GE Sees Fourfold Rise in Sales From Industrial InternetRichard Clough
General Electric Co. Chief Executive Officer Jeffrey Immelt said he expects sales of as much as $5 billion by 2017 from its business of helping customers use data collected from industrial equipment.
Revenue is headed to about $1.1 billion this year from the analytics operations as the backlog has swelled to $1.3 billion, the world’s biggest maker of jet engines and diesel locomotives said today at an event in New York. Since pledging in 2011 to expand the business, GE has introduced about 40 products designed to boost efficiency and productivity and reduce costs.
“This is going to be one of the underpinnings to improve the growth rate of the overall service business,” Immelt said today in an interview. Sales from the big-data business may reach “$4 billion or $5 billion in the next few years,” he said.
GE is seeing the fruits of a $1 billion investment in the so-called industrial Internet, including opening a global research facility in Silicon Valley staffed by engineers from Oracle Corp. and Symantec Corp. as well as Stanford University and the University of California at Berkeley.
Immelt has laid out a vision of a world of smart machines that can diagnose their own problems and find solutions. As companies have embraced big data to improve operations, GE has put resources behind the industrial Internet and now has 10 million sensors analyzing data from the wind turbines, medical-imaging devices and other equipment it has sold.
The company offers hardware and software to help customers track and utilize information. For instance, AirAsia will save about $10 million in fuel costs this year by using aircraft data to improve flight paths and traffic flow, Fairfield, Connecticut-based GE said in a statement.
GE said it is working to enhance cybersecurity following its acquisition of Wurldtech this year. GE also said it will expand a partnership with Intel Corp. and Cisco Systems Inc. to broaden the availability of its analytics software platform. “We’re building out an ecosystem,” Bill Ruh, vice president of GE’s global software business, said in an interview.
The former Cisco executive joined GE in 2011 to run the newly opened global software center in San Ramon, California. The research facility will have about 1,200 employees by the end of the year, Ruh said, up from 750 last year and above the initial target of 1,100.
GE fell 1.9 percent to $24.78 at the close in New York as the Standard & Poor’s 500 Index declined 2.1 percent. The shares have dropped 12 percent this year, compared with a 4.3 percent gain for the S&P 500.
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