Is GE Selling Its Digital Business?

Mitch Wagner
7/31/2018

In the trend toward digital transformation, General Electric is the star pupil. The old-line manufacturer of industrial equipment has transformed itself into a technology provider, offering Internet of Things and cloud technologies to manufacturing and other heavy equipment businesses.

That could change drastically, if a report in the Wall Street Journal is true. GE is looking to sell off parts of its digital unit, which produced $500 million or more in revenue last year and lost money, the Journal reported Monday.

GE Digital, the company's software unit based in San Ramon, Calif., was key to the digital transformation vision of former CEO Jeff Immelt, who left last year. He sought to orient the company away from financial and media assets. Under Immelt, GE built Predix software to help customers, including utilities and airlines, gather and analyze data to better manage their equipment. GE Digital became a stand-alone unit in 2015 to distinguish it from GE's industrial divisions, with a goal of becoming a top ten software company by 2020, the Journal reports.

General Electric sign, Fort Wayne, Indiana. Photo by Momoneymoproblemz [CC BY-SA 3.0 ], from Wikimedia Commons
General Electric sign, Fort Wayne, Indiana. Photo by Momoneymoproblemz [CC BY-SA 3.0 ], from Wikimedia Commons


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GE bought ServiceMax in 2016, which provides software for inventory management and workforce scheduling. (See GE Buys ServiceMax in $915M Cloud Play.)

GE declined to comment on the Journal's report; a spokesperson told Light Reading the company doesn't comment on "rumor or speculation."

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lightreceding
lightreceding
8/13/2018 | 9:55:18 PM
Its all over for GED
Their platform was built for internal use. They tried to make it a business but flopped. To expensive, lacking features, too narrow of a focus and poor execution. Most of the people in San Ramon have been laid off. Rue and Flannery keep trying to control the spin. Its too late.
kq4ym
kq4ym
8/13/2018 | 8:17:52 AM
Re: Finances and geography
Moves into IoT seemed to be logical for GE especially to monitor it's own brand of industrial equipment. But, it would seem unless they could move also into the more broad market for those services it would be bound to be a money and resource drain on the company.
Michelle
Michelle
7/31/2018 | 11:53:07 PM
Re: Finances and geography
I thought it was interesting when they became a software company. They sold off a lot of appliance lines already. If they do sell digital, will medical equipment become the focus? I wonder...
Mitch Wagner
Mitch Wagner
7/31/2018 | 4:16:31 PM
Re: Finances and geography
It may have been overreach. It's one thing to say that our business now requires digital expertise - every business now requires that. It's quite another thing to become a software company. 
Joe Stanganelli
Joe Stanganelli
7/31/2018 | 4:13:41 PM
Finances and geography
In addition to the financial losses, I wonder to what extent geography is playing a role -- considering GE's new hub here in the Hub (Boston).
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