Supply Chain Matters has featured prior commentary regarding General Electric and its ongoing efforts to transform itself from a diversified industrial equipment manufacturer to that of both an equipment and software services provider. GE is an ongoing case study in the leveraging of Internet of Things (IoT) technology into new business models for its customers and for GE itself. The core of GE’s Industrial Internet strategy is the Predix IoT platform tailored for operating equipment environments.
In conjunction with the Mobile World Congress trade show being held in Barcelona, GE announced today the GE Digital Alliance Program, an effort dedicated to growing its digital industrial ecosystem. This expanded alliance program is billed as connecting systems integrator’s telecommunications service providers, independent software vendors, technology providers and resellers with the technology and digital industrial expertise of GE. For the first time, GE alliance members will be able to train and certify their developers and begin building a variety of additional industrial applications with Predix.
In a prior commentary reflecting on GE’s 2015 financial performance, we noted that the new GE Digital business unit delivered a reported $5 billion in revenues in 2015. The company’s goal is to triple Digital Business revenues by 2020.
Development efforts surrounding the core Predix operating system began in 2012 as an internal effort to connect the vast amount of sensor data generated by equipment products. By 2013, GE began to analyze data among fleets of machines and equipment to discover important analytics related to operational performance and maintenance needs. Operating units began to correlate certain operating environments with performance outliers and needs for unplanned maintenance. It was then that GE executives began to view Predix as a data and analytics platform tailored for the unique and demanding requirements of many forms of equipment networks made up of aircraft engines, turbines, wind mills or sophisticated medical equipment. That includes collecting very significant volumes of real-time data and harnessing that data into more predictive analytical insights into asset up-time and reliable performance. The CTO of GE Digital is of the belief that Industrial Internet platforms will break the zettabyte barrier (1000 exabytes) in the next five years.
GE has invested upwards of $1 billion in its Industrial Internet efforts thus far, in-essence making a significant strategic bet on the Predix platform. The industrial giant holds a strategic card as well, namely current existing customer relationships with global industrial companies eager to leverage new and more recurring revenue streams. Make no mistake, the expanded Digital Alliance program is a wide swath initiative to build extensive influence and critical technology and development mass in the IoT marketspace.
With today’s announcement, GE unveiled new Digital Alliance collaborations with Intel, Capgemini, TCS, Deloitte Digital, Infosys, Genpact, Softtek and Wipro Limited. They join existing Digital Alliance partners Accenture, AT&T, Verizon and Vodafone, Softbank Corporation and Cisco. We recently brought reader attention to Cisco’s announced acquisition of Jasper Technologies to broaden that firm’s IoT platform.
Other enterprise technology providers recognize the vast potential of IoT enabled business models that link equipment performance with add-on services. Thus, as Supply Chain Matters has observed, the battle of which platform is to be most utilized in now underway, and there is a lot at-stake. Firms such as Cisco, PTC, Microsoft and Oracle are now engaged in this effort of influence among IoT development communities.
As Supply Chain Matters has previously advised, the early adopters of IoT enabled business models related to industrial and supply chain needs should exercise some caution in their early prototype development efforts. Understand that vendors are indeed positioning for dominance and to do your homework on the long-term resilience and scalability aspects of the network platform. Just like previous item level tech waves such as RFID, the perspective is far broader than any existing single technology or services provider.
Vendors with influence and large pockets will continue to positioning for platform and indeed partner and industry dominance, but that should not be deterrence to early adoption business initiatives for new business models that can leverage IoT information. . Early adopters also have a buyer’s advantage in that customer references and early success stories are critical for technology vendors and services providers vying for dominance.
A large building or business initiative requires a solid foundation built for endurance, solid architecture and partner support resources. That should remain a guiding principle.
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