Executive Summary
Mission Statement
Situation Analysis
General Electric (GE) is an American multinational conglomerate corporation founded by Thomas A. Edison in 1878 and is headquartered in Fairfield, Connecticut. It serves diverse industries such as aviation, consumer electronics, electrical distribution, energy, finance, and healthcare, among others. The company has operations in major markets in more than 100 countries across the world (www.ge.com). In 2015, GE ranked among the Fortune 500 as the 8th-largest firm in the U.S. by gross revenue, and the 21st most profitable company (www.fortune.com & forbes.com, 2015). As of 2016 the company was listed the ninth-largest in the world among the Forbes Global 2000 and ninth world’s most valuable brand (www.forbes.com). On January 13, 2016, the company announced that it will be moving its corporate headquarters to Boston, Massachusetts because of its access to talent, long-term costs, quality of life and international connections (www.ge.com). Moreover, it is important to note that of the 12 firms that constituted the original Dow Jones Industrial Average in 1896, GE is the only company still on the list (www.ge.com). The company’s historical innovation and managerial skills has been key for its survival for over 100 years.
The GE today is not the same company prior to the Great Financial Crisis (2009). In the last few years, GE has shed some marginally performing assets, including the NBC Universal business as well as its consumer appliances business (marketrealist.com, 2016). The biggest move has been the commitment to divest virtually all of its Capital assets valued at more than $100 billion dollars and refocus on the traditional industrial segment that includes power generation, locomotives, jet engines, and oil and gas production equipment; Synchrony Financial was spun out by GE in 2014 (marketrealist.com, 2016). In addition, to expand its global presence, GE acquired the French turbine manufacturer Alstom’s European energy businesses - its largest ever industrial purchase (realmoney.thestreet.com, 2016). GE's industrial earnings are expected to grow from 57% of total earnings in 2014 to more than 90% of total earnings by 2018 (up from just 37% in 2001) as the company divests its underperforming assets (www.genewsroom.com, 2015).
GE is transforming into the world’s largest digital industrial company. Last year, the company formed a new business unit called GE Digital, to push integration of the Internet and its industrial products through their proprietary software platform “Predix” and sensors across product lines (www.ge.com/digital). Predix is similar to iOS or Android, but built for machines. The platform allows developers to mine industrial data and write apps for everything from CT and MRI scanners to turbines and jet engines, gather insights and make the machines more efficient (www.ge.com/digital).
Market Summary
The Internet of Things Market
According to a study by Grand View Research, Inc., the global Internet of Things (IoT) market size is expected to reach 1.88 trillion dollars by 2022 (www.grandviewresearch.com, 2016). The Internet of Things connects devices such as consumer electronics as well as industrial equipment over a network, allowing information gathering and management of these devices via software to increase efficiency and enable new services (www.grandviewresearch.com, 2016). The study notes that technological proliferation and increasing internet connectivity as well as growing investments by tech companies into innovative industry startups have increased the growth opportunities in the market (www.grandviewresearch.com, 2016). The cost of the sensors needed to connect the devices that enable connectivity and exchange of information is expected to reduce dramatically and this is another reason why the industry is expected to grow. Additionally, futuristic concepts such as connected wearable devices, connected vehicles, connected homes, connected cities, and the Industrial Internet of Things (IIoT) are bound to open extensive market avenues over the next seven years (www.grandviewresearch.com, 2016). In the Internet of Things, companies like Qualcomm and Intel have built platforms and the entry of technological giants such as Cisco, Google Inc., and Samsung into the market has led to the development of innovative connectivity solutions across various applications and devices (www.grandviewresearch.com, 2016).
The Industrial Internet of Things Market
Moreover, the Industrial Internet of Things (IIoT) market is expected to reach USD 151.01 Billion by 2020 (finance.yahoo.com, 2016). A key influencing factor for the growth of the Industrial Internet of Things is the need to implement predictive maintenance techniques in industrial equipment to monitor their health and avoid unscheduled downtimes in the production cycle (finance.yahoo.com, 2016). In addition, several other factors such as the need to improve operational efficiency in the production process, enhance worker and plant safety, and reduce energy consumption are encouraging the adoption of Industrial Internet of Things solutions across various sectors (finance.yahoo.com, 2016). For example, the Industrial Internet of Things market in the healthcare sector is expected to grow at the highest compound annual growth rate (CAGR) between 2015 and 2020 (finance.yahoo.com, 2016). This sector is expected to have unique opportunities for the implementation of Industrial Internet of Things solutions for improving patient care and diagnostics through remote “critical” patient monitoring in real time (finance.yahoo.com, 2016). A comprehensive and intelligent monitoring system can enable a full range of healthcare services and treatments. Several companies have started providing advanced informatics solutions in the healthcare industry. One such company is GE, which offers integrated solutions for remote patient monitoring and diagnostics with the help of sensors and wireless networks (www.ge.com).
