Google Nest just launched a pilot with the nation's largest apartment manager - showing where it sees the next big opportunity selling smart devices

Business Insider / Jillian D'Onfro

A successful pilot could spell big business for Google Nest, which was integrated into Google's hardware division in 2018.

• Google just announced a pilot installing its smart devices in a fleet of multi-family rental buildings in Denver.
• Through the partnership between Google and Greystar, the nation's largest apartment operator, Google Nest thermostats will be put in 1,500 properties.
• With the market for smart devices poised to grow to over $3 trillion annually by 2026 and millennials choosing to rent for longer, the pilot could be the start of a bigger push by Google into working with rental property managers.
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Google announced plans on Thursday to launch a pilot installing its smart thermostats in a fleet of multi-family rental buildings in a test of a new potential market for the device maker.

The program will be run via a partnership with Greystar, the nation's largest apartment operator, starting in the company's Denver properties.

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A successful pilot could spell big business for Google Nest, which was integrated into Google's hardware division in 2018 after fours years running as a separate company following Google's acquisition of Nest for $3.2 billion in 2014.

The target market for Google Nest, which sells "smart" devices that can connect to the internet such as thermostats and smoke alarms, has been mostly single-family homes. However, the new partnership is evidence of Google's interest in the multi-family space. With the market for smart devices seen growing to over $3 trillion annually by 2026 and millennials choosing to rent for longer, the pilot could be the start of a bigger push by Google Nest to work with rental property managers.

Google Nest thermostats have already been installed in Greystar's Denver Parq on Speer, a newly-opened, high-rise property. Greystar's 1,500 other Denver units will also receive Google Nests thermostats over the next month.

Stratis IoT will provide a neutral platform through which all smart devices can be connected and managed by property owners and residents. Launched in 2015, Stratis IoT helps to facilitate adoption of smart devices, also known as IoT, in multi-family and student housing properties.

As the case with many smart devices, privacy is a concern. Google Nest has had its fair share of issues.

In February, Google announced that the Nest Secure system would work with Google Assistant, angering some customers because there was no indication on the tech specs the product had a microphone. More recently, a Wisconsin couple's Google Nest system was allegedly hacked, allowing the hacker to speak to the couple, raise their heat, and play vulgar music.

Lee Bienstock, Google's Head of Enterprise Partnerships, told Business Insider the company takes privacy seriously.

"The number one item on the list here is working with partners that are signed up for, and invested in, the same safety and privacy standards we've put in place," Bienstock said.

Felicite Moorman, founder and CEO of Stratis IoT, told Business Insider the company has a hardline stance on security. Since 2017 it has integrated IoT devices into 325,000 apartments, according to the company.

"If you can't afford to have a secure application, you can't afford to be in the space," Moorman said.