If you had to explain to a visitor from outer space what some of the planet's largest companies do, traditional companies would be kind of easy. 3M makes all sorts of chemical and safety products. Johnson & Johnson does smelly cleaning stuff, and GE is all about making big heavy items of plant and machinery. An announcement today turns that simplistic explanation on its head.
For several years now, GE has been looking at its business through the lens of software. Even its corporate tagline has changed to being less physically constrained. GE is now, apparently, the company that "works on things that matter." It famously invested in big data and cloud software startup Pivotal, and has long told the story about the amount of data that one of its jet engines produces on a transatlantic flight. GE has moved from a vendor of machinery to one of data - if it can use software to make its jet engines more efficient for customers, that is an ideal outcome for the company.
GE and Pitney Bowes announced a partnership this week that signals a further departure from GE’s traditional industrial focus. What this means is that Predix, GE's software platform for what it terms the "Industrial Internet" (and other vendors call various names including the Internet of Things and the Internet of Customers), is now proving to be applicable to non-industrial companies. GE has previously announced over $1.1 billion in Industrial Internet revenues and is seeing growing interest in Predix as a standalone solution outside of big industry (healthcare, oil & gas, aviation, rail, etc.).
With today's announcement, GE is forming an alliance with commerce giant Pitney Bowes to deploy custom software solutions across its user base, which includes institutions like Wells Fargo and many of the largest telecom and insurance companies in the world. Pitney Bowes will leverage Predix to deliver new apps and services to these clients, driving improved service levels, operational savings, and greater productivity.
With the partnership, Pitney Bowes will use Predix to sell new offerings to customers – but it doesn’t end there. When a customer adopts a Predix solution, they are plugged into a self-referential platform that promises to continue to provide new services as data and insight grows. So if a customer adopts a solution that shows inefficiencies with assets or operations, they will be able to build or co-build applications on Predix to correct the problem. Or at least that is the heady promise from these two companies.
As could be expected from these two massive organizations, the announcement is happening amidst much fanfare: "Our partnership with GE will help accelerate Pitney Bowes' pace of innovation in combining physical and digital solutions to enable commerce. It is an important step in a series of activities we are pursuing across Pitney Bowes as part of our technology strategy. By adding this next generation of data analytics and digital solutions to our hardware products, we will be able to drive more valuable solutions and business outcomes for our clients," said Roger Pilc, chief innovation officer of Pitney Bowes. A heady statement indeed!
Of course, a skeptic would suggest that there is little in here to suggest that this is any more than a feel-good announcement that has a degree of short-term benefit in terms of marketing for the two companies involved. But beyond the spin, there is something very real here. The ground is shifting beneath the feet of both of these organizations, and this partnership is a tacit admission that they will survive and prosper by leveraging data. The actual product specifics of the partnership are very much secondary to what this means on an existential basis.
Beyond the spin, there is a vision for products to come from this deal, however. Pitney Bowes initially plans to offer the following applications on the GE Predix platform:
- Client Services provide insights into asset, application and operator performance that optimize break/fix and preventive maintenance scheduling.
- Productivity Services with analysis of throughput and other productivity metrics drive machine, operator, and factory productivity and efficiency.
- Job Scheduling and Capacity Planning provide tools for efficiently planning and scheduling work according to available assets and capacity.
It will be interesting to see how much is real and how much is marketing in this high-level partnership.
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