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GE Takes Leadership In Internet Of Things, Offers Long-Term Growth

GE has bet the company on the Blog Express Industrial Internet of Things (IIoT).

GE’s Predix IIoT platform has the potential to become the “Facebook” for the industrial world.

GE’s digital revenues will approach $20 billion by 2020.

GE is the “digital industrial company”

You might have seen the ads on TV – “What’s the matter with Owen?” and “Sarah: Building Machines that can talk.” General Electric (NYSE:GE) is in the midst of a major “bet-the-company” transformation. GE now calls itself the “The Digital Industrial Company” and is making big bets on software-defined machines, also known as the Internet of Things (IoT).

GE is betting that IoT would offer considerable productivity gains, cost efficiencies and new revenue opportunities across all its business units.

According to Morgan Stanley, the industrial companies will be one of the first ones to adopt IoT technologies. GE already is leaps and bounds ahead of every other industrial and software company. In other words, GE has become the biggest force in this critical “trillion-dollar” market My Update System.


Re-organization at GE

GE has completely re-organized itself with the IoT-driven digital strategy at the core of the organisation.

Exhibit 1: Bill Ruh – GE’s Chief Digital Officer (Source: GE 2015 Annual Report)

GE kicked off things by first hiring and appointing Bill Ruh as its Chief Digital Officer and opening a massive software development centre in San Ramon, CA. The centre at San Ramon has almost over night grown to over 1,200 employees.

Exhibit 2: GE Digital’s Headquarters, Bishop Ranch Business Park, San Ramon, CA. Source: San Francisco Business Times

GE’s IoT Goals

GE has stated the following goals for its digital business in 2016:

  • Connecting 200,000 machines
    • Via installed base, digitising engineering, commercial, sourcing, and services functions
  • Growing Predix platform (more on Predix below) to 20,000 developers and 50 partners
    • GE is well on its way to hitting or even surpassing this goal of 20,000 developers. As of July, 2016, GE had nearly 12,000 developers working on Predix. It claims that on an average, 500 developers have signed up for Prix each week.
    • For example, TCS has over 500 engineers trained on Predix and is working on an innovative solution to efficiently manufacture gas turbines.
  • Driving customer outcomes through over 100 innovative industrial internet apps

(Source: GE 2015 Annual Report)

GE sees three vast areas where IoT offers value and these areas drive its application development:

  • Real-time asset optimisation
  • Improved analytics and diagnostics
  • Preventive maintenance

In a recent investor presentation, GE Aviation gave the example of Emirates Airlines gaining 12 additional days of utilisation based on monitoring provided by Predix.

Exhibit 3: GE Aviation Benefits from Prix Platform (Source: GE Investor Presentation – Q2 2016)

GE Store

Borrowing an idea from Apple’s (NASDAQ:AAPL) app store, GE has created a store called “GE Store” to transfer and trade ideas between various business units. In fact, GE has set goals for each of its business units to contribute digital solutions to the GE Store. When other business units use the solution from the store for customer applications, the business unit that contributed that solution shares in the revenue. GE Store is a way to set clear, accountable goals for all its business units. The various units understand that digital is central to everything that they do.


About the author

Rohit Shetty