G.E., the 124-Year-Old Software Start-Up

By Aarthi Rayapura August 31, 2016

By Steve Lohr

It may not qualify as a lightning-bolt eureka moment, but Jeffrey R. Immelt, chief executive of General Electric, recalls the June day in 2009 that got him thinking. He was speaking with G.E. scientists about new jet engines they were building, laden with sensors to generate a trove of data from every flight — but to what end?

That data could someday be as valuable as the machinery itself, if not more so. But G.E. couldn’t make use of it.

“We had to be more capable in software,” Mr. Immelt said he decided. Maybe G.E. — a maker of power turbines, jet engines, locomotives and medical-imaging equipment — needed to think of its competitors as Amazon and IBM.

Back then, G.E. was returning to its heavy-industry roots and navigating the global financial crisis, shedding much of its bloated finance arm, GE Capital. That winnowing went on for years as billions of dollars in assets were sold, passing a milestone this summer when GE Capital was removed from the government’s short list of financial institutions deemed “too big to fail.”

But in 2011, G.E. also quietly opened a software center in San Ramon, Calif., 24 miles east of San Francisco, across the bay.

Today one of San Ramon’s most important projects is to build a computer operating system, but on an industrial scale — a Microsoft Windows or Google Android for factories and industrial equipment. The project is central to G.E.’s drive to become what Mr. Immelt says will be a “top 10 software company” by 2020.

Silicon Valley veterans are skeptical.

“G.E. is trying to do this the way a big company does, by throwing thousands of people and billions of dollars at it,” said Thomas M. Siebel, a technology entrepreneur who is now chief executive of C3 IoT, a start-up that has done work for G.E. “But they’re not software people.”

The San Ramon complex, home to GE Digital, now employs 1,400 people. The buildings are designed to suit the free-range working ways of software developers: open-plan floors, bench seating, whiteboards, couches for impromptu meetings, balconies overlooking the grounds and kitchen areas with snacks.

Many industries see digital threats, of course. Yet the scope of the challenge is magnified at G.E., a 124-year-old company and the nation’s largest manufacturer, with more than 300,000 employees worldwide. Employees companywide have been making pilgrimages to San Ramon for technology briefings, but also to soak in the culture. Their marching orders are to try to adapt the digital wizardry and hurry-up habits of Silicon Valley to G.E.’s world of industrial manufacturing.

G.E.’s success or failure over the next decade, Mr. Immelt says, depends on this transformation. He calls it “probably the most important thing I’ve worked on in my career.”

Apparently, there is no Plan B. “It’s this or bust,” he said.

Read the full article at: www.nytimes.com

And read Zuora CEO Tien Tzuo’s piece on the biggest business transformation of our times – It’s Not a Software Story, It’s a Business Story