Upstart Poaches GE Executives as It Chases Predix Customers

By Ted Mann 

As General Electric Co. looks to shed parts of its software unit, smaller competitors see an opportunity to challenge the conglomerate in a business it had hoped to dominate -- using data to improve the performance of industrial machines.

One startup, Uptake Technologies Inc., has hired several executives from GE this year as it chases after GE's existing customers. In February, the company hired Ganesh Bell, GE's first chief digital officer, as its president. The company has also poached Jay Allardyce, the chief product and marketing officer at GE Digital, and Scott Bolick, formerly head of software strategy at GE's power business.

The Chicago startup is one of several looking to use industrial data culled from sensors embedded in machines like wind turbines and locomotives. It was started in 2014 and was valued at $2 billion in a venture funding round last year. The firm's customers include Berkshire Hathaway Energy, for which Uptake helps crunch data from wind farms, and Progress Rail, a subsidiary of Caterpillar, Inc. which is GE's chief rival in the freight locomotive business.

Another competitor is C3 IoT, which is run by Thomas Siebel, who sold his previous business software company, Siebel Systems to Oracle Corp., in 2006. C3, which has raised more than $300 million in venture capital, has signed up John Deere, 3M and others as customers.

Such upstarts are betting that GE and former CEO Jeff Immelt were right that the ability to gather and analyze vast amounts of data would create a market for software applications among the operators of power plants, freight railroads and airplane fleets.

But the small firms are betting that software companies -- not manufacturers of the machinery themselves -- will control the business. "GE's vision was right," Mr. Bell said in a video aimed at early adopters of GE's software, called Predix. But he added that his company is "fiercely independent" of equipment makers like GE and Siemens.

GE and rivals like Siemens AG say they aren't ceding ground. GE Chief Executive John Flannery wrote in a blog post last week that GE Digital remains "a critical piece of how we solve industrial problems for our customers -- by building software and other digital tools for power plants, airlines, hospitals and other industrial customers."

GE says it will continue to use its Predix software platform to improve operations within its industrial businesses, and as an offering to customers. The company says it has 1,000 Predix customers, and that Predix revenue doubled in 2017.

Last week, Siemens agreed to pay 600 million euros ($730 million) in cash to acquire Boston-based software firm Mendix Inc. The company makes "low code applications" that support rapid deployment and use of applications in the cloud.

Write to Ted Mann at [e-mail]

(END) Dow Jones Newswires

August 08, 2018 16:28 ET (20:28 GMT)

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