Optimistic about the big industrial data market, GE will invest $1.4 billion in software business
Netease Technology News on June 25, according to the Wall Street Journal, General Electric will invest $1.4 billion in its fast-growing software business GE Digital this year.The jet engine andmotorProducers are striving to dominate large-scaleindustryDigital tools market for jobs.
The company said the investment will help drive rapid growth in its digital business revenue. It expects the business to reach $15 billion by 2020, more than doubling from more than $6 billion this year.
“We’re in fierce competition,” Bill Ruh, CEO of GE Digital, said in an interview. Its Silicon Valley rivals and other Industrial manufacturers are trying to develop similar software to fine-tune heavy-dutymechanicaloperations, and avoid unplanned downtime.
In 2011, GE opened an office near Silicon Valley, recruited hundreds of software engineers, and began to enter the software and digital products industry. The move is a major part of the strategy of CEO Jeff Immelt, who advocates refocusing on the industrial base of power generation, jet engines and medical equipment after scaling back financial operations.
Today, Immelt calls GE a “digital industrial” company, and the company says its software business is helping to simplify its manufacturing and design processes. GE itself will also benefit by $1 billion from increased operational productivity as more factories and design processes are brought into digital systems, improving assist jobs and accelerating production cycles.
However, the company needs to sell to industrial customers such as airlines, utility equipment companies and hospitals. At a time of slowing global economic growth, these organizations are struggling to increase productivity with heavy machinery.
For airlines, that means offering GE jet customers a new predictive model that can tell which parts are more likely to need replacement based on the engine’s flight environment. In the energy business, GE helped Qatar-based natural gas maker RasGas reduce downtime on its mile-long LNG production chain. According to the company, avoiding a one-day shutdown could save $150 million.
GE’s digital business is still small compared to its jet engine, power turbine, locomotive and medical scanner businesses. In 2015, GE’s industrial business had revenue of $108.8 billion. It has hired 5,500 new developers over the past few years, and it plans to hire another 2,000 by the end of this year. Its digital business employs about 28,000 people globally, a fraction of the 333,000 employees the company has.
GE believes that the connection of heavy machinery such as jet engines and data analysis are more profitable than other “internet of Things” businesses such as WiFi-enabled thermostats and stereo systems. (Lebang)
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