Global research and consulting organization Frost & Sullivan reported in November, 2015, that Asia-Pacific is the fastest growing market for the Industrial Internet of Things “estimated to be worth $24.2 billion, growing at a compound annual growth rate (CAGR) of 26.8 percent to $79.3 billion in 2020” (www.zdnet.com, 2015). The growth is attributed to the increased adoption of automation technologies in the manufacturing and mining sectors, advancements in healthcare facilities in the region, and deployment of smart grid solutions in China (www.zdnet.com, 2015).
One of the key factors restraining the growth of this market is the lack of common standards for interoperability between the numerous technologies operating in the Industrial Internet of Things ecosystem (www.iiconsortium.org). Industrial Internet of Things is primarily a convergence of sensor technologies, networking infrastructure, industrial equipment, data processing, and software solutions for data manipulation and reporting (www.ge.com). All these different kinds of technologies, offered by multiple vendors, operating together in a single environment leads to problems of technological integration, compliance, and issues related to the interchange of data (www.iiconsortium.org). To overcome this problem of standardization, the Industrial Internet Consortium was formed in 2014 by Intel Corporation, Cisco Inc., AT&T Inc., GE, and IBM Corporation. Since then, this consortium has over 150 member companies working together to define industry standards and accelerate the adoption of Industrial Internet of Things (www.iiconsortium.org).
Furthermore, the Frost & Sullivan report informed that increasing cloud deployment would further boost Internet of Things, although this could present several challenges, where large amounts of data would be involved, existing processes would need to be redefined, and security issues would arise. They estimated that approximately 25 percent of all enterprise IT workloads were expected to move to the cloud by 2020, compared to 12 percent in 2015; therefore, cyber security is paramount as the merging of operational and information technology would cause greater impact (www.zdnet.com, 2015). The research firm said, "Industrial control systems are more vulnerable than ever before and security will be the number one consideration as these systems are modified or developed; in 2016, it is evident that security will be prioritized and built into the architecture of any new systems before they are implemented" (www.zdnet.com, 2015). Frost & Sullivan predicted that the industrial control system security market segment would grow at a compound annual growth rate (CAGR) of 45.2 percent, generating $1.5 billion in revenue by 2020 (www.zdnet.com, 2015).
Internal Analysis
Predix
When GE hired Chief Experience Officer, Greg Petroff, about four years ago, he was given the task to create a platform to integrate all of GE’s software offerings. This platform would allow data to be collected, analyzed and used to increase customer operational performance such as increased efficiencies, reduced downtime and optimized maintenance and at the same time create manufacturer-customer relationship beyond sale and traditional service agreements to one where continual operational improvement drives real, material value for GE customers (www.gereports.com, 2014). Mr. Petroff and his team designed the platform known as Predix. It was designed to be “smart” or artificially intelligent and to derive relationships between incoherencies and incidents to lower costs for clients as it predicts failures in equipment before they occur. Predix was also designed to work with GE’s products directly using data from its global installed base so that it can monitor and recommend in a way no third party software can (www.gereports.com, 2014). Predix offers solutions (referred as the industrial Internet products) that provide a standard and secure way to connect machines, related big data and people (www.ge.com/digital). In other words, it's a platform-as-a-service, or PaaS, cloud solution that combines the power of big data analysis, high speed networking, secure cloud computing, and machine to machine communication to enable global industries to achieve outcomes that is beneficial to their bottom line. Cloud computing, big data analysis, machine to machine communication, and high speed and secure networking are all complex technologies. As said by GE chairman and CEO Jeff Immelt, "Industrial data is not only big, it's the most critical and complex type of big data; our greatest challenge and opportunity is to manage and analyze this data in a highly secure way to deliver better outcomes for customers and society" (www.businesswire.com, 2013).
Predix requires multiple types of expertise that can only come from collaborations. So, GE is developing and deploying this platform though partnerships with the companies like: AT&T, Cisco, Intel, Amazon Web Services, and Pivotal (www.businesswire.com, 2013). All these companies are expert in their respective fields and are developing the cutting-edge technologies that enable the various aspects of Predix platform. For example, AT&T provides its leading, secure and high-speed wireless network capabilities to enable remote monitoring. Cisco, which recently introduced its high-speed "Internet of things" system, enables intelligent networking, advanced analytics and quick data transfer between machines (www.businesswire.com, 2013). Intel and Cisco are both developing “Predix Ready” devices (www.ge.com/digital, 2014).
