General Electric to Buy Two Tech Startups
November 15 2016 - 11:50AM
Dow Jones News
General Electric Co. said Tuesday it would buy a pair of tech
startups and unveiled several new customers for its GE Digital
business, as the conglomerate seeks to convince investors its
future is as much about software as heavy machinery.
GE said it acquired Wise.io Inc., a machine learning firm in
Berkeley, Calif., and Bit Stew Systems Inc., which enables the
"ingestion" of masses of data for industrial applications. Terms
weren't disclosed. The deals will add about 120 staff to help build
out the product offerings of GE Digital, a software unit with
headquarters in San Ramon, Calif. Company officials said the unit
will generate orders of $7 billion this year.
The deals come a day after GE said it would spend $915 million
to acquire ServiceMax, a Pleasanton, Calif., firm that makes apps
for service functions like inventory management and workforce
scheduling. GE previously invested in ServiceMax, which had raised
more than $200 million, through its venture capital arm.
The acquisitions are helping the company build up Predix, its
software platform aimed at helping industrial customers like
utilities and airlines gather and analyze data to better manage
their equipment and wring out greater efficiencies, said Bill Ruh,
the company's chief digital officer and head of GE Digital. "It
really is about transforming the service business," Mr. Ruh said in
an interview.
GE was already an investor in Bit Stew after leading a $17.2
million financing round in the Burnaby, British Columbia, company
last year. Investors also included Cisco Systems Inc., another firm
that could benefit from Bit Stew's technology, which helps unify
data from disparate operating systems, as well as BDC Capital and
Yaletown Ventures. Wise.io was founded in 2012 by a group of data
scientists, including an astrophysics professor at University of
California, Berkeley. Its technology helps route customer service
requests. Wise.io was backed by venture-capital investors including
Voyager Capital.
GE, like its industrial competitors, is trying to prove to
customers that they can get more life out of heavy machinery—while
avoiding unplanned outages—by using the company's software to
analyze and predict how the machines will perform.
The company's top executives will be discussing the software
business at the company's annual Minds + Machines conference in San
Francisco this week. GE Digital is on track to have about $6
billion in revenue this year, up 20% from last year, Mr. Ruh said.
GE expects to have 20,000 developers working on software designed
for its Predix platform by the end of the year, up from 10,000 in
June.
Among the new customers GE will discuss is Exelon Corp., which
will use Predix software across its fleet of power plants to
analyze the past performance of its assets and to manage
maintenance and downtime.
GE wants to hit $15 billion in software sales by 2020 and the
company says roughly half of that revenue should come from selling
Predix applications to the electricity industry, which is under
constant pressure to improve efficiency in power generation,
transmission and across the electric grid.
Write to Ted Mann at ted.mann@wsj.com
(END) Dow Jones Newswires
November 15, 2016 11:35 ET (16:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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