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What Does Immelt's Departure Mean for GE, the IIoT?

By Paula Bernier June 22, 2017

Attend any Internet of Things event, report on any Industrial IoT story, or converse about the potential for connected things to improve business, and General Electric is eventually going to come up.

That’s because, as you probably already know, GE has become the poster child for the so-called Industrial Internet of Things.

GE has staked its very existence on the IIoT in an effort to use connected technology to modernize its own industrial businesses and those of other companies. Meanwhile, GE has sold off many of its other businesses, including its appliances, electrical, and water businesses; GE Capital; and NBC Universal.

The company, which makes a wide array of equipment, in recent years has garnered a ton of press for its plans to outfit everything from airplane engines to generators with sensors so it can collect data on the health and operations of such products.

Collecting such data, GE says, enables businesses to better understand what’s happening with such equipment, when and what kind of maintenance it requires, and how the equipment and those who use it will perform and behave in the future. All that, the thinking goes, will enable businesses to be more efficient, make more informed decisions in designing and servicing equipment, and even potentially enable businesses like GE to move from selling stuff to selling stuff as a service.

For example, GE says by gathering information on jet aircraft engines it learned that harsh, hot environments in certain parts of the world clogged those engines and made them less efficient. But by washing the engines they required less fuel and less maintenance. The company said that could save airplane owners an average of $7 million annually.

Of course, GE has gone beyond simply talking about its work related to the IoT. The company coined the phrase Industrial Internet. And then it launched a major advertising campaign to educate the world on what is possible with the Industrial Internet.                       

The 125-year-old company also has gotten a lot of attention because many people consider it a great example of how an old-timey company is transforming itself to better compete in the connected age.

So when we got news earlier this month that GE CEO Jeffrey Immelt, who has led the company’s digital transformation, is being replaced, it got folks wondering what the change would mean for the company’s IIoT strategy (and for the Industrial Internet of Things as a whole).

Immelt’s successor, long-time GE executive John Flannery, quickly moved to answer the question. “We won’t change that one iota,” said Flannery, who takes the helm Aug. 1.

However, Flannery also plans do a fast and comprehensive review of all of GE’s businesses. What exactly that will mean remains to be seen. At this early stage of the game, Flannery himself may not even know exactly what to do. But it’s clear that something needs to be done, and quick.

Alfonso Velosa III, the research vice president for the Internet of Things at Gartner, says GE has already made changes in the past couple months to the GE Digital leadership. The new team, he says, is focused on results in product, business development, and sales team enablement.

That’s good, because business strategist Adam Hartung in a recent Forbes piece offers a scathing review on GE’s IIoT efforts. There is not a single market he could identify in which GE is the dominant IoT player, he says.

“Rather than growing GE with disruptive innovations and visionary products in emerging technology markets, Immelt's GE was primarily shrinking via divestitures,” Hartung says. 

GE may have gotten ahead of itself with its IIoT efforts, admits Velosa of Gartner. But, he says, the company has been successful at educating the market about the IIoT, changing conversations with its customers and the competitive dialog with its peers, leveraging the ServiceMax technology it acquired to realize new efficiencies internally, and spinning up IIoT efforts with some big name companies.

The aviation and power divisions at GE have used the ServiceMax field service management platform to ensure the company has adequate information on what needs to be fixed so it can send the correct technician and tools to the job – avoiding costly additional truck rolls, Velosa says.

And ExxonMobil and Pitney Bowes are among the companies using the GE Predix analytics system. But while GE likes to talk about these two IIoT case studies and their projected results, Velosa says, the company has not yet shown the actual results of these initiatives.

However, he says, we’re only in the first wave of the IIoT. And now that GE has helped educate companies about the Internet of Things and how it can be applied to their business operations, it’s altered  customer expectations and established itself as the leader in this space. And GE competitors like Schneider Electric (with EcoStruxure) and Siemens (with MindSphere) have followed.

That said, it’s clear that GE will remain committed to the IIoT, says Velosa, and that the IIoT in general will continue to move forward.

“The genie is out of the bottle,” he says.

                                                                           


Edited by Ken Briodagh

Executive Editor, TMC

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