GE's digital rethink illustrates demand for specialised IoT
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. I think this demonstrates the trend towards specialised platforms.
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.
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.
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.
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