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Summary:

To stay relevant and to continue GE’s move beyond hardware into software, GE is looking to make relationships, investments and even acquisitions of Valley software analytics startups. The conglomerate is holding a splashy event, and launched a competition, in San Francisco to get that point across.

What can a connected GE jet engine tell you?

The massive jet engine that GE propped up next to the stage at its Minds and Machines event on Thursday morning, in the Dogpatch area of San Francisco, was symbolic of a few things for GE. It’s the kind of old-school technology that GE makes, but which it wants to increasingly add software and analytics too; it illustrates GE’s willingness to spend a lot to make a splash in the startup-rich region; it’s also a technology which is pretty alien to the multitude of web and mobile startups that call the San Francisco, Bay Area home.

The latter is the gap that GE is looking to bridge. GE is hoping to increasingly embrace software, data and analytics startups, and convince the elite software architects of the Valley why using their skills to make money off of “the industrial internet” — GE’s term for a combo of the Internet of Things meets machines — is a good idea.

To get that message across, GE announced a competition during the event called “Industrial Internet Quests,” which calls on developers, data scientists and designers to make algorithms and applications that can increase productivity for the health and aviation sectors. Those are some of GE’s major customers.

“If you want the right 300 [software] people, you have to come here,” said GE’s CEO Jeff Immelt, in conversation with Valley pioneer and investor Marc Andreessen, to a room full of media, and startup execs. Andreessen called GE’s commitment to partner with Valley entrepreneurs and software engineers as “a big deal.”

GE has thousands of its own software engineers — 5,000 specifically, said Immelt — and a new lab that will focus on software in New York. But GE also wants to make equity investments in software and data startups and also is looking to make acquisitions. Though, Immelt said “I’d rather acquire the people than the companies.”

Andreesseen said while corporate venture capital investing has gotten a bad rap — or has delivered “stupid money” as Immelt joked — the process should be more about learning and making connections in the ecosystem, rather than making large returns.

Why does GE care or need the Valley’s best software minds? At the end of the day, it’s a way for GE to stay competitive and relevant and continue to extend its business beyond hardware. Immelt, who calls himself “a student of productivity,” said productivity starts with hardware improvements, but that’s not enough — you need software and analytics to add those extra productivity percentages, said Immelt.

And that’s where GE wants to make its future revenues from for its newly marketed “industrial internet.” The one percent efficiency savings for things like jet engines, rail roads, locomotives, and power plants will come from analytics. It’s not sexy — particularly compared to projects like the Jawbone UP, which Andreesseen (who’s a Jawbone investor) showed off during the discussion — but it makes money. And as a side benefit, also delivers planet-friendly energy efficiency.

Immelt’s main point of the morning? When it comes to analytics startups in the Valley: “we’re open for business.”

  1. Awful post, evidently written by a complete ignoramus.

    1) Aircraft engines are not “old-school technology.” In fact, aircraft engines are among the world’s most advanced applications of state-of-the-art developments in physics, engineering, and materials science. There’s not much out there that could possibly be more high-tech.

    2) “a technology which is pretty alien to the multitude of web and mobile startups that call the San Francisco, Bay Area home” is ridiculous. There are thousands of people in the valley who are involved in hardware design and manufacturing for mobile devices, PCs, servers, autos, avionics systems, audio, video, consumer electronics, and almost everything else that uses semiconductors and microprocessors.

    3) “The one percent efficiency savings for things like jet engines, rail roads, locomotives, and power plants will come from analytics. It’s not sexy — particularly compared to projects like the Jawbone UP.”

    Are you serious? You think Jawbone UP is sexier than designing jet engines that produce 115,000 lbs of thrust and trains that go 250 mph?

    Jet engines, railroads, and power plants are FAR more important to the global economy than some get-rich-quick VC’s silly portfolio play. The author would not have been able to write this useless post without any of these.

    More to the point, a 1% efficiency increase, in any of these sectors, while not especially ambitious, still means real, tangible results – less pollution, less demand for natural resources, less waste, greater power reliability.

    At a time when the roads, airports, power plants, public utilities, and trains in the US are worse than many third world countries, including almost every piece of infrastructure in California — among the many other serious problems we have that can be solved by talented engineers — the last thing we should do, this blog included, should be to waste time, attention, and money on useless things that do nothing for anyone except make even more money for rich people.

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  2. Thanks DavidS! You are as civil as you are intelligent.

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  3. FYI – the GE Software Center is in San Ramon CA, not New York. http://www.ge.com/careers/ge_global_software_center.html

    The center in Niskayuna is the Global Research Center which has been there for a while.

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  4. Nice piece Katie! Have you visited our new Software and Analytics Center in San Ramon? (you should)

    Chuck

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