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G.E. Makes a Sharp ‘Pivot’ on Digital

G.E. Makes a Sharp ‘Pivot’ on Digital

The New York Power Authority, the nation’s largest state-owned utility, is one of them. The utility is working with GE Digital to build apps that improve the efficiency of its power generation and distribution network. In pilot projects, the partnership has saved or avoided $3 million in costs, said Gil Quiniones, chief executive of the state power authority. The goal is $500 million in savings over the next decade.

But for a technology project to help its customers reduce energy consumption, the state authority went with a start-up, C3 IoT.

Brian Hurst, chief analytics officer at Exelon Utilities, a large electric utility corporation based in Chicago, is also working on early-stage projects with GE Digital. Mr. Hurst said the progress was encouraging and he saw no evidence that the cuts at GE Digital had affected their joint work.

But it is something he is watching closely. “The technology is moving so fast,” Mr. Hurst said. “Today’s players may not be tomorrow’s players.”

GE Digital, Mr. Ruh insisted, is building a business for the long term. Revenue from the Predix portfolio products reached $550 million last year, he said, and sales are growing rapidly. GE Digital’s total revenue of $4 billion also includes all of G.E.’s traditional industrial software, and the unit’s global work force is more than 4,000.

“Our approach is heads-down,” Mr. Ruh said. “We’re going to show you success.”

For his part, Mr. Flannery has consistently declared his support for G.E.’s digital-industrial vision — but that does not guarantee the future for GE Digital. Mr. Flannery is selling off businesses to streamline the company. The lighting and railway locomotive divisions are up for sale, and others could follow.

A smaller G.E. might not need a stand-alone digital unit. Some analysts recommend putting all the software in the industrial divisions, like power and aviation, closer to customers.

“San Ramon shouldn’t exist,” said Scott Davis, chief executive of Melius Research, an independent financial analysis firm.

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