Microsoft and Insteon team up with a retail smart home push

Microsoft(s msft) is apparently not going to let Google(s goog)/Nest and Apple’s (s aapl)HomeKit efforts leave it in the dust. The company has been getting closer to Insteon, a pioneer in the home automation sector, with new Windows 8 apps and today said it will sell Insteon gear in its retail stores. While I expect Microsoft to get a bit more aggressive in the smarthome space soon, this will help it learn what consumers want from the smart home.

Microsoft stores will offer three Insteon kits — a Starter Kit, a Home Kit and a Business Kit — and five standalone devices, including the Insteon Leak Sensor, Open/Close Sensor, LED Bulb, On/Off Module and Wireless Wi-Fi Camera. Prices will range from $29.99 to $79.99, with kits starting at $199. Microsoft retail employees will also be trained to help assist customers with questions regarding setup.

Insteon uses a proprietary radio technology along with data over power lines to connect its devices, but it is opening up to popular devices. For example it built an way for customers control Nest thermostats with Insteon gear, even though Nest hasn’t yet opened its development platform. Insteon also has one big positive some other systems don’t have — it works when your broadband doesn’t because the brains of the operations live in a server in your home, not in the cloud.

So while Insteon will need to adapt to some embrace of the DIY and more open ethos that has driven the market this time around, those new competitors can also learn from Insteon about customer education and how to build products that work when the cloud isn’t available.