General Electric Co. will spend $500 million this year to promote and sell tools that link factories, equipment and computer systems, seeking to become a one-stop technology provider for industrial companies.
The initiative is called Predix Cloud, a global network of data centers, computers and telecommunication facilities tied together with software to analyze the vast amounts of data being generated by machines.
GE is effectively offering other companies the technology it has developed to run its own industrial businesses, which span from aviation and energy to health care and transportation. By using GE’s cloud-based computing systems, customers will be able to keep their information secure and comply with stringent data regulations, the Fairfield, Connecticut-based company said.
“A more digital hospital means better, faster health care,” Jeffrey Immelt, GE’s chief executive officer said in a statement. “A more digital manufacturing plant means more products are made faster. A more digital oil company means better asset management and more productivity at every well.”
GE plans to build about 10 data centers over the next two years to support the project, according to Bill Ruh, GE’s vice president of software. The company is partnering with Equinix Inc. to develop its data centers.
“We will build, we will buy, we will rent capability globally and operate it as a single integrated infrastructure,” Ruh said.
GE monitors and analyzes data from 10 million sensors spread over $1 trillion worth of its assets across the world. By helping industrial companies filter this flood of data through Predix Cloud, GE said they will have more predictable operations, leading to greater cost savings.
“The predictions would be things like, ‘can we go to zero unscheduled downtime.’” Ruh said. “It doesn’t sound very sexy, but it may be the sexiest opportunity in the world.”
General Electric made about $2.4 billion selling software and solutions relating to its Predix portfolio in the first half of 2015. The company is competing against Siemens AG., Hitachi Ltd. and other rivals in the industrial-cloud market.
“The only way the Internet of things has any redeeming value is when we build applications that deliver real outcomes,” Ruh said. “That is not going to be built unless the industrial companies stand up and build industrial applications that have real outcomes.”