GE Digital – exciting times ahead!
GE’s recent announcement to establish a new GE-owned, independently run entity to expand the company’s leadership in the Industrial IoT market and to better serve industrial customers probably did not come as a surprise to the industry.
We have been following GE Digital's evolution since its inception, soon after which it became one of the first market leaders in industrial IoT and digital industrial solutions. Since then, many steps have been taken. The present time is certainly challenging for GE and its GE Digital unit in its current set-up. However, whether an independent software business will be more beneficial than leveraging the strong GE brand is questionable. In some cases, the reason for customers to choose software and IoT solutions from GE Digital is certainly the strong industrial heritage behind GE.
The future will show how GE and its new, independent Industrial IoT software solutions brand will manage this transition to become fully independent, and we will continue to closely observe the company’s strategy in this space.
We also recently had the opportunity to visit the GE Digital Foundry in Paris for an update on the latest developments and news around GE Digital's portfolio; there, we spoke with some of GE Digital’s executives from various product teams.
One of GE Digital’s major value proposition in the IoT space is its Predix platform, which features a set of applications and accompanying vertically-oriented solutions sourced from its other business units (e.g. GE Power, GE Renewable Energy, GE Oil and Gas, etc.). And, compared to other providers in the IoT platform space, in particular providers from the IT domain, GE Digital can play the strong card of being an industrial player itself, with deep and very comprehensive know-how and a strong knowledge base in the operational technology (OT) domain.
So, what are our key take-aways from our conversation with some of GE Digital’s product executives?
First of all, in the past there has been a strong focus on developing the Predix platform, putting a strong focus on IoT solutions (which is very much about capturing data from industrial devices and assets and analyzing this data in a way that allows to extract meaningful insights from that data). Now, we can see the focus shifting to applications on Predix, which relate to the foundation of the industrial internet, i.e. SCADA and MES. While we believe that SCADA solutions will continue running mainly on the edge for a long time, i.e. on-premises, shifting MES functionality (including the analysis of machine data) to the cloud is definitively an option, as it helps to better integrate the OT with the IT world and generate insights from both domains. Therefore, this would be an interesting opportunity for GE Digital to make its existing MES capabilities also available on Predix. In our view, there is currently only limited awareness for these in the market, compared to GE’s strong marketing push around IoT in the past years.
GE Digital will soon be announcing some product news in this context, which among other things will relate to its portfolio of MES/”Plant Applications” as well as its Predix Manufacturing Data Cloud (MDC), where the data of devices and assets from various sites can be transferred to and processed in the cloud. This potentially lowers costs that would be higher if the data was hosted and processed locally.
Another important solution for GE Digital is its Asset Performance Management solution, for which GE Digital already has a large installed customer base, in particular in GE’s traditional industries, e.g. oil and gas or utilities. In those industries, it is of particular importance that system operation (often complex plants and sites with corresponding high investments) is absolutely reliable. The major goal here is to ensure stability and safety. And, increasingly, Asset Performance Management (APM) solutions gain traction in these markets, not only to ensure the above-mentioned aspects but also to achieve a good return on investment. GE Digital can definitively build on its strong position in the above-mentioned core industries. In these, GE has in-depth know-how and expertise, a prerequisite for creating and building digital twins of assets acting as a basis for APM. These strengths can also be transferred and extended to existing customers in other industries, where GE has a solid footprint and customer base, e.g. in aviation (e.g. applying asset performance management to critical aircraft equipment).
Finally, we were also given some updates on Predix. In this regard, a major one, beyond continuously optimizing and developing this platform, is the launch of Predix Essentials. For this, some functionality was taken from GE Digital’s Asset Performance Management solution and included in the Predix platform. This functionality is about monitoring, analytics and event processing and is now offered as a stand-alone, out-of-the-box offering on Predix. There are some more plans around the Predix platform (incl. integrating BI capabilities and enabling drag & drop functionality), but this is subject to further announcements by GE Digital.
We will stay tuned for GE’s further developments and the company’s plans around establishing a new IIoT entity and brand, but do not expect to see significant changes to the strategic direction the current GE Digital unit has chosen and is acting on.
For more background information about GE Digital, please also see our detailed company profile.