Developer ecosystems are the choice of the new generation. When you're Honeywell, with competitors getting uncomfortably close, they're a smart way to defend your position.
There are two ways of looking at the world (or, at least, the world of air conditioning thermostats). If you live in Silicon Valley, there is no one other than Nest, and in the unlikely event that you see an old thermostat, you regard it as a quaint relic of the past. Of course, if you live anywhere else in the world, Nest is a pretty cool product that you might have seen once or twice, but chances are the thermostat that you adjust (or not) daily is made by someone else.
One of the most likely candidates for that title is Honeywell. The company has been at the forefront of heating, ventilation, and air conditioning (HVAC) for the longest time. But, increasingly, incumbency does not equate to stability (just ask the taxi companies in the face of Uber and Lyft), and Honeywell is well aware of this. The fact that the aforementioned and star-spangled competitor, Nest, was acquired by Google to form the basis of a broader home-automation offering only increases the nervousness that must be coursing through Honeywell’s global headquarters.
Which is why it is entirely natural that Honeywell would introduce an API program. Without getting into tech doublespeak, APIs are the technological widgets that glue together applications, devices, data, and the cloud. APIs allow sensor A to talk with device B and that data to be analyzed on cloud C. The important thing in this story is that APIs are a critical part of setting up an ecosystem of third parties that build tools and solutions that integrate with your own products. What Honeywell is banking on is that a bunch of smart young things will realize the massive incumbency that Honeywell has, and decide it is a smart move to build an app, a device, or some other offering that is applicable to that market. On the part of Honeywell, they’re hoping, of course, that there is safety in numbers, and that by creating a vibrant ecosystem they increase the stability of their core business.
Diving down into the minutiae of the announcement, it would seem to be a good win for API management vendor Apigee. The company, which IPOed last year, is one of a number of platforms (alongside 3 Scale, Layer 7, Mashery and others) who offer this sort of API management. Essentially, these third-party platforms take care of all the heavy lifting to set up an API platform.
Of course, APIs only work with digital products, and hence this Honeywell platform only applies to the company’s Lyric thermostat and not the gazillions of existing devices they have as an installed base. The company is obviously hoping that it’s more likely that customers will move from one Honeywell product to another one than they are to jump to another product altogether.
For Apigee, it is a nice win and reinforces the validity of their recently found Internet of Things strategy. For Honeywell, time will tell how much of a difference it makes.