Target Markets
These solutions can be useful in industries like: Aviation, Oil & Gas, Transportation, Healthcare and Energy. The following early adopters are real-world examples of the value that Predix creates: for St. Luke's Medical Center, which is using GE software to manage and analyze patient and equipment data, “this means a 51 minute reduction in bed turnaround time and reduced patient wait times. Brazilian air carrier Gol Airlines is using software to better track, analyze and adapt its flight routes and fuel consumption and predicts it will see $90 million in savings over the next five years” (www.businesswire.com, 2013); E.On, a generator of wind energy, achieved a 4% increase in power output with GE’s predictive software (www.gereports.com); and Norfolk Southern, a rail operator, has seen “network velocity” increased by 10%” (www.getransportation.com, 2013). According to Jeff Immelt "for the first ten products launched in the last year, revenues are $290 million year-to-date, with orders of $400 million. GE will leverage our high-margin $160 billion services backlog to develop more technologies, grow our dollars of revenue per installed base 3-5 percent annually, and increase software sales by more than 15 percent annually" (www.businesswire.com, 2013). The next wave of growth for GE is expected to come through Predix as the company is testing these solutions for many more industries and machines like wind mills.
Predix Growth Potential
GE sees significant growth possibilities for Predix as it wants to leverage its high margin $160 billion service backlog to further develop and commercialize these technologies (www.businesswire.com, 2013). Jeff Immelt said, "We are developing more predictive solutions and equipping our products with sensors that constantly measure performance so our customers see major productivity gains and minimize no unplanned downtime. Observing, predicting and changing this performance is how the Industrial Internet will help airlines, railroads and power plants operate at peak efficiency" (www.businesswire.com, 2013). The growing number of services under the Predix platform will act as a major growth catalyst for the company as well as for its collaborating partners (Cisco, Intel, etc.). For example, according to IBM, "Each day we create 2.5 quintillion bytes of data generated by a variety of sources -- from climate information, to posts on social media sites, and from purchase transaction records to healthcare medical images" (www.03.ibm.com, 2013). This data holds a lot of unique information that can help industries to improve efficiency, productivity, safety, environment protection and many more things. Due to this unique information that can be derived from this data more companies are looking to collect and analyze them. This rising trend among the companies will lead to proliferation of big data and data analytic industry. Research firm International Data Corporation (IDC) predicts that big data market will grow revenue at 31.7 percent a year to hit the $23.8 billion mark in 2016 (www.ediscoverytimes.com, 2013). Big data analytic industry also holds a multi-billion dollar potential. Moreover, the machine data is the fastest growing data segment (www.ediscoverytimes.com, 2013). In a survey conducted by GE and Accenture in 2015 of executives across the industrial and healthcare sectors, 89% said that companies that do not adopt a Big Data analytics strategy in the next year risk losing market share and momentum; 93% feel that newer entrants are leveraging Big Data analytics as a key differentiating strategy; 84% feel that Big Data analytics has the power to shift the competitive landscape for their industry in the next year; and 87% believe it will have that power within three years (www.accenture.com, 2015).
Predix SWOT Analysis
Strengths:
Market Position: GE is a market leader across various sectors worldwide. It has more than 100 factories and 50 service shops across the world. Predix is evolving as a major source of revenue. Its Predictivity solutions generated $1.4 billion dollars in 2014 (www.ge.com, 2014). The company's Transportation segment is a technology leader worldwide and a supplier to the railroad, marine, drilling and mining industries. The company classifies its operations into five geographical segments, namely, the US, Asia, Europe, Americas, and Middle East and Africa (www.ge.com, 2014).
Economies of Scale: GE's sheer size provides it with tremendous purchasing power over its suppliers. When combined with the company's long focus on lean six sigma GE can underbid most competitors for contracts to supply customers with large equipment (www.ge.com, 2014). Once GE has secured a deal, it enjoys service contracts lasting 10-20-plus years to keep customers' mission-critical equipment up and running. This is where the real money is made because service contracts “generate 30%+ margins, keep the customer further locked in with GE, and elevate switching costs” (www.ge.com, 2014).
Long-term Customer Relationships & Services: GE's experience in most of its industries spans multiple decades. For example, GE sold its first jet engine over 70 years ago (www.fortune.com, 2015). Many of its customer relationships are equally long; importantly, many of the products GE sells are mission-critical pieces of equipment used in mission-critical applications (www.ge.com). Utilities can't afford to have their power generation abilities compromised, airlines can't afford to have faulty jet engines, and hospitals can't afford to have a faulty MRI reading. The risk of moving to the latest and greatest technology or competing supplier is too great. In many cases, like in aerospace, the entire project might have to be redesigned to switch to a competitor's jet engine, requiring high costs and lengthy qualification periods (www.ge.com). GE also brings a more comprehensive understanding of a customer's business when it has worked with and innovated alongside that customer for so many years.
