Remember meForgot password?
    Log in with Twitter

article imageOp-Ed: GE learns that IoT doesn't scale as it rethinks digital strategy

By James Walker     Sep 11, 2017 in Technology
GE faced troubles last week as its stock slipped amid concerns its digital transformation isn't paying off. GE is finding it can't scale industrial IoT, its most important emerging service. This demonstrates the trend towards specialised platforms.
GE's stock fell by above 3 percent last week after J.P. Morgan analyst Steve Tusa said it should be priced "in the high teens." His comments, described as an "adjustment to reality," alarmed investors who are already realising GE's transformation isn't going as planned.
Six years after it announced its digital intentions, GE is yet to develop a readily actionable vision. Its interest in industrial IoT has been tempered by a realisation the tech doesn't easily scale. As it cuts cash, restructures its digital division and streamlines its operations, GE's learning the digital economy is very different to traditional industry.
The company's preparing to narrow its customer focus and more precisely target its products. It intends to stop trying to sell Predix to new industries. It will stay closer to the fields where it's already observed success, such as aviation and energy.
The company has also backtracked on its plan to build its own cloud network. Predix now runs on infrastructure from Microsoft and Amazon, reflecting GE's realigned ambitions.
READ NEXT: GE to tighten grip as it tries to refocus on digital industry
GE's experiences demonstrate a fundamental reality about the Internet of Things. While the concept of a generic, all-encompassing cloud is initially appealing, in practice customers need products specific to their industry. GE has found that Predix isn't the catch-all IoT platform it envisioned. It has succeeded in some industries but fallen flat in others with a different set of requirements. IoT in energy works differently to IoT in farming. The fundamentals might be similar but the implementations are clearly separately specialised.
As more tech companies come to realise this, there'll be a rush to specialise IoT platforms towards different businesses. Goliaths such as Predix are already finding themselves out of favour, overshadowed by smaller platforms capable of linking together. GE is finding itself unexpectedly stuck within the industries Predix suits best, primarily energy providers in oil and gas.
In many ways, the movement is similar to the emergence of the Internet. Future IoT platforms will be numerous and specialised to their applications, like the scores of websites online. They'll be seamlessly networked together, allowing data to flow through the different services and between individual edge nodes.
Contrary to GE's original vision, there won't be space for overarching centralised platforms like Predix, unspecialised and primarily walled off. GE is now being forced to face this reality, realising it risks being side-lined in the rapidly growing IoT industry. The company expects the market to be worth $225 billion by 2020, an opportunity it doesn’t want to miss. Right now, it's still missing its target though, failing digital transformation by not first appreciating the real problem.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
More about General electric, GE, IoT, internet of things, digital transformation
Latest News
Top News