Arik Hesseldahl

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GE Comes to Silicon Valley to Build Software

You’ve probably never thought of General Electric as a software company. And yet, it kind of is. It needs specialized software for its various business units, whether that’s building jet engines, or exploring for gas and oil, or building electronic gear that’s used in hospitals. GE has 5,000 engineers working on this kind of specialized industrial software, and will generate about $2.5 billion in software sales this year, amounting to a little more than 1 percent of its overall sales of $150 billion.

When you think of it that way, you might wonder why GE doesn’t already have some kind of operation in Silicon Valley, where all the world’s best software engineers are. Today, the company is rectifying that with the announcement of a software development center in San Ramon, Calif. It will employ about 400 workers.

The reason, says Bill Ruh, GE’s VP and global technology director — he’s the guy who will run the place — is that the so-called “Internet of things” is becoming a reality. This, Ruh thinks, will morph into something of an industrial Internet, which is directly in GE’s wheelhouse. “We will make our devices more intelligent, which will be driven by software, collect that data, and do some high-end analytics on it, and then drive it to our own people and to our customers,” Ruh told me. He joined GE earlier this year, after almost seven years as a VP at Cisco Systems.

Smart devices, he says, are “table stakes,” but what’s more important is the data they generate, and what you do with it. “At the end of the day, the analytics is where the action will be,” Ruh says.

Here’s an example. GE makes a product called “My Engine,” which Ruh describes as a “Facebook for engines.” If you’re the person in charge of maintaining the engines on a particular plane, wouldn’t it be helpful if you could keep track of its status as easily as you might the drinking and dining habits of your friends on Facebook? Of course, the engine and all its parts would need to have some Internet smarts built in. But once that’s done, there’s a lot of data worth tracking and analyzing about where the planes go, the conditions they fly in, which parts tend to fail or need replacing more often, and so on. From there, it’s a short leap to reorganizing maintenance schedules to be more efficient and less costly.

That’s just one example, and GE has a lot of software that’s specifically geared toward its various lines of business. Out of that, Ruh says, come some “big themes” that will apply to outside customers. “If you look at remote monitoring and diagnostics, that kind of stuff is broadly the same, whether you’re monitoring a wind turbine or a CAT scan machine,” he says. “So we have some horizontal plays that we see coming out of this.”

This is the third new software center for GE in recent years. The other two are near Detroit and near Richmond, Va. Design work on the San Ramon site is under way, and employees will start moving in near the middle of next year.

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