The embedding of devices and software in hardware also implies the selling of higher-value-added solutions. For example, instead of selling a mechanical wind turbine, General Electric can sell wind turbines with sensors that constantly monitor and adjust the turbine's position so as to maximize efficiency. This means General Electric is selling a lot more than just hardware into its customer base. Doing this creates the opportunity to expand sales without any significant increase in sales and marketing expenses is a win-win scenario that should result in margin expansion as well as sales increases. Increased use of data and analytics should further protect GE's ability to secure lucrative service contracts and increase its attach rate of long-term maintenance contracts (www.ge.com). The customer gets to utilize assets efficiently thanks to servicing them (gas turbines, aircraft engines, locomotives, etc.) at the right time, and General Electric benefits from its stream of revenue from servicing. Moreover, since its services revenue tends to be higher-margin, the Predix platform could result in increased operating margin for the company. In fact, in its annual conference of Minds & Machines that took place in San Francisco last year (2015), Jeff Immelt reported that “the Predix platform had grown into a big business with $5 billion in revenues and $6 billion in orders expected this year (www.techcrunch.com, 2015).
Another aspect of the increased interoperability that Predix offers is the potential for an increase in customer retention. So for example, if a customer has gotten used to the productivity benefits of using General Electric's hardware together with its analytics platform, then most likely he will continue buying hardware from GE in the future rather than switch to a rival. The benefits to the company’s bottom line could be significant because, with all other things the same, any increase in the retention ratio for a company usually increases the lifetime value of the customer. In other words, the long-term value in making an initial sale is likely to go up with the industrial Internet.
Strong Research & Development Capabilities: R&D is one of the company’s competitive advantages. Given the mission-critical nature of GE's products, customers would prefer to buy from a vendor that can provide decades of equipment performance data. These service contracts help customers protect their big investments. Today, GE invests about $5 billion per year into R&D to ensure its products remain competitive (www.ge.com, 2014). The company further benefits from sharing insights between its industrial divisions, which often share technologies like turbines or imaging capabilities. GE’s research and development focuses on leveraging its technology breakthroughs across multiple businesses.
In addition, GE is investing heavily in the "Industrial Internet" to protect and enhance its services business, spending more than$1 billion over the last four years to create a $1.4 billion predictive analytics “Predix” software business as part of its mission to be one of the 10 largest software companies in the world by 2020 (www.ge.com).
Employees: To lead the company in its digital transformation, Jeff Immelt hired Chief Experience Officer, Greg Petroff and Bill Ruh, former Vice President of the Solutions Technology Group of Cisco. In order to make intelligent machines with software and analytics capabilities and to lead the Industrial Internet of Things, they moved some of its operations to Silicon Valley (www.fastcompany.com, 2013). To achieve positive customer outcomes, Bill Ruh attracted world-class talent in data science, user interface, cybersecurity and agile development; a total of about 1,600 new employees (www.ge.com, 2014). In addition, as GE is also using the Predix operating system across the company, they have launched 120 apps for asset optimization, enterprise optimization and internal productivity (www.ge.com, 2014). With its teams having Silicon Valley presence coupled with the company’s industrial context, they can rapidly co-create applications with customers that in addition solidifies their relationships (www.ge.com, 2014). Moreover, GE develops leaders through its learning facility in Crotonville, New York (knowledge.wharton.upenn.edu, 2010). They invest $1 billion in learning and development each year, and train about 40,000 employees in Crotonville courses each year (www.ge.com, 2014). Around the world, the company offers “capability building” to countries where they invest as an additional benefit to a “GE job”, “We train customer executives, invest in schools, develop small business and bring higher standards; this unique cultural edge allows us to beat global competitors far from home” (www.ge.com, 2014).
Weakness
As GE collaborates with other big companies there could be a breach of contract. In addition, being a strong brand, GE can easily be targeted for litigation for even minor issues.
Opportunities
GE has the opportunity to go beyond helping its customers across industrial segments manage the performance of individual GE machines to managing the data on all of the machines in a customer’s entire operation. Customers are asking GE to analyze non-GE equipment because those machines comprise about 80% of the equipment in their facilities. They want GE to help keep the whole plant running. They’re saying, ‘It does me no good if my $10 million gas turbine runs at 98% reliability if I have a valve that fails and shuts my entire plant down,’” explains Dan Brennan, executive director for the Industrial Internet for GE Oil & Gas (www.ge.com, 2014).
General Electric's management believes Predix will "drive the next phase of growth for the Industrial Internet and enable developers to rapidly create, deploy and manage applications and services for industry" (www.ge.com, 2014). That is, the more applications and services designed on Predix, the more customers will want to use the platform. In an industrial internet investment meeting in 2014, Jeff Immelt said, “we basically are going to say to our customers, look, you can do our assets on this, but we are going to let you do other people's assets” (www.ge.com, 2014).
With Predix, there is a huge opportunity for GE to quickly increase their organic growth rate and the rate of margin expansion of their service business in the United States and globally (www.ge.com, 2014).
There are also great opportunities for the company to build partnerships, acquire companies and create the standards to make the Industrial Internet a success.
Threat
Understanding that cyber security is one of their biggest threats GE acquired Wurldtech, a recognized leader in cyber security solutions (www.businesswire.com, 2014).
