General Electric splashes out almost a billion dollars on cloud IT company

ge predix

When you think of General Electric, you probably associate it with giant mechanical and electrical projects which have only a passing association with computing. 

GE’s business mainly revolves around large infrastructure projects – in energy and transport, to name two examples. It also has significant interests in aircraft and appliance manufacturing, and of course weapons.

But increasingly all of its operations are becoming data-rich, and perhaps in recognition of this trend, GE has splashed out $915 million on buying a company called ServiceMax.

The deal was made by GE Digital, a business unit of General Electric, which earned revenues in 2015 of more than $140 billion.

ServiceMax provides cloud-based field service management solutions. In other words, its software is used by companies to manage off-site works, such as projects which involve the installation, maintenance and repair of machinery at a customers’ locations.

And when you consider the types of customers GE has, there seems some obvious synergies there.

Bill Ruh, CEO, GE Digital, says: “This acquisition builds upon our ongoing efforts to enhance our overall technology stack around the Predix platform and advance our Industrial Internet vision.

“Improved productivity is critical for the Industrial Internet and digitizing field services is a cornerstone of a successful digital industrial strategy.

“This transaction, along with our previous acquisitions of Wurldtech and Meridium, is directly aligned with our strategy to drive growth both inorganically and organically by building the capabilities to support the digital industrial transformation through Predix, APM and the Digital Thread.”

Dave Yarnold, CEO, ServiceMax, says: “The transaction will help position ServiceMax to reach its next phase of growth by having access to GE’s broad and advanced industrial portfolio, deep domain expertise and substantial customer footprint.

“We look forward to benefitting from GE’s experience, capabilities and resources as we expand into new markets while continuing to deliver the best tools to help customers maximize productivity and efficiency.”

Product lifecycle management 

In the industrial sector, something called “product lifecycle management” software has been in use since the 1970s, having been developed in the auto-making business.

The idea behind PLM was to connect all the data generated by the various teams involved in the entire business operation – principally those who work in research and development departments.

Essentially, PLM is collaboration software, but specifically designed for engineering and manufacturing companies.

The benefits of PLM seem obvious now, but such solutions were previously only accessible to very large companies who could afford to pay the huge fees required to build such systems.

Even now, off-the-shelf PLM software tends to require a high level of customisation to make it work with whatever company which requires it.

Nonetheless, PLM software is becoming more widely used in the industrial sector, and GE has its own solution, called Predix.

But unlike many PLM applications, which usually reside within onsite servers or computers, Predix is designed to be a cloud-based application.

In fact, GE claims Predix was the first industrial cloud, and claimed at the time of launch last year that it was the only industrial cloud.

Launching Predix, Jeff Immelt, CEO of GE said: “Cloud computing has enabled incredible innovation across the consumer world. With Predix Cloud, GE is providing a new level of service and results across the industrial world.”

It may or may not have been the only industrial cloud service, but now Predix is no longer alone – there are a large number of other providers.

Here’s a list of industrial cloud vendors, along with their relevant product or service:

And like many other sectors of what might be called “the data business”, the PLM market is growing and diversifying.

But GE apparently believes it has an advantage, and could go on to make billions in what is often referred to as the industrial internet of things market.

Indeed, GE has previously said that its ultimate goal was to connect every industrial machine in the world.