GE Sells Efficiency as a Service : Smart Machines Shed the Downtime
GE shows potential in $20 billion productivity boost behind Industrial Internet, demonstrates how the movement will change human behavior and “unleashes” the power of the workplace through intelligent machines.
There’s a great story about the Industrial Internet, what it can do and how it will carry us into the future. In fact, there’s millions of great stories, each demonstrating the vast and creative ways in which machines are already helping our lives. We’re all becoming a little smarter, a smidgen more efficient and a whole lot more productive. The Industrial Internet will once again shift our concept of time, reconfiguring the work week and enhancing our use of space. We’ll become more opportunistic through machines’ ability to speak with one another, giving off a buffet of data we’ll use to make our interconnected world even better.
That’s the story General Electric tells, with every example of how its products and services are spawning the Industrial Internet. GE, involved at varying levels of the Industrial Internet market from product design to distribution, has taken up the task of educating the world about the Industrial Internet. You’ve seen the commercials (here’s one if you haven’t – embed below).
GE’s excited about the Industrial Internet for good reason.
According to a new report by Gartner, the rise of the Internet of Things will propel the global IT industry past the $3.8 trillion mark in 2014. The firm estimates that “new” types of connected devices, such as tablets, smart TVs and embedded sensors, will account for more than 80 percent of overall device spending by 2017.
GE’s got its own proof, sharing a case study today that tells the compelling story of one company’s extreme boost in productivity — by $20 billion. GE tells the very human story of our evolving behavior:
“A gas turbine service manual can clock in at 1,000 pages, about the length of a small-type version of War & Peace. Crews often haul the tomes from one remote location to another to do maintenance work. They travel on a set timetable and lack real-time information about the condition of the turbines. “If they come too late and failure occurs, unplanned downtime can cascade across the system and affect the economy,” says GE Chief Economist Marco Annunziata.
But there is a better way. Soon workers will be able to store and access maintenance information on simple handheld devices, brainstorm repairs with colleagues, and even monitor and talk to the turbines themselves. Annunziata and Peter C. Evans, director of global strategy and analytics at GE, just released a new report titled Industrial Internet@Work, which is making a case for a new way of unleashing the power of information in the workplace. They found that time and money “wasted largely due to deficiencies in how information is gathered, stored, accessed and shared” on servicing machines serving just a handful of industries could amount to more than 300 million man-hours, or $20 billion per year.
Annunziata and Evans write that the Industrial Internet, which brings together the digital and machine worlds, could help people work more efficiently and productively with machines, allow them to collaborate and share information faster, and profoundly transform the workplace. They say that ‘a key feature of the Industrial Internet is that information itself becomes intelligent. When workers need it, information will find them—they will not need to hunt for it.’”
GE’s big plan for the Industrial Internet: devices + partners
Having invested several millions in the Industrial Internet movement, teaming up with EMC to power the IT solutions, GE has its own motives for sharing these real world stories. The complexity of connected machines will be in high demand by corporations seeking out consumer-friendly automation, touching both the enterprise and consumer markets. Like connected devices, Big Data is driving IT spending across the globe. This increase in software-ready hardware means continued profits for GE and its peers, selling Services to manage the machines’ networking, updating its interfacing, and providing analytics on all that data they’re throwing off. The Industrial Internet cannot happen without the reasonable application of our increased connectivity, that is, machines must be intelligent enough to influence our decisions.
Wikibon analysts believe that the analytics market will be worth more than $47 billion by 2017, compared to $11.59 billion in 2012. And a recent report from IHS predicts that the number of internet-connected video devices will exceed the world’s population in four years’ time. The category will expand to 8.2 billion units in 2017, up 90 percent from 4.3 billion in 2013.
Selling efficiency as a Service
GE will be a benefactor of the rise in devices, and the demand for user-friendly analytics. As one of the companies designing and producing the devices powering the Industrial Internet, GE is in the process of virtualizing its core business. With a recent investment in Pivotal, GE is also choosing its partners to broaden its goals in commercializing connectivity.
“Not only is GE allowing a zillion smart-machine flowers to bloom, but it’s vision is to use the data from these machines, not in isolation, but in aggregate to create value for its customers and improve the lives of individuals, corporations, governments and humankind in general. That’s big. Supply chains. Health. Instrumenting infrastructure. Supporting the build out of massive cities in growth regions. It’s mind boggling big,” writes Wikibon Co-founder and Lead Analyst, Dave Vellante.
“By leveraging the Pivotal platform, GE gives the company instant differentiation from all the other platforms out there. Sure Cloudera and Hortonworks and IBM and Intel and Fujitsu and all the other platform companies have plays with the industrial internet – but if you had to pick one single partner in this space it would be General Electric – a $140+B monster that powers industries like energy, health care, consumer, transportation and finance.”
Eliminating the “downtime” of consumer-facing machines is quite an undertaking, but GE is among those most capable to succeed at a large scale. Shifting the strategies of IT into the consumer space was bound to happen at some point, but managing the transition has been an exhaustive process for the enterprise. Soothing the consumer and enterprise ends of this juncture is how GE plans to set new standards with the commercial web, selling efficiency as a service.
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