As GE’s Predix service is going to be adopted worldwide, it will need to recognize the data sovereignty requirements in the respective countries that they serve (www.informationweek.com). Many of the current concerns that surround data sovereignty relate to enforcing privacy regulations and preventing data that is stored in a foreign country from being subpoenaed by the host country’s government (www.cyberlawcentre.org).
Fluctuating currencies and economic recessions can affect global businesses severely.
Competition
The limited availability of the technologies involved in the integrated Predix platform acts as a huge entry barrier for the emerging competitors (www.ge.com/digital, 2014). There are some businesses that design software and sell PaaS solutions like Oracle, IBM and Microsoft, and United Technologies and manufacturing like Siemens and Honeywell International. For example, United Technologies can develop software to monitor Otis Elevators and Sikorsky helicopters and share benefits with its customers as well (ar.utc.com, 2014). However, GE, through critical mass, its head start and large installed customer base, can reap a disproportionate share of early gains and build on those through a cycle of base price reductions and recurring value-creating revenue with monitoring and service (www.predix.com). That is, only GE can combine innovative technology with industrial depth as customers seek solutions that deliver lower unit cost; “ Predix is the world’s first industrial platform to capture and analyze the unique volume, velocity, and variety of machine data generated across the industrial world – within a secure, industrial-strength environment” (www.predix.com). It is designed specifically for industrial data and analytics across industries such as aviation, healthcare, oil and gas, power, and transportation (www.predix.com).
The main factor in the success of Predix is GE’s collaboration with the other companies who are leaders in their respective fields and who invest billions of dollars to develop the cutting edge technologies that are needed for the successful deployment of the platform. For example, GE is partnering with AT&T, Verizon and Vodafone to securely connect smart cities, railways and manufacturing plants to the Predix cloud. These three partners are also “Predix Connectivity-as-a-Service collaborators” (finance.yahoo.com, 2016). In addition, according to Tony Shakib, Cisco’s Vice President Internet of Things Vertical Solutions his company and GE drive value for customers delivering joint solutions based on the Predix platform and Cisco’s Internet of Things-ready joint infrastructure; “as digital industrial partners, the companies will introduce Predix-ready appliances integrated into Cisco’s IoT compute platform, as well industry-specific solutions like the brilliant factory offering” (finance.yahoo.com, 2016).
MARKETING STRATEGY
GE’s Predix is the first cloud service built for industrial data and analytics. It all started a few years ago with General Electric envisioning a machine-data-based Internet that tracked and monitored civilization's engines and systems of all types. The main purpose of GE for creating the Predix was to connect machines and control systems, improve asset performance, deliver more value to machines and factories, and of course, lower costs. The creation of Predix required years of research and strategic partnerships in order to launch “the future of technology”, as noted by GE’s CEO, Jeffrey Immelt (Business Wire, 2015). General Electric first moved his own systems onto the Predix Cloud in the fourth quarter of 2015, and recently released the Predix Cloud for machine data users at the beginning of this year.
Even though Predix will encounter big competitors over the next few years, General Electric will most likely be the leader in the industry due to the experience in areas of focus such as healthcare, aviation, energy, and transportation. In the following sections, we will see more in detail the Predix’s objectives, target markets, and positioning strategy.
OBJECTIVES
Nowadays, industrial companies need to become more digital to survive as their productivity has significantly decreased over the past decade (Business Wire, 2015). Predix cloud and software aims to improve efficiency of machineries by analyzing daily data and providing solutions on how to better produce or utilize the machinery. While it may seem complex, this process can be compared to already existing products, such as the Fitbit. This watch, which was designed for athletes, sends daily data to a cloud where it is analyzed and then returned in the form of weekly fitness updates. In the industrial world, machines such as Power Generators will be connected to the Predix cloud and will daily send data in order to be analyzed and stored for research.
The analysis provided by Predix will then have many usages. First, the analysis will serve to optimize the machines’ performances. In a shoe factory for example, if a machine is only producing 5,000 shoes when the maximum daily capacity is 8,000, it means that there is an area or machine that is not fully utilizing their resources. Predix in turn, will help determine the factor that is leading to this and will provide different solutions for the company to optimize the machine’s use.
Another great feature of Predix is that it allows people to review the analysis and operate machines from any part of the world. In the healthcare field for example, doctors could monitor and operate dialysis machines from any computer with access to internet. This in turn, will help busy doctors save more lives and manage their time better.
Predix-based systems will also allow companies to monitor their products as they work, detect anomalies and early indicators of pending failure, and fix them before they break. According to the VP and general manager of Predix, Harel Kodesh (Babcock, 2015), “A cloud built exclusively to capture and analyze machine data will make unforeseen problems and missed opportunities increasingly a complication of the past." In aviation for example, Predix is expected to gather immediate information from flights and airplanes, detect if any component will fail within hours, and contact pilots and airport’s agents with solutions.
