GE Looking To Sell Digital Assets: Report
General Electric is looking to sell key parts of its digital division as part of its restructuring efforts, according to The Wall Street Journal.
Jeff Immelt, GE's former CEO, established GE Digital as its own business in 2015 in a bid to transform GE into a "digital industrial" company. But following Immelt's resignation last year, his successor, John Flannery, has narrowed the industrial Internet of Things vendor's ambitions significantly.
The Journal reported on Monday that Boston-based GE has retained an investment bank to run an auction for GE Digital, though it's not exactly clear what part of the business is up for sale. Potential buyers include software companies and industrial firms that are looking to invest more in digital efforts.
A company spokesperson said GE doesn't comment on rumor or speculation.
GE's restructuring, which was prompted by a dramatic drop in its stock price last year, has already resulted in plans to sell its ownership stake in gas services company Baker Hughes, as well as spin off its healthcare and railroad locomotive divisions. The company said in late June that it plans to become a " simpler, stronger, leading high-tech Industrial company" by focusing on its aviation, power and renewable energy businesses.
Under Flannery's leadership, GE Digital has cut jobs and scaled back efforts to provide services for a broader swath of industries. Last fall, the company told CRN that it was pivoting its focus from the GE Predix IoT platform, which helps industrial customers collect and analyze data, to applications built on Predix, which includes solutions for asset management, among other things.
Two channel chiefs at GE Digital, Kevin Ichhpurani and Carolee Gearhart, left the company this year to take executive roles at Google. Guy Taylor, an executive who has been with GE Digital since 2016, is the division’s acting channel chief, according to the GE spokesperson.
GE Digital has said that it's looking to grow by exploring a mix of technical, go-to-market and investment partnerships. Most recently, the division announced a partnership with Microsoft to integrate the Predix portfolio with Azure.
Bill Ruh, CEO of GE Digital, told The New York Times in April that Predix-related revenue was $550 million last year while sales were growing rapidly. GE Digital's total revenue was $4 billion in 2017, which also includes sales from GE's traditional industrial software.
Jim Gillespie, CEO of GrayMatter, a Warrendale, Pa.-based GE Digital partner, told CRN that he's not surprised to hear the news, but he's optimistic that the division will continue to be an important partner, whether it remains at GE or is sold to another company.
"We think all of [GE Digital's] solutions are really top-notch," he said.
GE Digital's pivot to an apps-based approach has fit well with GrayMatter's strategy, Gillespie said. At the company's annual Transform conference this week, GrayMatter plans to highlight a case study about how GE Digital's Brilliant Manufacturing software has helped the T. Marzetti Company, a manufacturer of specialty foods, significantly improve its manufacturing operations.
"We're delivering just significant savings to their business, and it's millions of dollars in costs savings," Gillespie said.
About 10 or a dozen GE Digital employees are expected to attend GrayMatter's week-long conference in Ohio, according to the CEO.
"We've got a super strong relationship with GE Digital," Gillespie said. "It's never been stronger."