GE Hits a Reset on Predix

Why GE Is Resetting Predix

The restructuring of GE, which started in late July 2018, continues. In a recent announcement, GE CEO Lawrence Culp outlined a new Industrial IoT company that is expected to create a $1.2 billion business focused on industrial IoT. The new company will have its own brand, identity, and equity structure while still remaining under GE ownership. That independence is a sensible move because it should allow the business to focus on its core markets.

Those who have followed GE Digital closely will not be surprised by the comeback itself, but they may be surprised by how many key people left during the retreat, including GE Digital CEO Bill Ruh and GE Chief Digital Officer Ganesh Bell.

What Remains in the Business

After selling a 90% stake in ServiceMax, the new formation will consist of GE Digital’s industrial IoT solutions, including:

  • Predix
  • Asset Performance Management
  • Automation
  • Historian
  • Manufacturing Execution System
  • Operation Performance Management
  • GE Power Digital
  • Grid Software Solutions

Obviously, Jeffrey Immelt’s plan to make GE a top-10 software company is over. But GE still has an opportunity to preserve what worked and avoid repeating what did not. It will be interesting to see how the yet-to-be-named CEO of GE Digital defines a new path forward for the company. GE still has a lot of ground to recover.

The Competitive Context

  • Startups such as C3IoT, Uptake, and other numerous small “IoT platforms” have grown their software clout very rapidly in the industrial market. C3IoT, particularly, has collaborated with all the major cloud platforms and has a presence on HPE.

  • Cloud platforms also offer Industrial IoT solutions such as AWS SiteWise & Microsoft Digital Twins & Azure Sphere Secure-edge services. AWS & Microsoft Azure also has the advantage of more IoT developer (approx. 80%) on their side.

  • Siemens, Honeywell, and IBM all benefited from the market awareness GE Digital helped create, and they capitalized on it well.

What GE Should Do Next

GE’s biggest advantage in the industrial IoT market is its large installed base of industrial assets such as jet engines and turbines. That creates a strong case for edge computing and digital twins, both of which allow GE to monetize the data generated by those assets. Compared with startups, GE has the advantage of both industry expertise and asset ownership. That is also one reason investors have become more cautious about industrial IoT startups: they are looking for companies with a sharp sector focus and real domain expertise, not businesses that still need heavy handholding.

GE should focus on its current product portfolio and offer domain-specific solutions instead of spending time and money rebuilding a heavy foundation. Rather than reinventing the wheel, it should follow a path similar to C3IoT by collaborating with major cloud providers and reusing what already exists. That would let GE focus on the metrics that matter most to customers and create stronger differentiation from competitors.