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Summary:

Samsung is in talks to buy smart home hub startup SmartThings in a deal valued at $200 million. If so, this is a win for both companies.

Samsung is in talks to purchase SmartThings, the smart home startup that has been trying to make home automation a mainstream option for consumers who aren’t afraid to spend a bit of time programming their devices. According to TechCrunch, Samsung would pay around $200 million with an eye toward getting in front of Google with its Nest acquisition in January.

Both the SmartThings spokeswoman and a Samsung spokeswoman declined to comment on the deal.

The SmartThings app showing my sensors.

The SmartThings app showing my sensors.


But really this is a logical step for any big consumer brand that wants to have some element of control over the smart home. SmartThings has a hub, which handles the radio complexity that’s causing so much consumer confusion in the market today, but its most valuable asset will be its software and ability to get developers excited about using the SmartThings’ programming environment to build apps that can combine different connected devices into a personalized home experience.

That software has the potential to act as a sort of universal remote for the connected home, and if the market evolves so consumers pay for apps for their home like they buy apps for their phone, Samsung will have a platform prepared to address this potential evolution of the market. If that’s not the way it pans out, Samsung has purchased a hub and some very smart people who are thinking about the way connectivity changes every aspect of our lives.

It makes sense for Samsung to pick SmartThings up and really get into the game. It can’t just sit around and make standards and ignore the fact that no one is going to want an all-Samsung home while it is still offering proprietary apps. It needs to get into the home with quality software and a platform that supports a variety of third-party devices.

With SmartThings, Samsung would get a platform that is trying to be as open as possible — even hacking together support for products without developer programs, such as Dropcam or the Nest before it created a developer program. The software side could use some work, but that is where SmartThings has been concentrating in its recent product upgrades.

And for SmartThings, the money and clout that Samsung has will help it support more devices faster — a needed element for getting consumers to buy its hub and attracting more developers to the platform. It also means that the platform that SmartThings is building will survive what I expect will be a gradual evolution away from a dedicated hub that threatens those companies solely focused on building these universal remotes for the connected home.

As the excitement around the smart home and the internet of things builds, we’re seeing an influx of bigger brands push their way into the hub market, such as the Staples Connect hub and affiliated devices and the GE/Quirky Wink software and hub. Google and Apple are also trying to make their mark with software and a user experience that will drive consumers to their devices. That doesn’t include the service providers or the established security giants also trying to get their software to be the brains of the home.

A pile of sensors from SmartThings.

A pile of sensors from SmartThings.

As the bigger name brands dive in, it’s tougher for a small company like SmartThings to get the more esoteric radios and big-name consumer brands to work with them. However, it certainly has the support of the developer community. Almost all of the really interesting connected home apps I’ve seen work with SmartThings.

So if this deal does happen, it’s probably a good one for both parties. Maybe I can get Alex Hawkinson, the CEO of SmartThings, to tell me how all this went down during our conversation at our Structure Connect event in October.

This story was updated at 8:36 pm to add Samsung’s refusal to comment.

  1. As a long-time owner of SmartThings, I strongly disagree. If true, the only winners here will be the founders of SmartThings who will be able to pocket a sizable cheque from the buyout. Users of SmartThings (myself included – I was a Super Early Bird on Kickstarter) are likely to be kicked to the curb as Samsung meddles with the platform, imposing their OS, design and standards to the detriment of everything created this far. “Open,” as far as Samsung is concerned, means “Samsung software on Samsung hardware.”

    Moreover, Samsung has a reputation for taking strong platforms and killing them dead; for instance, Boxee’s thriving community was gored within a weekend. I expect the same will happen once the acquisition, if true, closes. I know your valley publications are concerned with the business of tech, but it would be nice if every once in a way you’d look at the impact on end-users.

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    1. Totally agree. Samsung’s purchase would be a huge lose for customers. They do not have a good track record of maintaining anything long term. I’ve been heavily looking into investing in one these systems and Smart Things is probably off the list if this is the plan.

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  2. mutuality

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  3. Samsung is the worst news for Smartthings, which I am a user of. SmartThings has strength in its openness and weakness in app/software implementation. Samsung is not known for openness and is notorious for poor software / platform execution, so it seems like Samsung is in perfect condition to kill what’s good left in ST. While I agree that ST needs deep pockets to sustain and innovate, I fear Samsung’s corporate culture and philosophy would do more harm than any R&D money could make up for. :-(

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  4. Hi Stacey,

    i think #Samsung will be good advised if they would also have a look at the existing open source projects like #Eclipse #SmartHome. They are completely open which would be a good thing for all those who are in doubt about privacy. They do also come with a huge community and thousands of installations worldwide and they (through the community solution #openHAB.org) are connected to more than 90 different gadgets, technologies and protocols. Finding a hardware to run the ESH on will be the smallest problem for #Samsung.

    Best, Thomas E.-E.

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  5. SmartThings is the worst. I’m a developer, and as seen in the weekly ST hangout, all the Dev team does is waste time and not improve their back end API. Plus, they’ve sent me two ST hubs, and they stop working when my primary Internet fails over to my backup Internet. I’ve had an open ticket with them on this since I received my kickstarter backer kit. They have a great concept, but very poor execution and management. Samsung buying them would kill any hope in SmartThings. I would just buy a MiCasaVerde, which is unfortunate, because I really like the ST idea, but I need a product that is stable.

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  6. I agree with the earlier commenter, this is only good for the investors in SmartThings. These gateways will become a lot less useful once standards emerge (See AllSeen & HomeKit). I don’t even see why Samsung needs to buy these guys other then to play catchup to Apple in this space.

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