Three Recommendations For GE's Newly Formed Industrial IoT Software Company

General Electric’s announcement of its new venture to house its Industrial Internet of Things software portfolio shouldn’t surprise those who have been closely following the space. After all, in late July 2018, Wall Street Journal reported GE was looking for a buyer for some of its digital assets. Zoning in on IoT, GE’s analytics-focused software, Predix, has roots in the Meridium Asset Performance Management product line. Predix was an area of heavy emphasis and investment by GE’s former chief, Jeff Immelt. The center for research and development for the technology is in San Ramon, California, not coincidentally near software-rich Silicon Valley. GE wanted Predix to not only augment GE’s industrial portfolio in industries like power, aviation and healthcare but also to stand on its own.

It’s fair to say that GE Digital’s Predix initial strategy and positioning is similar to the type of company GE announced today. This time around, the formation of a new company offers GE an opportunity to press the reset button and form a strategy that incorporates what worked, obviates the things that didn’t work and establishes a new path forward given the current state of the Industrial IoT market.

A variety of factors are important for success in the IoT space. The future CEO of the just-formed GE Industrial IoT software company should:

Focus on areas of greatest value to the customer

It’s widely agreed that IoT has value in just about any industry. For instance, process and discrete manufacturers look to IoT to improve process efficiency, offer better worker safety, and gather data from customers that is then used to make better and more useful products. However, the near-infinite potential means it’s also easy to lose sight of building something that offers the most value to either an internal or an external customer. It should also align with an area of core competency to ensure competitive positioning of the solution.

For GE, that is undoubtedly the deep domain expertise across its business units. GE’s expertise in verticals where it does business is hard to replicate and is unique. That’s where GE should build a set of connected solutions that address areas like performance, maintenance, automation and safety. The domain-specific solutions are also an area where economies of scale make GE better positioned to excel than its industrial customers. GE can build it once and offer a solution to its thousands of customers. It wouldn’t make sense for any but its largest customers to consider developing it in-house.

Ensure products have excellent edge computing capabilities

Proponents of edge computing may argue that the edge is even bigger than the cloud. Philosophical debates aside, few would contest that the concept of edge computing, the ability to process and analyze data near the point of generation, is key to any industrial-grade IoT solution. Use of edge computing makes it possible for data generated by ‘industrial things’ to be acted upon in situ rather than be pumped to a data center many miles away. A variety of reasons including performance, reliability, security and cost necessitate this approach.

Industrial assets produce a lot of data. A GE jet engine, for instance, produces 5,000 data points per second – that’s 500GB for a single flight! Edge computing makes it possible to (1) collect high-throughput data and (2) analyze the data to generate something that’s of value to the customer. Technology that handles the influx of data at the edge is still part of a rapidly evolving space. Both traditional and cutting-edge analytics using machine learning have huge potential to bring valuable improvements to how companies operate. GE should offer software-based solutions that generate meaningful insight to effect positive improvements in efficiency, and offer industrials metrics that can empower (rather than replace) employees to focus on higher value tasks that differentiate a business from its competition.

Partner on technology to get to market quicker

IoT technology vendors struggle to find points of differentiation among a sea of IoT companies. Generic nomenclature of “IoT platform” doesn’t help the cause, as anyone shopping around discovers quickly that many different types of technologies self-describe as such. Some have high-value differentiating technology; some peddle technology that is a marginally better mousetrap.

Why is this relevant to GE when it comes to technology partnerships? There are two reasons. For one, a lot of companies out there today won’t move the needle in growing GE’s IoT revenue. GE needs to beware of partnering with companies based on a set of marketing talking points. It’s critical to make sure the technology is complementary both from a feature and an architectural standpoint. For another, GE should not waste time building components of the IoT stack that have already been built and tested by someone else. For example, cloud providers (Amazon, Microsoft and Google) all have some great technology that can serve as a foundation for building IoT applications. Similarly, vendors offer products that excel at the edge capabilities discussed earlier. GE should take advantage of what’s already out there and add value through in-house subject-matter expertise in target verticals, and by tapping into a long list of industrial customers looking to reap the benefits of IoT.

I’m a product manager passionate about the connected future in consumer and enterprise spaces. Currently, I’m a Product Manager working on connected Keurig appliances at...