General Electric has seen the future of manufacturing. It involves competing with some very big technology companies.
GE recently announced a push into computer-based services, connecting sensors that are on machines to distant computing centers where data will be scanned for insights around things like performance, maintenance and supplies. The company plans to spend about $500 million annually building the business, according to the executive in charge.
“We think it will change the industrial world,” said William Ruh, the head of GE’s software business. “We’re talking about where an industrial company goes to get its applications.”
While some of GE’s software revenue comes from moving existing practices into a new category, the company expects future profits will increasingly lie in aftermarket services for products like its jet engines, wind turbines and medical equipment.
GE calls its new service the Predix Cloud, and hopes it will be used by both customers and competitors, along with independent software developers. “We can take sensor data from anybody, though it’s optimized for our own products,” Mr. Ruh said.
The move highlights how important the so-called Internet of Things, a term for matching sensors with cloud-computing systems, has become for some of the world’s biggest companies. G.E. expects revenue of $6 billion from software in 2015, a 50 percent increase in one year.