Aligning Around the Industrial Internet

July 9, 2015
A discussion with Jim Walsh, president and general manager of GE Intelligent Platforms Software business, provides insight into the company’s recent realignment with GE’s Corporate group and the company’s increasing focus on the Industrial Internet.

Many discussions around the Industrial Internet of Things focus on how much this technology trend will actually impact the day-to-day operations of manufacturers across industry. Though the jury may still be out on the far-reaching impacts of this trend, one things is clear: The companies that provide the technologies and services that support the Industrial Internet of Things concept are already changing.

One of the most visible examples of this is GE, which has been making public its adherence to the inevitability of the Industrial Internet of Things—which it refers to as the Industrial Internet—for the past few years now. Company chairman and CEO Jeff Immelt has even been fond of saying that “if you went to bed last night as an industrial company, today you’ll wake up as a software and analytics company.”

In January 2015, GE underwent some restructuring to support its move toward becoming more of an Industrial Internet company itself. A key facet of this change was the naming of Kate Johnson as the CEO of GE Intelligent Platforms (GE IP) Software—a title which she holds in addition to her previous title of Chief Commercial Officer at GE. In her role as CEO of GE IP Software, she is tasked with transferring what GE learns from automating its own manufacturing operations with an eye towards the Industrial Internet and transferring those lessons to the products and services GE supplies to industry.

The Industrial Internet is already making a noticeable impact on GE’s business. The company reported last November that $1.1 billion of its revenues are attributable to the Industrial Internet. These revenues, according to GE, come from asset monitoring revenues compiled across all GE business. Granted, $1.1 billion is a very small fraction of GE’s nearly $150 billion annual revenue in 2014, but it is a significant amount considering that the Industrial Internet didn't even exist as a business concern five years ago.

To get a better understanding of the GE IP realignment around the Industrial Internet, I spoke with Jim Walsh, president and general manager of GE IP Software. According to Walsh, a key aspect of the realignment is to better connect GE IP with the corporate commercial team headed by Johnson.

“This move puts GE IP into a position to work across all of the company’s vertical businesses more seamlessly,” Walsh says. “It has simplified the engagement model for GE’s vertical businesses to leverage GE IP technology, people, and processes to go faster. The direct connection to Kate and GE’s Commercial Center of Excellence team has been a huge enabler to progress.”

Walsh was quick to point out that this new alignment is not intended to replace any of the technology development currently being done in GE’s vertical businesses, but instead to leverage GE IP’s portfolio to complement their offerings and provide an even more complete offering to customers. This realignment really reflects “the speed at which GE wants to become more of a software company,” he says.

One structural difference in this new alignment is that GE IP’s Control and Embedded operations continue to be aligned with GE’s Industrial Solutions business. “We took GE IP as a legal entity and moved the software division to be more directly connected to GE Corporate,” Walsh says.

Though GE IP’s Controls and Embedded business are part of GE’s Industrial Solutions business, “how we collaborate and solve customer problems together day to day hasn't changed,” Walsh says. “Bernie (Anger, general manager at GE IP Controls and Embedded) and I still operate in the same offices. The synergies between hardware and software are still important to recognize and maintain. However, scaling a software business is different than scaling a hardware business, so we’re reporting them in the corporate structure differently now—but it’s still important for us to collaborate closely.”

Explaining GE IP’s connection with GE’s software development center in San Ramon, Walsh says that GE IP has “been in a highly collaborative relationship with San Ramon for some time now, and that collaboration has been focused on how we build the Industrial Internet together. GE IP is primarily in the applications business. Our focus with San Ramon is building the platform for the Industrial Internet—and our efforts are complementary. A great example of this can be seen in the work led by San Ramon around the Predix cloud platform. Many of our customers have use cases that fit the cloud nicely, and Predix can provide immediate benefit to our customers. It is our goal to make sure San Ramon understands our customer use cases so that, as more applications move to the cloud, the Predix platform is fit for purpose.”

He adds that GE IP and third parties will both be building applications to run on the Predix platform.

As can be inferred from the name Predix (as in predictive asset management), much of GE’s focus on the Industrial Internet to date has been on asset management. “Maintenance is the logical place for GE to start with the Industrial Internet because we’re such an asset intensive company,” Walsh says. “But that’s just the first instantiation of our approach to the Industrial Internet. We’re already defining other meaningful, logical places to go with this approach, such as manufacturing operations. .”

In essence, this new alignment at GE “drives all of our businesses to move a lot faster by reducing duplicative efforts and leveraging common architectures,” says Walsh. Ultimately, we’re talking about providing enhanced capabilities to industry in terms of how to harness and leverage their data that transcends anything they've had before. For us, this means it's about getting the right foundation in place regardless of the ultimate use case.

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