TARGET MARKETS
Even though General Electric has mainly focus (due to their experience) on fields such as aviation, healthcare, transportation and energy, the Predix was designed for all type of industrial machines. According to the Predix website, the cloud was created for any software developer and entrepreneur to design solutions for various industrial markets. Also, Predix includes selected apps and micro services that create an opportunity for startup companies to commercialize their solutions with GE as a partner.
According to Jeffrey Immelt, uses for the Predix Cloud aren't limited to ones that reflect GE's interest in manufacturing large-scale industrial products. For example, the Predix Cloud could capture data flowing out of a hospital's patient, imaging, and treatment systems. A more digital hospital means better, faster healthcare. Likewise, an oil exploration company can use Predix to achieve better asset management and more productivity at every level.
Although all industrial markets will benefit from the Predix, I think that the aviation and healthcare will see the most benefits as the Predix will significantly reduce the risk of failure and provide with cost saving solutions for a better and more affordable service.
POSITIONING
As explained earlier, the Predix is the first cloud service built for industrial machines, thus, making them the leader in the cloud industry in terms of investment. Companies like Microsoft, Oracle and IBM has announced (Darrow, 2015) the release of similar systems coming up in the next year, however, it is going to be hard for them to reach Predix’s success for two reasons.
First, GE’s experience in fields such as energy and aviation makes them have a competitive advantage over any other company that is seeking to enter the space. By pairing digital technology with its domain expertise across industries like aviation, healthcare and transportation, GE is transforming itself into the world’s leading digital industrial company, and new data (Annunziata, 2015) has revealed a potential 20 percent increase in performance for its customers. With the release of new software and products powered by Predix, GE is transferring its industrial domain and technology leadership to customers and paving the way for an industrial app economy worth more than $225 billion.
GE’s experience leads us to the second and most important point which is Predix’s Launching Strategy. General Electric first started using the Predix Cloud internally and recently launched it to the public. This strategy helped them achieve two things. First, they were able to improve the cloud and develop complex systems that work with many types of machines. Also, this strategy helped them in explaining and demonstrating their clients how to use the cloud, how to develop software and systems, and how to successfully operate current programs developed by GE.
General Electric’s Predix Cloud
General Electric has initiated its primary hosted cloud service. Planned for constructing applications for the Internet of belongings, General Electric has distinguished itself from market-dominating services like Amazon’s AWS by aiming the built-up market, and will be centering on applications associated to wind turbines, medical equipment, jet engines, as well as steam engine. The Predix Cloud, this product is an accumulation to General Electric’s Predix programmer tools, firstly designed for use just with General Electronic equipment, increasing the Predix Internet of equipment platform to transport Infrastructure like a Service. Predix Cloud is together a place to execute a platform and application for constructing IoT integration apps rapidly and easily (Klostermann, 2015).
Product
Along with its entire portfolio of software and solutions set to transport greater than $5 billion in income this year with $6 billion in guidelines, GE today declared new partnerships and products (Smolaks, 2015). By in year 2020, it imagines greater than $15 billion in solutions and software revenue determined by internal productivity and Predix scale. By combining digital technology with its domain capability across organizations such as aviation, healthcare, energy, and transport, General Electronics is converting itself into the world’s most important digital industrial organization, and new information has discovered a potential 20% increase in recital for its clients. With the invention of new products and software launched by Predix, General Electronics is relocating its industrial technology and domain leadership to clients and paving the method for an industrial applications economy worth greater than $225 billion. Price
Release of Predix.io – a devoted cloud atmosphere for application developers – will raise General Electronics’ Industrial Internet proposal and construct the world’s biggest application marketplace for organization
Release of Brilliant Factory proposes General Electronics’ proven digital manufacturing means to other organizations; P&G between different consumers that could perceive the same 10-20 percentage reduction in unexpected downtime that General Electronics has experienced manually
Release of the Digital Power Plant to distribute ~$230M of remaining present value for each combined cycle gas turbine place savings all through the 20-year life
Predix implementation on track for 20,000 programmers in the upcoming year; Predix Accelerator program increases ecology; expanded corporations with Accenture, BP, Boeing, Columbia Pipeline Group, Cisco, Genpact, Intel Infosys and PTC carry on to develop Industrial Internet
General Electronics distributes security innovation for clients across the product lifecycle; will implant Wurldtech’s cyber security firewall into 4,000 steam, gas, wind and aero copied turbines for defending important infrastructure
Establishment of energy services organization release latest conduits of innovation and growth for General Electronics
Promotion
Along with the Predix platform creating software returns of $4 billion previous year, General Electronic isn’t assessing the competition but instead propose to point out an ignored market. Kodesh has defined that they make use of Amazon Web Services manually and have put up their Predix platform for a separate and specific requirement. We’re talking regarding where an industrial organization goes to get its apps.” General Electronics isn’t only in the IoT market. Amazon’s supplementary Google’s Brillo and 2lemetry battle with Microsoft’s and IBM own IoT scheme, though these all focus on various features of IoT, and General Electronic may be a forerunning with their center on industrial apparatus.
