With Pivotal Investment, GE Takes on IBM to Win the Industrial Internet

Then-CEO Sam Palmisano launched IBM’s Smarter Planet initiative five years ago during a speech at the Council on Foreign Relations. IBM would focus its energies, Palmisano said, on helping governments and companies understand and analyze the voluminous data streaming off connected devices and industrial equipment to improve operational efficiencies and deliver better services to citizens and customers.GElogo

Since then, IBM has largely had the Industrial Internet, as the concept of has come to be called, to itself. The company’s Smarter Planet division has played a key role in making IBM the biggest Big Data company on the planet and was a lone bright spot in IBM’s otherwise disappointing Q1 2013 results.

But IBM now has some serious competition to consider in the form of General Electric. GE, the worlds largest maker of industrial equipment, announced a $105 million investment in Pivotal, the new Big Data company formed by EMC and VMware. The investment gives GE a 10% stake in the new company and the two (GE and Pivotal) will collaborate to develop and deliver analytics software and services to GE’s industrial equipment customers.

The investment and collaboration gives GE access to the IP and technologies it will need to realize its vision “to develop a new generation of intelligent systems that can predict and respond to changes,” as GE’s Bill Ruh put it in 2011 upon the launch of a new global software center focused on Big Data and analytics. Said Ruh:

“These digital offerings will harness and automatically analyze the petabytes of data that are generated by industrial equipment to help our customers get the most value from their assets. All of this activity will occur on the ‘Industrial Internet,’ a living network of intelligent machines and systems.”

The market opportunity presented by this new world of interconnected, intelligent devices is enormous for both industrial equipment manufacturers and Big Data technology companies. By joining forces with Pivotal (and by extension EMC and VMware), GE just became both. While it will take some time for GE to build out a comprehensive portfolio of analytics software offerings across its varied lines of business (medical, aircraft, consumer appliances, etc.), the company is well positioned to take on IBM in the competition to win the Industrial Internet.

It’s also important to remember that the opportunity presented by the Industrial Internet is not limited to increasing IBM and GE’s market valuations. Billions of people, particularly in the developed world, are struggling with limited access to clean drinking water, rising air and noise pollution, crumbling infrastructure and myriad other challenges. With the global population forecast to top 8 billion by 2025, these pressures are only going to increase. Harnessing data to address these challenges and improve the lives of real people is the other major opportunity of the Industrial Internet.

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  • Sundar

    I can’t believe how analysing the reality which is a common knowledge can solve the real problems faced by human kind! Well these companies will surely be able to provide currency notes to feed the future generation deprived by water , clean air and non-poisoned food !

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  • http://www.incion.com/ profesional web design

    Amazing write-up! Awesome Post.

  • greg

    maybe they’ll just ration your share.

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  • returnofthemus

    Not sure I’d view it quite as dramatically, though it does give GE an opportunity to leverage some of its inhouse expertise without all of the risk.
    However, Big Blues recent $2Bln intention to acquire should demonstrate they are not resting on their laurels and even if GE were competing to win, I don’t imagine they’d be that far behind.

  • GDMFERCSMF

    Hi returnofthemus (wierd FHHUKIN nickname…..). Don’t pretend to know anything about it. I know who you are, what you do, and where you live…. Watch the FFUUUHHHKKK out CHHOCKSUHHKER!