Nest CEO Tony Fadell looks at Nest as a hardware company, but explains at the Code Conference that things aren't just about the hardware, and that people won't always have to upgrade to newer future Nest products to get the most use from the latest features and services. Hardware is important as Fadell mentions that "at some points software tops out" and eventually you will "need new hardware for things to flourish," but he clearly feels that software plays a big role. Using the example of the iPod back when he worked Apple, he explains that from the innovation side of things it was more than just about the iPod, that is was really about the iPod and iTunes and iTunes music, that is was about the whole "collection of things" that made it a great innovation in that particular space.
This is the kind of approach that he is taking with Nest. As Nest evolves and newer products are launched to the public, consumers using those future Nest products won't necessarily have to jump to newer hardware further down the line to get newer features. The software side of things will allow users to continue with their current products with updated functionality, almost like with applications on our mobile devices. This doesn't mean that users will be able to use the same Nest product forever, but it certainly helps them get the most out of one piece of hardware that they can until they reach a limit of what their hardware can do.
While Fadell was quiet and rather vague without elaborating on what Nest's plans might be to bring this sort of software/apps experience to further Nest innovation, the idea of building on Nest with this type of mentality bodes well for consumers in the long run. There's no telling what Fadell and Nest might have planned to make current and future hardware more capable and enjoyable for consumers, but future Nest smart thermostats with a number of built in applications on the software side of things could make them infinitely more capable for those who use them by giving them longer life through more apps and features/software updates, assuming that is what Fadell and Nest have in mind.