With partners including Intel (INTC) - Get Report, AT&T (T) - Get Report and Cisco (CSCO) - Get Report, GE has rolled out 40 apps this year for industrial companies using its rapidly growing industrial software platform, which combines device sensors with data analytics to optimize performance and extend equipment life.
"The next-generation industrial company is going to have this as a core competency because the physical and digital worlds are going to come together," Bill Ruh, GE's vice president of global software, said at a Deutsche Bank conference in Chicago on Wednesday.
The software business has grown rapidly at GE, which is targeting $5 billion in revenue from it this year, nearly a five-fold jump from 2014, and as much as $8 billion in 2017. GE now has 1,200 employees in software, five times as many as in 2012.
Expanding what the Fairfield, Conn.-based company has dubbed the "Industrial Internet" is a key piece of CEO Jeff Immelt's strategy to return GE to its industrial roots while selling off most of the lucrative finance business. With a market value of $277 billion, GE manufactures products from airplane engines to wind and gas turbines and health-care equipment.
"In the future, it's going to be about taking analytics and making that part of our product line like a turbine, an engine or an MRI" machine, Ruh said.
For instance, GE's recently announced digital wind farm connects Predix to turbines so operators can change the curvature of a blade or make other alterations in real time, which can add $100 million in value to every 100 mega-watt farm, the company estimates.
For rail lines, Predix helps companies save 10% in fuel costs through automated controls and programs, the company said. The average rail company can save roughly $200 million for each mile-per-hour gain in speed, Ruh said.
"This cloud is purpose-built for the industrial world as other clouds are built for the consumer world," he said. The Predix platform is also "agnostic to equipment in plants," meaning existing facilities could easily tap into the software, in large part because of Intel's contribution to standardizing the Predix interface.
Other partners include Accenture, which has developed analytics apps for Predix, and SoftBank, which has created Predix apps for the shipping and manufacturing industry. AT&T is working on Predix's secure wireless service, Cisco is setting up "intelligent networking" between machines and Pivotal Software is helping GE develop apps more quickly, Ruh said.