Distribution
General Electronics is well-placed to recommend this service, previously manufacturing large machinery and equipment loaded with sensors that produce huge amounts of information. Though Predix was originally designed like a Platform as a Service (PaaS) permitting customers and intermediary developers to put all of this information to use, GE considers providing the infrastructure for executing these apps is of advantage, and CTO of GE Software Harel Kodesh remarks that a main selling point of this latest infrastructure offering is that it implements well with the software development section of the proposal. In addition, having built them, General Electronics already has an absolute understanding of how many of the large portions of equipment work.
GE Predix- Marketing Controls
Implementation
A number of steps were taken in late 2015 to secure numerous resources that contributed to the overall marketing plan. Besides internal processes GE has sought the expertise of The Outcast Agency to handle many press releases and further spread up-to-date information with current and potential clients. Due to the complexity in which the cloud-based software can be used, it is important for such agencies to minimize the intricacy that may be lost in translation to consumers who are taken back by the outcomes of the product.
In order to reach the desired market, GE implemented a path to ensure all components of Predix are in proper working order. They aim to be the industrial leader of analytical gathering and processing for industries if incremental amounts of data that can be processed to ensure productivity. In laymen terms many devices throughout our everyday life collect data that we ourselves may not be able to comprehend. Fitbits, cellphones, smart watches, thermostats and many other devices can feed information to the Predix cloud software where it can be stores and processed for efficiency. Multiply this by a huge magnitude involving jet engines, MRI scanners, mass power generators and other heavy-duty industrial equipment it can be a huge time and cost saver to ensure they are working every second to the highest standard. The amount of money that can be made by analyzing performance data is limitless. What is very important to look at the GE has concern over is the accuracy behind it. The smallest mistake can cost a consumer millions if not billions. Now although this is a worst-case scenario, the cloud acts as a platform in which other analytical data mining software programs can be made for specific companies or industries. This was referred to in the comparison of the IPhone running IOS operating systems while having the App store available to all users. In order to prevent such mistakes from happening, GE opened numerous Beta testing platforms and invited thousands of developers to test it out. As of late 2015 there were approximately 4000 developers using GE Predix software. The goal is to have over 20,000 developers building applications in the next year (Miller, 2015).
Another course of action to gain traction in this trillion-dollar industry is offer incentives to using the Predix software. Bill Ruh, vice president and global technology director at GE is offering two other industrial software packages on top of Predix to entice the development projections. Brilliant Factory and Digital Power will be used vertically with Predix to initiate big data efficiency within industrial workflow efficiencies. Mr. Ruh has already stated with the software they have been able to increase electricity and power by 20% from wind turbine farms. “We are connecting real-time controls and sub-systems and creating models for optimizing [the system]. We use sensor data, then work against models and adjust controls in real time based on that.” (Miller, 2015). With incentives come workshops, seminars, tutorials, interactive demos and a massive community that will be headed by Mr. Ruh and his team to show the capabilities of Predix (Predix, 2016).
Predix consumers already have the benefits of applications and services delivered by GE and the community of engaged developers. Demos, seminars and tutorials can be accessed through the Predix Early Adopter Partner Program. Here GE provides training and co-development support for businesses getting started with Predix. The program is open for consumers to start creating apps and services powered by Predix. The technology allows consumers to create Predix-ready devices and solutions that will help system integrators and consultants developing Predix-certified services (Darrow, 2015).
The goals are bold but relevant considering the size and growth of the data analytic market especially with the focus on industrial companies. GE has really focused on utilizing the software to enhance how businesses operate. Like GE has always done they have been the innovators for most of their existence and now once again being hailed the leaders with the “Internet of Everything”. The strategy follows how GE has operated for over a century, be first and be the best. Proper planning and ensuring a fail-safe product do this. The beta testing, developer platform and years of planning and testing have lead next to a few crucial months. GE’s entirety as a massive company will benefit them with internal usage that will allow them to test in fields such as Aviation, Mining, Oil and Gas, Wind and Solar Power, Mining and Healthcare. By using their captive market they can already prove how well the software works. What is unique is the platform that allows others to develop relevant applications to the consumer’s needs. The newly developed applications can then be used time and again by other companies and collectively store and process data. GE will use Predix to monitor and track the usage in terms of market share they are captivating as well as consumer’s locations, activities, information systems and quality control. It will be a large amount of data they are securely housing but it also is an opportunity to assess how they are growing as a company with Predix. They will be in charge of monitoring efficiencies as well as analyzing stored data while elevating to a high quality control of security of such vital information.
