GE Strengthens Position at Top of the Tech Pyramid With $915 Million Cloud Deal

General Electric might officially fall into the category of “diversified industrial company,” but it’s making huge plays to transform into a leader in the tech sector. 

This week, GE agreed to buy ServiceMax, a cloud-based service company, for $915 million. The investment will enhance its digital operations capabilities and further modernize equipment maintenance, as well as adding heft to its tech business unit. 

GE sees the Industrial Internet of Things (IIoT) as key to its transformation from a diversified industrial company to a digital industrial company that provides connected equipment to automate processes, provide “smart” capabilities and increase productivity. Investments, both in-house and through acquisitions, in cloud and software are critical to that effort.

“It’s no secret our services revenue is the bulk of our earnings and is a key part of what makes us successful,” Bill Ruh, chief executive officer of GE Digital, said in an interview with Bloomberg. “We’re moving away from where it’s all on paper to where it’s all becoming fully automated. Services are becoming a key part of the digital economy.”

Ruh’s business unit is on track to become a $15 billion business by 2020, GE says, helped in no small part by its proprietary operating system Predix, which is designed to help industrial equipment be more efficient in a digital world. The OS gives users data analysis capabilities for IoT sensors embedded in industrial equipment. That product will go a long way toward GE cementing its place at the top of the industrial servicing food chain. Ruh says that sector could grow to be a $1 trillion global market over the next 10 years, and digitization of those services will be a huge chunk of that revenue.

GE Digital also announced an expansion of its channel program this week. Its goal is to help a growing number of independent software vendors (ISVs) use Predix as the foundation for applications to enhance its IIoT capabilities.

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“The ISV program enables GE and its partners to make industrial apps more accessible to a wider range of companies, while helping them increase productivity through the use of the Predix platform,” said Denzil Samuels, global head of channels and alliances at GE Digital. “GE is creating a robust marketplace by collaborating with companies that share GE’s vision for digital transformation and bridge the gap between the industrial and IT worlds to drive successful business outcomes.”

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Partners, it isn’t just big companies from outside industries benefiting from the opening of the tech industry gates. The digital transformation provides new, huge opportunities for the channel, too.