William Ruh, the vice president of G.E.’s software business.Credit Peter DaSilva for The New York Times
General Electric is making its big data business a lot bigger.
In October, G.E. announced that its four-year-old project to capture and analyze lots of information from the machines it sells and turn that information into insights about how to run the machines better, already had revenue over $1 billion a year. Now the company is on the verge of a partnership to sell the service to other industries, in the United States and abroad.
The first partner, SoftBank, will initially focus on things like manufacturing and shipping in Japan, according to William Ruh, the vice president of G.E.’s software business, and will very likely go to other businesses in Japan and sell the G.E. service, called Predix, elsewhere in Asia.
“This is a watershed,” Mr. Ruh said. “You’ll hear about more of these deals in the next six months.”
So far, G.E. has applied the data collection and analysis business — which consists of measurement sensors on machines that deliver data to large analysis systems — in aviation, power generation, health care, railroads, and oil and gas production.
G.E., one of the world’s largest industrial manufacturers, makes machinery for all of these industries. Data analysis and optimization, it estimates, is a service that G.E. can incorporate with these machines to eventually generate an additional $4 billion to $5 billion in annual revenue.
The deal with SoftBank indicates that G.E. wants to earn much more from software and services down the road. “We have a generic capability for insight and optimization here,” Mr. Ruh said. The potential market, he said, is “any business with a piece of equipment you are trying to optimize.”
Besides the analysis capability, G.E. also hopes to sell know-how in building software applications for optimizing different machines. Terms of its revenue-sharing deal with SoftBank were not disclosed.
SoftBank, a Japanese company that has made investments in Japan, the United States and China, among other countries, is a noteworthy first partner. The company has extensive business as a telecommunications service provider, meaning it can already carry data from sensors to the analysis computers.
That indicates that future partnerships are likely to be with service providers. Cisco Systems, a maker of networking gear, has already worked with G.E. to install Predix on oil and gas platforms, but may be less involved in building out a bigger joint business.
Cisco has made announcements of its own regarding networking and operational efficiency in what it terms “the Internet of Everything,” or connected devices that can be analyzed to improve revenue or efficiency.
Future deals for G.E., Mr. Ruh said, are likely to be in developed nations, and in growing economies “where the idea of an asset being down is unacceptable.” Besides things like power networks, these assets could include telecommunications systems, including Internet connectivity itself.
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