To understand why General Electric is plowing $1 billion into the idea of using software to transform industry, put yourself in the shoes of Jeff Immelt, its CEO.
As recently as 2004, GE had reigned as the most valuable company on the planet. But these days, it’s not even the largest in America. Apple, Microsoft, and Google are all bigger. Software is king of the hill. And, as Immelt came to realize, GE is not that great at software.
Internal surveys had discovered that GE sold $4 billion worth of industrial software a year—the kind used to run pumps or monitor wind turbines. That’s as much as the total revenue of Salesforce.com. But these efforts were scattered and not always state-of-the-art. And that gap was turning dangerous. GE had always believed that since it knew the materials and the physics of its jet engines and medical scanners, no one could best it in understanding those machines.