Google's Internet of Things divisions have fallen on some hard times

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Google is unquestionably a leader in the tech world, but even leaders struggle from time to time.

That's the case in Google's Internet of Things divisions, as recent reports show that several of the company's IoT projects are struggling as independent companies working under Alphabet, the holding company Google created in 2015.

For example, Nest has not released a successful product since Google acquired the smart home device manufacturer in 2014. Alphabet executives have been pushing the company to debut a smart home security system in 2016, but reports indicate progress has been slow to this point.

Nest CEO Tony Fadell and Dropcam founder Greg Duffy have also publicly played the blame game for these problems. Nest purchased Dropcam in 2015.

Numerous top researchers have bailed from Verily, the life sciences division of Alphabet that focuses on trying to cure diseases with the assistance of data analytics. STAT recently published a story about these departures and said much of the blame falls on Verily CEO Andrew Conrad for pushing these top talents away.

Former employees and managers told STAT that Conrad starts important new projects but then diverts resources on a whim, which causes problems in existing relationships with partners and regulators.

Google also recently said it is actively trying to sell Boston Dynamics, the robotics startup it acquired in 2013, because it thinks the company is still years away from creating a product suitable for market. Google made this announcement months after reports broke that Google's robotics teams were suffering from a lack of focus and integration.

Alphabet has been tightening its wallet for several projects and is strictly holding its subsidiaries to their revenue goals, according to a recent interview with Fadell. Now that these companies have separated from Google's core business, Alphabet's executives can clearly see how these businesses are performing, and Alphabet is not happy with what it's seeing in many cases.

Alphabet plans to abandon some of these underperforming projects (such as Boston Dynamics) to focus on those that it believes will help the business.

Google's focus on the IoT is understandable given the way the IoT Revolution is picking up speed. When it finally arrives in full force, it will change how we live, work, travel, entertain, and more.

From connected homes and connected cars to smart buildings and transportation, every aspect of our lives will be affected by the increasing ability of consumers, businesses, and governments to connect to and control everything around them.

Imagine “smart mirrors” that allow you to digitally try on clothes. Assembly line sensors that can detect even the smallest decrease in efficiency and determine when crucial equipment needs to be repaired or replaced. GPS-guided agricultural equipment that can plant, fertilize, and harvest crops. Fitness trackers that allow users to transmit data to their doctors.

It’s not science fiction. This “next Industrial Revolution” is happening as we speak. It’s so big that it could mean new revenue streams for your company and new opportunities for you. The only question is: Are you fully up to speed on the IoT?

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By Dawn Reiss | Contributor

April 13, 2016, at 9:00 a.m.

Forget what you've learned about blue-chip stocks. Big companies are having trouble replicating IoT success stories with new products. One example Kramer points to is Nest, which produces smart-home devices and was purchased by Alphabet (GOOG, GOOGL). "Even if a company has early success, has a lot of financial backing by a really successful company like Google, that still gives you no assurance they are going to be the right bet to make," Kramer says. "We've never been in a time like this where you can rely less on somebody's blue-chip history to make a forward-looking prognostication."