AT&T has added an important new machine-to-machine (M2M) communications customer in General Electric. The two companies announced a strategic alliance Wednesday designed to scale up GM's burgeoning "industrial Internet." (See: AT&T Adds GE to M2M Roster.)

AT&T Inc. (NYSE: T) is providing General Electric Co. (NYSE: GE) with a complete M2M platform, including connectivity via its 3G and 4G LTE network with global SIMs, cloud services, security, and device sourcing and certification.

For GE, the partnership is designed to create a new industrial Internet, which it defines as ecosystems of connected machines -- such as electric vehicle chargers, lighting systems, and engines -- transferring data and services between one another and their human operators to create efficiencies and productivity enhancements. The company has made $290 million in revenue from its industrial Internet products this year alone.

GE clearly has high hopes for this market; it predicts that the industrial Internet will be produce $82 trillion of output, accounting for half of the global economy, by 2025. Using the big-data garnered from the M2M modules, it says it can help its customers minimize their downtown, increase productivity, lower fuel costs, and reduce emissions. It also announced Wednesday that Cisco Systems Inc. (Nasdaq: CSCO) and Intel Corp. (Nasdaq: INTC) are joining the alliance.

Morgan Mullooly, an analyst at Analysys Mason, called the deal a "hugely significant win" for AT&T. He told me he expects a tremendous number of GE M2M connections to be activated in the next two to three years, strengthening AT&T's position as the US M2M service provider with the most connections.

Right now those connections number more than 15.2 million with 1,500 different types of connected devices on its network. AT&T says it's had a 38 percent increase in M2M customers over the past year.

AT&T is also faring well in two other all-important M2M segments: the connected car and the connected home. This year, Verizon Wireless customer General Motors ended its partnership with Big Red in favor of AT&T, making it a formidable competitor to Verizon, which acquired Hughes Telematics to compete on the road. And AT&T's branded Digital Life connected home offering has expanded to reach 45 markets, with 50 planned before the year's end. (See: Verizon Spends $612M for a Future in Cars and AT&T Adds 6 More Digital Life Markets.)

— Sarah Reedy, Senior Editor, Light Reading