June 19, 2013, 3:20 PM — As if GE doesn't already have enough on its plate, the company entered the cloud computing marketing this week, announcing plans to provide cloud-based analytics services for its industrial customers.
The move reinforces a couple of major themes across the industry, including a growing trend by both providers and end users to capture and actually get some value from the massive amount of data generated by their companies, machines and other sources. It also shows how providers are increasingly offering services tailored specifically for certain vertical markets, in this case industry and manufacturing. And finally, in announcing the product in conjunction with partners Amazon Web Services and new analytics firm Pivotal, GE is showing how it can use technologies from others and package them as a service.
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GE has two major products, one being its Predictivity line, which will provide real-time data analytics across a company's network, while Proficy Historian HD is a separate service based on open source Apache Hadoop to provide historical analysis. GE is aiming the services at the customers to which it already supplies heavy machinery and manufacturing goods and services. This software packages can help businesses make decisions about what sorts of products should be made and how, for example. "It is only in the ability to quickly analyze, understand, and put machine-based data to work in real-time that points us to a society that benefits from the promise of big data," GE Vice President of global software Bill Ruh said during a release party on Tuesday. "This is what the Industrial Internet is about."
Industrial companies have a lot to gain from big data analytics because they have so much data, experts say. Companies across a variety of industries are dealing with the rise of machine-to-machine, batch data and making actionable business decisions based on it, says Wikibon analyst Dave Vellante. Wikibon estimates that Industrial Internet Technology spending will balloon from $20 billion this year to $514 billion by 2020 as more companies rely on data to drive business decisions in sectors from manufacturing to health care, transportation and utilities. The key, he says, will be architecting systems that are able to capture data, and bring it to the cloud and provide actionable intelligence based on it.
As for how the system will technically work, Ruh says GE will work with customers to architect solutions that run in the public cloud, such as Amazon Web Services, or on customers' own premises to solve the issue of data migration.
Werner Vogels, AWS's CTO who appeared at the announcement, says the company is already providing the infrastructure "building blocks" to support these services. Existing AWS customers can layer GE analytics services on top of data stored in Amazon's cloud, for example.
Paul Maritz, the former VMware chief who is now heading the new spinout from VMware and EMC named Pivotal, says his company's Hadoop-based analytics technology will be baked into the offering as well.
GE is taking the quickest path to releasing these services with partners, instead of developing it all in-house. That's a very different approach than had the company used open source technologies like Apache Hadoop and cloud IaaS platform OpenStack to build this offering itself. Vellante, the Wikibon analyst, says that's a natural move for the company though, since running large-scale data centers to host a cloud offering is not in GE's expertise. Using cloud-based resources to host this software allows GE to focus on building the software for customers, and not have to worry about the infrastructure to support it. "This is another boost for the cloud and big data," Vellante says.
Perhaps this news shouldn't be all that surprising though, given that just a few months ago GE announced that it would be making an investment worth more than $100 million in the new Pivotal Initiative. GE's successful rollout of analytics software for its customers could be a positive first sign for the newborn Pivotal. If anything is surprising, it's the speed with which GE was able to turn around a product offering.
That speed to market could be important for GE because it has some catching up to do with its biggest competitor in this market: IBM. Jeff Kelly, another Wikibon analyst, says Big Blue has about a five-year head start on GE after it launched its Smarter Planets initiative in 2008. "Expect the two companies GE and IBM to battle it out to lead the Industrial Internet market in the years ahead," he says.
The winners in all this will undoubtedly be businesses that finally have some tools to manage and get insights from this wave of new data.