Credit: Shutterstock photoGeneral Electric Company GE has made no secret of its ambitions to rule the Industrial Internet space, the industrial avatar of the famous "Internet of Things" (IoT). Challenging the leading player in the cloud computing market, Amazon.com Inc. AMZN , GE is launching its first hosted cloud service, Predix Cloud - a service crafted specifically to handle industrial data and applications.
Predix Cloud - a version of its Predix machine data analytics software - has been designed to handle the types of data generated by jet engines, MRI scanners, power generation gear, and other heavy-duty machines.
The move emphasizes the importance of IoT for some of the world's largest companies. GE expects revenue of $6 billion from software in 2015, a phenomenal 50% growth from $4 billion generated in 2014. Most of this is attributable to a pattern-finding system called Predix.
The Predix Platform
Offered as a platform-as-a-service (PaaS), Predix Cloud is designed to manage, analyze and store industrial data in real-time. All that real-time streamed data can actually be used to provide insight for better and faster decision-making, and correct anomalies and fix glitches right away. The Predix cloud is expected to offer advanced tools like asset connectivity, machine data support and industrial-grade security and compliance.
The cloud, which is currently in beta test in certain parts of GE, will be rolled out to other corporate groups by 2015 end, and will be opened to external customers next year. It is primarily aimed at globally regulated heavy industries such as aviation, healthcare, transportation and energy.
The Predix Cloud builds upon the Pivotal Cloud Foundry platform for application development and deployment. Two years ago, GE bought a $105 million stake in Pivotal, a joint venture by EMC Corporation EMC and VMware.
Predix Cloud will be offered through an on-demand, pay-as-you-go pricing model.
Tempting Hackers?
GE is explicitly targeting the industrial market - which includes some of the highest value companies in the world with highly sensitive information. Consequently, GE might just be creating the most appealing jackpot for hackers in the history of cloud computing, and this fact has not been lost on the conglomerate. In fact, it has made security a primary selling point for the cloud.
In contrast to Amazon's AWS service, which is a public cloud infrastructure accessible to all, GE's Predix Cloud is a "gated community" of industrial users. Furthermore, GE has baked in what it is referring to as "software-defined mortar" to each layer of the cloud stack. This method isolates each layer of an application in order to observe and limit the data that each layer can access. This promises superior visibility for detecting and isolating threats, and checks any data loss.
Of course, the extra security layers and custom features consume more processing power, thus increasing the cost involved.
The Industrial IoT Market
The Predix Cloud launch comes two years after GE made its first major thrust into the Industrial IoT with its data analytics platform Predix. The platform was built in collaboration with Amazon Web Services, Accenture and EMC's Pivotal, and was intended to offer a common architecture for industrial users to connect sensors, smart machines and analytics.
Three years ago, GE projected that connecting these big machines could increase global GDP by $10 trillion to $15 trillion in 20 years. It also predicted that it expects over 50 billion machines to be connected to the Internet by 2020. These are impressive figures with huge potential upside, and justify GE's decision to bolster its digital and analytical capabilities and invest about $500 million in software annually.
GE presently holds a Zacks Rank #3 (Hold). A better-ranked conglomerate that looks promising is Koninklijke KPN N.V. KKPNF , carrying a Zacks Rank #2 (Buy).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
