The intrepid entrepreneur behind Nest, one of the most high-profile tech acquisitions ever, has left. His replacement becomes the newest CEO under Alphabet, an unprecedented corporate tech experiment.
Nobody's really clear now what that means.
Tony Fadell, the controversial inventor, co-founder and CEO of Nest, the troubled smart home company under Google's Alphabet, announced Friday that he's leaving his role. He'll stay on as an adviser to Alphabet, but is handing the reins to Marwan Fawaz, a cable and telecom industry veteran.
Fadell's exit, amid escalating drama at Nest that sent ripples across all of Google, is fascinating. (More on that later.)
But the more immediate and critical story is what the CEO switcheroo means for Nest and Alphabet.
Despite its internal struggles, Nest is a market leader in the connected device field. It's a field moving more slowly than many expected, but Nest's ability to ship its smart thermostats, smoke detectors and cameras — and, just as critically, build out software and energy partnerships for internet-connected devices — will shape Google's position in a market that its rivals, particularly Apple and Amazon, are moving into.
But first, Nest will need to show it can improve its reputation, curb executive departures and strengthen its standing with Google. That will be the ultimate test of the Alphabet experiment.
The new boss
To do that, Alphabet execs picked a relatively under-the-radar technical hand.
Fawaz is more familiar with cable set-top boxes than smartphones or thermostats. He served as chief technology officer for two cable companies — Adelphia Communications and Charter Communications — before moving, in 2012, to run Motorola Home, the company's broadband device unit.
Google sold off that unit shortly after acquiring Motorola. After the sale, Fawaz moved to a tech consulting firm, Sarepta Advisors, and joined as a technical adviser to ADT, the home security system manufacturer.
That last role might be a good hint about where he'll take Nest. Sources said he was tapped for his experience in supply chain and manufacturing issues. One of his first moves may be to push out security systems — products stuck in Nest's roadmap, for various reasons.
"Nest should first bring out a simple home security system that augments the smarts in the thermostat, smoke detector and cameras," said Patrick Moorhead, an analyst with Moor Insights. "This would be a natural next step."
One investor who knows Fawaz said he also has a strong reputation as a "collaborator internally." That's a quality not typically used to describe Fadell, his predecessor.
People who worked with Fadell describe him as an obsessive manager — he likes to personally approve details about products, much like Steve Jobs, the former Apple CEO and Fadell mentor. Fadell, who created the iPod, is a prolific investor (he told Bloomberg he's backed over 100 startups) and familiar Silicon Valley figure. Just last week, he announced a new go-kart company he is running.
I reached out to several people in the smart home industry and close to Google. Most of them do not know Fawaz. He does not seem particularly gaudy. That may be Alphabet's strategy: Go with a low-key, technical boss.
The next turn for Nest
Fawaz may be low-key, but he'll need to stand up for Nest.
Last month, Google previewed Home, its coming smart speaker. It's coming from Google, not Nest. When it arrived, many people inside and familiar with the company read that as a clear demotion of Nest, the company intended to be Google's arm for building an operating system for the home.
(Fawaz may have a natural ally here. Google Home falls under the company's new hardware boss, Rick Osterloh, who, like Fawaz, worked at Motorola.)
We don't know how Fawaz will interact with his company and Google, though it's safe to assume he'll be less polarizing than his predecessor. That's probably a good thing for Nest — but not necessarily so.
While Fadell's tenacious management turned many people off, it also bred incredible devotion. Many people at the company see him as a visionary leader. And while Fadell kept his side hustles going as CEO (the Google Glass reboot, among them), he remains closely associated with the company.
"I still see Tony as Nest and Nest as Tony," a former employee told me.
The leadership change might convince employees to stay at Nest. It may also push Fadell loyalists to depart.
As I reported earlier, Fadell negotiated a vesting schedule for Nest employees to cash in on the Google acquisition two years ago. Sources told me that schedule is set to end as soon as this year.
Tony Faddell spoke to The Verge's Lauren Goode at Code Conference 2016. Here's the interview:
This article originally appeared on Recode.net.