GE said it will establish a new independent digital business focused on developing software for the industrial internet of things.
The yet-unnamed new company will bring together software solutions that include products including GE Digital’s Asset Performance Management, as well as the GE Power Digital and Grid Software Solutions business units. GE said the company will “provide software for asset-intensive industries with a focus on the power, renewables, aviation, oil and gas, food and beverage, chemicals, consumer packaged goods and mining industries.”
The new business will start with US$1.2 billion in annual software revenue and an existing global customer base. GE said the company “is intended to be a GE wholly-owned, independently run business with a new brand and identity, its own equity structure, and its own board of directors.”
The industrial internet of things network, also known as IIoT, links machines to each other, to the cloud and also to other devices. It allows human managers to use machine learning software to quickly analyze vast amounts of data and gain new insights to operate their businesses more efficiently.
“As an early leader in IIoT, GE has built a strong business with its industrial customers thanks to deep domain knowledge and software expertise,” said GE Chairman and CEO H. Lawrence Culp Jr. “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.”
There are many projections for the size of the IIoT market. In 2015, Accenture estimated IIoT could add US$14.2 trillion to the global economy by 2030.
GE said the new company’s independent structure will enable additional outside investment and give employees an opportunity to acquire shares and benefit directly.
GE also announced an agreement to sell a majority stake in ServiceMax, a leading provider of field service management software, to the private equity firm Silver Lake Partners. GE said the move will position ServiceMax for continued growth through more focused product development. The transaction is expected to close in the first quarter of 2019, subject to customary closing conditions and regulatory approvals.