Contingencies
The main focus has and will always be the industrial fields. With the ever-changing world and advances in technology continuing to boom at a rapid pace there will always be a need to analyze data. GE’s Predix is an innovation for cloud based software platforms that let many users streamline efficiencies in what is somewhat of a neglected market. This can come in great hindsight to others but competitors such as Google, Microsoft and IBM have not dipped into what is a potentially very lucrative market at this time. It gives GE a huge advantage to further separate themselves as a global leader with analytical data. However, whether it be poor planning or an unresponsive market due to the economy, GE once again has an upper hand over competitors in maintaining positive profitability. They will always control a good portion of sales and market share due to the size of GE’s companies that it runs. A major plan that will not only yield profits but can save the company in terms of taxes is using transferable pricing. Transfer pricing or selling within a captive market is using one segment or subsidiary in this case for GE to buy another segment of GE. Predix can be bought and sold within GE’s own captive market that is priced competitively but at a cost based approach that will only be available to GE’s industries. To further expand on this concept take into account Boeing being one of the first and largest customers of Predix Cloud based software. They have already seen benefits from the software analyzing efficiencies that can be improved. If they were to decide to cease using Predix, Predix can sell its services to GE’s Jet Engines program and require buyers to use the software to monitor the output. It essential puts a monopoly on how products can be monitored.
The biggest benefit is streamlined efficiency for companies using Predix, which can save up to trillions of dollars for the consumers. However if the market planning changes there are other benefits that can be marketed to large companies. It makes sense to get the whole bundle of data analyzing, software and developers’ creation as well as secure data storage but should there be a change in operation, GE can market Predix depending on what market they deem most profitable. Just securely storing large amounts of vital data can be profitable. Cloud based storage is a growing industry and the reliability behind GE’s name would be a great way to secure many clients just looking for secure storage.
The other contingency plan is to further expand the multiple components of the cloud based software instead of market separately. The monopoly and market share that GE already has a strong grasp on is due to their understanding of machinery in the industrial market. Microsoft, Google and Oracle however stand strong through their knowledge of software. To ensure that these competitors do not drive into the industrial data market GE has to continue to forge partnerships with other technology companies. The company that has the expertise in both industrial machinery as well as software will have majority control of the market. Below is a list of partnerships already growing within GE’s Predix software:
Azuqua is providing its advanced cloud-based workflow and data integration services within the Predix services catalog. Predix developers can leverage Azuqua services to link data and applications from external sources, raise alarms, and process workflows. Bsquare extends the power of Predix to resource-constrained devices with its software and systems integration capabilities used to monitor, automate and optimize devices. These capabilities can be applied to a broad variety of industries including transportation, heavy construction, oil & gas, manufacturing and power & water. Foghorn is integrating its advanced analytics-in-motion capabilities with Predix to provide sophisticated intelligence in devices and gateways at the edge of the network. FPT Software has developed a connected vehicle industrial solution based on Predix that helps to improve transportation safety and efficiency. Genpact is an early adopter and the architect of the Lean DigitalSM enterprise and will jointly develop Predix applications and provide engineering, analytics, and systems integration services to help organizations optimize their asset operations. IGATE is an early adopter of Predix and has collaborated with Woodward to develop Predix-based real-time data and analytics solutions called "Digital Power Plant Ecosystem" for Woodward valves and actuators to support GE Power & Water asset performance management solutions. Infosys is leading an Industrial Internet Consortium (IIC) Asset Efficiency test bed to create a new predictive maintenance solution and reference architecture based on its Information Platform and GE Predix. The new solution will improve asset efficiency based on sensory data and machine-to-machine systems. Infosys and GE are also collaborating on a newly approved IIC testbed called “Industrial Digital Thread,” which will leverage the Digital Twin concept, Predix and Infosys Information Platform to deliver a new technology solution for the Brilliant Factory. Nurego is publishing its cloud business operations solutions as-a-service within the Predix catalog. Developers can use the capabilities to monetize their own services through Predix, leveraging extensive metrics and provisioning, usage, and entitlement services. Plataine is providing its intelligent automation capabilities through Predix to support context-aware actions and real-time recommendations for optimizing industrial operations. SparkBeyond is introducing its next-generation predictive analytics offering as a Predix micro-service. SparkBeyond is also developing Predix apps for on-going asset performance optimization and early detection of equipment failure, leveraging its deep feature discovery engine and knowledge relevant to the problem. Tata Consultancy Services (TCS) is leveraging its business and digital expertise to provide development and implementation support for Predix-based solutions. TCS has developed innovative new solutions for satellite image analytics for pipeline inspection, as well as cargo monitoring and control solutions that track temperature, humidity and other factors inside refrigerated cargo containers for trucking and shipping to ensure quality control and regulatory compliance. ThetaRay, a data analytics solution provider, is publishing its anomaly detection capabilities as a Predix microservice that will be offered as part of the Predix services catalog.
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