At the same time that General Electric Company (GE) is exiting the financial services business, William Blair & Co. Analyst Nick Heymann says the company is accelerating its expansion into GE Software’s drive to expand data analytics.
“This is really trying to leverage what GE calls the Industrial Internet and their ability to now track real-time data not only for GE’s $1 trillion installed base of industrial products, but for virtually everybody else’s, since their Predix software is now embedded into all of the leading communication companies’ software such as Vodafone (NASDAQ:VOD), Softbank (TYO:9984), AT&T (NYSE:T) and Verizon (NYSE:VZ),” Heymann says.
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GE is going back to its customers and specifically explaining that they can benefit from the performance data from their installed base equipment, Heymann says. He says that the company is also providing recommendations to customers on how to improve profitability by efficiently managing and operating their installed base equipment.
“It looks to be on track to perhaps be a $4 billion business in 2017, and maybe as much as a $15 billion business in revenues by early next decade,” Heymann says. “And these are revenues that are very profitable, in the neighborhood of a 50% EBIT margin, because of their immense impact on improving the customers’ total profitability rather than just profitability related to their installed base of GE’s equipment.”
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