On the face of it, it’s really not like General Electric, one of the world’s largest companies with interests across huge industries including finance, aircraft engines and healthcare, has anything to worry about.
Indeed, it was one of the founding members listed on the Dow index – and it’s still there – no mean feat after 120 years.
That’s particularly impressive because it’s the only original business that’s still listed there. In fact, as much as sounding like an outstanding success story, that could also make a company feel pretty vulnerable.
GE has a surprisingly diverse portfolio, no doubt one reason it’s staved off business failure where perhaps the now-defunct US Leather Company failed.
However, just as the telecoms providers were sitting pretty 15 years ago with a mobile revolution staring them in the… pipes, OTT utilities are arriving and GE does not want to be the ‘Vodafone of energy’.
Sure we still use telcos, we still need them in many cases, but we don’t want them to come any closer than we need them to.
General Electric took a bit of a punt last year when it announced it’d be putting $1bn into an internal startup, Current, which is focused on using smart technology and data to help huge companies reduce, produce and shift energy use.
Current brings together a number of different GE business units – LED lighting, energy storage, solar, electric charging and analytics software, in the shape of its platform Predix – to help “liberate companies from peak demand usage” and ultimately cuts costs.
Evidence suggests that many consumers aren’t particularly sold on the benefits of the smart home yet, beyond their beloved TV sets, although this is likely to change in the age of smart home metering. But, in the meantime, businesses are finding it increasingly hard to say no to an investment that’ll ultimately help them reduce their overheads.
Where ‘Software as a Service’ took companies like Oracle some time to come around to, ‘Energy as a Service’ is something GE Current is hoping to get its head around quickly enough to keep its century-old brand relevant.
“GE’s aim is to be a digital software company – and a top 10 software company in five to 10 years,” Pete Lau, head of EMEA at GE Current, boldly told NS Tech.
With 330,000 staff worldwide, organisational change must be a mammoth task, but in the “startup atmosphere” created at Current, things are sounding more promising.
“The huge opportunity with the advent of the industrial internet is working out how we connect the digital world to the industrial world. Current is a microcosm for what GE is trying to do, trying to be.”
In a post-product age, the cloud-based Predix platform that captures, stores and analyses data from anything connected to the web, is the real killer app for Current.
“We all have to adapt with the times and while there’s always going to be a big market in GE for tangible sales, software complements this offering, letting us provide more services in the future.”
Not only did Current start with $1bn in revenues from the folded-in business units, and has GE’s balance sheet to fall back on, it’s also launched with top-tier global customers.
That’s Walgreens, Simon Property Group, which runs a host of US shopping malls, Hilton Worldwide, JPMorgan Chase, Hospital Corporation of America and Intel.
All of these companies have huge footprints, meaning massive energy usage and legacy systems scattered across the globe.
Current’s pilots have so far tried to help smooth out city traffic flows, and help emergency services attend to gun-related crimes, using LED street lights and noise sensors, respectively. It’s also offering ‘Finance as a Service’ for companies looking to do things like retrofit with LED lighting.
“The moves that GE is making reflect both the opportunity and the imperative to adapt to a market that is changing now more than it has in the last century,” David Kelnar, head of research at London-based venture capital firm MMC Ventures, explains to NS Tech.
He says that utilities’ tech spend between now and 2020 is increasing 2.5 per cent per year, but software spend is increasing by 8 per cent each year – so there’s a lot of money up for grabs.
“One key area is CRM. Digital customer engagement is rising in importance for utilities because they need to close the gap in customer experience versus other consumer-facing industries, meet regulatory requirements and drive their users towards self-service in order to cut costs.
“This is a period of transformational change, where the industry is expanding to include people who generate energy themselves, as well as those who are now managing their energy more actively.
“In the UK, the ‘big six’ too are trying to change from being energy suppliers to providers of a broader range of products and services,” Kelnar adds.
“When your customers and the market are asking for it, what you see is other huge companies trying to get into it, that’s why IoT is becoming a market trend,” Lau agrees.
As well as competitive efforts within its own industry, and from the likes of Samsung and Intel from a slightly different angle, challenges remain around security and interoperability.
“We’re only six months in but we think we’re very well positioned because of our global reach and our resources,” Lau concludes.
That’s about as bold as you can be when you’re a startup backed by GE.