If you had to name the top software companies in the world, General Electric (GE) would probably not be on the list. But when Jeffrey Immelt, GE’s chairman and CEO, told a large San Francisco audience yesterday that his company will soon be a $15 billion software business, it signaled a significant transformation for the 123 year-old firm that was founded by Thomas Edison. As GE is highlighting in its promotional campaign, they are now “the digital company…that’s also an industrial company.”
Immelt’s remarks came during his keynote address at GE’s fourth annual “Minds and Machines” conference that kicked off yesterday and the company’s leader was clear in his aim to make GE not just a provider of jet engines, wind turbines, and oil drilling equipment, but a digital innovator as well. “We believe that the industrial Internet could be twice the size as the consumer Internet,” said Immelt.
A prime example of GE’s potential impact in this area can be found in the critical field of energy production. According to Steve Bolze, CEO of GE Power and Water, his company’s technology helps supply twenty percent of the world’s energy, a share that could grow to thirty percent if GE’s planned acquisition of the energy businesses owned by the French firm Alstom goes through. The company cleared a major hurdle earlier this month when the European Union signaled they were ready to approve the $17 billion deal.
The energy universe is increasingly becoming more digitized and GE expects to play a major role in supplying technology to further this trend. “Generation, transmission, and distribution – it’s about the digitization of the entire energy chain,” said Bolze during a session organized yesterday by The Economist.
In keeping with this strategy, yesterday GE announced the “Digital Power Plant” which is billed as a software and hardware solution to create a virtual model of an entire industrial power plant complex, basically a “digital twin.”
The goal behind this technology solution is to improve the utilities’ ability to manage and monitor how they generate electricity in the most efficient, clean, and secure way. It is based on GE’s Predix platform which the company describes as “the operating system” of the industrial Internet.
“To transform the entire energy value chain, we need a purpose-built, modern digital industrial stack – from software-defined machines, to the controls, to the cloud,” said Ganesh Bell, general manager of software and analytics for GE.
Yesterday’s announcement shows how strongly GE believes in positioning themselves as a key player in device connectivity across multiple industries. “This is not a conference on the Internet of Things,” said Bill Ruh, the company’s chief digital officer, during yesterday’s opening keynotes. “This is a conference about machines that matter.”
Ruh’s brave new connected world includes smart meters, intelligent lighting systems, automobiles, and all of the data generated by GE’s vast array of consumer and industrial products.
GE’s aggressive moves in the digital space are designed to follow where their own customers and others are headed, especially those involved in energy production and distribution. Jim Connaughton, executive vice President of C3 Energy, spoke yesterday at the Economist gathering and described how the energy industry is combining existing equipment with new sensors and using software to give the whole operation a “brain” to manage it all.
“Every utility is sitting on systems that have never been networked before,” explained Connaughton.
The problem according to Connaughton is that public utilities have a notorious lack of enthusiasm for innovation, yet they are being forced to build “cyber-physical assets” that can readily adapt to the wireless world.
“We’ve gone to 20 utilities that said they would never go into the cloud,” said Connaughton. “Now, 19 of them are in the cloud.”
GE’s transformation over the last 14 years since Immelt took the helm from legendary Jack Welch is the latest chapter in the history of a major company that has spanned generations of entrepreneurs and industrial revolutions. “The Internet is the biggest machine in the world,” said Ian Wright of the powertrain company Wrightspeed. And for the new GE, that’s the machine that matters.