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 email@example.com
(END) Dow Jones Newswires
November 15, 2016 11:35 ET (16:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.