year and while I won’t be present day to day at Nest, I’ll remain involved in my new capacity as an advisor to Alphabet and Larry Page.”
Google founder and Alphabet CEO Larry Page thanked Fadell in a statement sent to press Friday. “Under Tony’s leadership, Nest has catapulted the connected home into the mainstream, secured leadership positions for each of its products, and grown its revenue in excess of 50% year over year since they began shipping products.”
Fadell’s departure comes after months of reports about discontent at the Alphabet unit, which is selling internet-connected home automation devices. In March, Dropcam’s founder Greg Duffy sharply criticized Fadell for “insulting” his employees, and “fetishizing only the most superfluous and negative traits of their mentors” — a reference to Fadell’s admiration of the late Steve Jobs, who has often been described as a genial business leader, but ruthless executive.
Nest had acquired Dropcam two years ago for $555 million. Following the acquisition, plans for new Dropcam devices were canned, and a reported 50 Dropcam employees left.
But Fadell’s troubles at Nest go beyond the Dropcam acquisition. Nest has become an expensive project for Google, and one that apparently hasn’t always generated the expected revenues, with two reports pointing to a revenue shortfall in 2014. (A Nest spokesperson disputed these reports in a statement sent to Variety, but didn’t provide any actual revenue numbers.) This led to a reduced role for Fadell, who was once seen as a potential leader of all of Google’s hardware efforts.
Nest’s devices instead quickly got eclipsed by another hardware product made by a different group within Google: the inexpensive Chromecast streaming adapter, of which the company has sold more than 25 million units since its introduction in 2013.
So when Google made plans to build its own intelligent loudspeaker to compete with Amazon’s Echo, it didn’t turn to Fadell, despite the fact that Nest has been investing in voice recognition for sometime. Instead, it tasked the Chromecast team with the development of the new Google Home product, which was introduced at Google’s developer conference last month.
Fadell’s successor at Nest has an interesting background that could give us some clues about the unit’s future direction: Marwan Fawaz served as Adelphia’s CTO from 2003 to 2006. After that, he became Charter’as CTO for close to 5 years, followed by a brief stint at Motorola, where he was involved in selling the company’s cable modem business to Arris Communications. Fawaz has also been serving as a technical advisory board chair for the home security giant ADT. All of these positions indicate that he is intimately familiar with the world of big service providers.
Under his helm, Nest could potentially aim to strengthen its relations to these corporations. Selling internet-connected thermostats and security devices through service providers could be a lot easier than having to convince consumers that they need to install a $250 thermostat in their home.
Update: 4:50pm: This post was updated with more information on Nest’s revenue.