General Electric (GE) is creating a new Industrial Internet of Things-focused business in a bold move meant to reinvigorate its competitiveness in this space, The Street reports.
The business will start with strong prospects out the gate, with a $1.2 billion in annual software revenue and a built-in industrial customer base worldwide. Leading this new endeavor will be GE Digital CEO Bill Ruh. Core verticals will include power, renewables, aviation, oil and gas, food and beverage, chemicals, consumer packaged goods and mining.
"As an early leader in IIoT, GE has built a strong business with its industrial customers thanks to deep domain knowledge and software expertise. As an independently operated company, our digital business will be best positioned to advance our strategy to focus on our core verticals to deliver greater value for our customers, and generate new value for shareholders."
"As an early leader in IIoT, GE has built a strong business with its industrial customers thanks to deep domain knowledge and software expertise," GE Chairman and CEO Larry Culp said in a statement. "As an independently operated company, our digital business will be best positioned to advance our strategy to focus on our core verticals to deliver greater value for our customers, and generate new value for shareholders."
The decision to double down on Industrial Internet of Things (IIoT) should come as no surprise to anyone who has followed GE in recent years. Still, GE will have some catching up to gain market share as Microsoft, Alphabet, and particularly Amazon have dominated the space.
“Results from an Eclipse IoT survey indicate that Amazon AWS controls more than half of the developer market, Microsoft controls about one-third of the market, making it essentially a two horse race with Google chasing far behind,” The Street reports.
To focus on its core business, GE is selling its majority stake in ServiceMax, a cloud business it acquired for $915 million two years ago, to private equity firm Silver Lake.
