Government // Enterprise Architecture
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1/11/2012
02:56 PM
Chris Murphy
Chris Murphy
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GE's Huge Software Ambition: 3 Key Takeaways

GE picks Silicon Valley as the best place to innovate a new generation of software aimed at connecting industrial machines.

GE calls it the "industrial Internet." It's about giving machines such as power plant turbines, jet engines, and manufacturing equipment an online connection so they can constantly send back performance information, which is analyzed to automatically alert technicians when there's a problem. GE predicts a multibillion-dollar-a-year business selling software to support this industrial Internet, a business it projects can grow at double-digit rates through 2015.

GE is staking $1 billion on this idea with a new global software center in Silicon Valley, where up to 400 people will build and market software to serve the industrial Internet.

Bill Ruh, a Cisco veteran, joined GE to run the center. Ruh says it took about 10 years for the consumer Internet to evolve, and we're just at the start of another 10-year expansion on the industrial side. "I think this is the next generation of the Internet," he says.

What can you learn from GE's software ambition and its vision for the industrial Internet? As I talked with Ruh, three things stuck out:

1. Silicon Valley's role in software innovation

Why would GE, which could put its software center anywhere in the world, pick one of the most expensive and competitive places to find tech talent? Our 2011 IT Salary Survey ranks the Bay Area as clearly the priciest: $110,000 median pay for an IT staffer, compared with $95,000 in the New York metro region and $84,000 in Detroit. "While it's not the only place, it's the largest concentration of [software development] talent in the world," Ruh says.

GE has a lot of software talent already in its product development and research centers around the world. Many are software specialists focused on an industry such as aerospace or energy. "The thing they don't live and breathe is the innovation and project management in the software industry," says Ruh.

How will GE apply the social media innovation of Twitter and Facebook to an industrial setting? How will it tap the latest thinking at Oracle about big data? Being in Silicon Valley can spur such innovation. "Software isn't a game where you're just trying to reduce costs," Ruh says. "I've seen instances where a team of five produce the same thing as a team of 50 and did it in a better way. You're trying to find the right people, not just people."

[ Want more on IT hiring? Read 8 IT Hiring Strategies of Top CIOs. ]

Most companies won't need to set up their own tech outpost in Silicon Valley, but they do need to stay plugged into the Valley's innovation.

2. The "Internet of things" is getting real

We've talked about this idea for years, but too often it has been cast in space-age consumer terms that weren't wildly compelling. But if software for automated monitoring can keep a power plant running by anticipating breakdowns, that's a powerful business case. This is the kind of software companies will pay for. And they are: GE already has a software business of about $2.5 billion a year.

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ChrisMurphy
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ChrisMurphy,
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1/30/2012 | 10:20:24 PM
re: GE's Huge Software Ambition: 3 Key Takeaways
Your point's a very good one -- they wouldn't want to ignore data they'll later need for analysis. The larger point is that we can start doing more processing at the point of collection, on the edges of networks, and we'll need to when we get into these big data extremes that machines can produce. One simple illustration is an example that i link to above, with AccuWeather. It does processing at the edge of its network (through its content delivery network vendor) to truncate GPS data when a smartphone asks for a weather forecast. If it doesn't do that, the data center thinks two requests 100 yards apart are different, churning through CPUs to get a new forecast, when in fact the weather outlook's exactly the same in both places. With a few lines of code, AccuWeather can drastically cut the amount of processing it needs to do, and the data flowing back and forth over the network.
ANewNickname
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ANewNickname,
User Rank: Apprentice
1/19/2012 | 10:34:07 AM
re: GE's Huge Software Ambition: 3 Key Takeaways
I've got a GE home security system, but GE has apparently abandoned this area. The company which bought this line seems to be new to the world of software and the concept of rapid response to user needs. This is a ripe area for open-source development.
kkrugler
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kkrugler,
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1/18/2012 | 2:49:28 PM
re: GE's Huge Software Ambition: 3 Key Takeaways
The point about "...send back only the bits that are out of the norm..." struck me as odd. When you're using time-series data to predict future problems, you don't know yet what's a good predictor, so you don't know what bits to send vs. toss. And if you view the prediction of problems as something similar to fraud detection, then you can't do much sampling of the data, as the key signals are random and scattered.

Also, if you view a factory/power plant/whatever as something similar to a complex software system, where outputs from one component are inputs to another, then it also becomes hard to know in isolation (on a single device) what bits matter when trying to build a learning model for the system.

So from the description above, it sounds like GE is focusing on the much more narrow problem of embedding detectors in devices that "phone home" when they're pretty sure something is out of whack.
Jim C, Orlando
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Jim C, Orlando,
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1/17/2012 | 5:31:31 PM
re: GE's Huge Software Ambition: 3 Key Takeaways
Actually, the consumer market already has GM's OnStar and home burglar alarm monitoring.
The analytics could start out pretty basic similar to any dashboard -- you just have to figure out the green, yellow and red zones. The statistics for figuring out in control vs. out of controll industrial conditions (control charts) were pioneered by Shewart and Deming almost a century ago. With GE's engineering background and six sigma expertise, they should have a pretty good idea about at what value equipment is out of specifications and at what value it is dangerously out of spec.
ChrisMurphy
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ChrisMurphy,
User Rank: Author
1/12/2012 | 11:01:23 PM
re: GE's Huge Software Ambition: 3 Key Takeaways
Agree, and you can include GE on this list of companies that have been doing this for years. But it's about where this is headed. The pace of change the next 5 years will be a lot faster in this arena than the past 5 years. Wireless capabilities, cheaper sensors, cheaper point-of-collection processing, better analytics -- those forces will open up entirely new options for collecting industrial data and doing predictive analytics than have been possible. In 2006, you could've said Salesforce has been doing cloud computing for years, what's the big deal? But it was in the next five years that the explosion of new uses of cloud apps (and infrastructure and development platforms) really took off.
bblair495
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bblair495,
User Rank: Apprentice
1/12/2012 | 7:16:36 PM
re: GE's Huge Software Ambition: 3 Key Takeaways
What am I missing? Companies such as Infor, IBM, Rockwell and even small players like ShopLogix have been doing this for years?
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