While the Internet of Things can give a company a massive influx of information, it then faces the problem of wrapping its corporate arms around all that data to make meaningful use of it.That is where General Electric, the fourth-largest company in the world, is hoping to come into play.
US conglomerate General Electric has announced it wants to join the cloud party with the launch of its own fluffy white stuff.GE said it wants to capitalise on the 50 billion machines estimated to be connected to the internet by 2020; the so-called “Internet of Things” economy.The conglomerate describes itself as a “digital industrial company” focused on aviation, energy, healthcare and transportation.
The Internet of Things started in the mid-1990s, when a quirky young brand manager in the U.K. puzzled over why a shade of brown lipstick kept disappearing from store shelves.
The story matters because the Internet of Things, or IoT, has become prodigious yet ephemeral, as difficult to grasp and explain as the Holy Spirit. Cisco CEO John Chambers declared that IoT will generate $19 trillion in profits, which isn’t helping because, frankly, when you cite such an unfathomable number it’s hard not to sound like you’re pulling it out of your ass. Cisco, General Electric and swarms of startups have hitched their futures to IoT.
CNBC’s Morgan Brennan reports on software developed by General Electric catering to the industrial revolution.
For more than a century General Electric made most of its revenue by selling industrial hardware and repair services. But in recent years GE was at increasing risk of losing many of its top customers to nontraditional competitors—IBM and SAP on the one hand, and big-data start-ups on the other. Those competitors aimed to shift the customer value proposition away from acquiring reliable industrial equipment to deriving new efficiencies and other benefits through advanced analytics and algorithms based on the data generated by that equipment. The trend threatened to turn GE into a commodity equipment provider.
Siemens is challenging General Electric’s bid to buy Alstom, setting up a trans-Atlantic power struggle that could either create a new supergiant in smart grid technology, or be scuttled by regulatory and political pressure.
That’s the latest update from Paris, where talks over the fate of the French power, train and grid giant were disrupted by Siemens’ offer of a cash and asset-swap deal valuing Alstom at 10 billion to 11 billion euros ($13.8 billion to $15.2 billion).
John McDonald, director of technical strategy and policy development at General Electric, gave the introductory lecture for the Building Research Collaborations: Electricity Systems Workshop at the Burton K. Morgan Center at Discovery Park this morning.
Catching up on the smart grid news of note, let’s start with one of the biggest acquisitions in years for French grid and power equipment giant Schneider Electric: its $5.2 billion takeover of U.K.-based industrial controls giant Invensys.
We covered the news of Schneider’s potential purchase of Invensys early last month, along with speculation that other competitors, including Emerson, Siemens, General Electric or ABB, might make counteroffers. But those competing bids failed to emerge, and last week, Schneider agreed to buy the company at a price of 502 pence a share, or £3.4 billion ($5.2 billion), with the deal expected to close in the fourth quarter of this year. Bloomberg reported this week that Schneider plans to solicit a £2.56 billion ($3.6 billion) loan to help pay for the acquisition.
General Electric Co. has won a $200 million deal to make 4 million smart meters for Commonwealth Edison Co. as part of the electric utility’s grid modernization program.
ComEd, a unit of Chicago-based Exelon Corp. (NYSE: EXC), plans to install the meters beginning this September through 2021.
Most analysts have written off the North American smart meter market for the near- to mid-term. The good news: there are still some big deals to find, as this win by General Electric demonstrates.
The bad news: Deals of this size take years (no exaggeration) to close. And when they finish, they are typically winner take all. European utilities tend to source from multiple suppliers, to hedge their bets and spread both risk and reward. But in North America, a vendor can spend tens (sometimes hundreds) of thousands of dollars over 12, 18, 24 or more months, only to get absolutely nothing.