Bill Ruh, GE’s VP, will talk about the investment and the Pivotal One Enterprise PaaS later today on Pivotal’s coming out party at 1 p.m. Eastern Time, joining Paul Maritz, the former VMware CEO (pictured above) who’s heading up Pivotal.

GE, the huge conglomerate that makes everything from household appliances to medical devices to jet engines, has been talking up the industrial internet of late. And now GE’s Global Software Center in San Ramon, Calif., will to use the Pivotal technologies as a standard way to deliver data management across GE units, according to the joint announcement.

According to statement released Wednesday morningt:

“The companies also announced their intent to enter into a broad research and development and commercial agreement aimed at accelerating GE’s ability to create new analytic services and solutions for its customers. The investment and business agreement are each expected to be finalized in the second quarter of 2013 and are subject to standard regulatory approval and other closing conditions.”

Update: With GE aboard, EMC will own 62 percent; VMware 28 percent and GE 10 percent, according to a Pivotal spokesperson. Previously  EMC owned 69 percent, VMware 31 percent. When the project  – which took on assets from both companies —  launched, it had 1,250 employees and represented about $300 million in revenue, EMC Chairman Joe Tucci said last month.

This report was updated at 9:22 a.m. PST with the new ownership stakes

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The latest evidence of this push? An interview with William Ruh, VP of software for GE Research, in ComputerWeekly.com. In the piece, Ruh appeared to take a veiled swipe IBM — which loves to portray itself as the thought leader in bleeding-edge tech and the kingpin in tech patents. (For the record, in 2012 GE came in ninth in patents with a total of 1,652 compared to IBM’s 6,478 — but who’s counting?)

GE CEO Jeff Immelt

Ruh said the airline industry has gathered tons of data about how jet engines have performed over the past two decades and that historical data should help guide predictive maintenance going forward. Ruh told ComputerWeekly:

“In emerging markets, we are seeing dirt and sandy environments … How are these affecting aero engines? [Business intelligence] cannot answer this. Nor can a supercomputer … Watson cannot tell me when this machine part will break.”

Watson is IBM’s much-hyped computer that boasts human-like thought processes and beat the human champion in Jeopardy a few years back.

GE is banking on the growing acknowledgement that machine data — information generated and collected by the types of industrial gear it makes — gives it an entry into the booming world of big data. That’s probably why GE CEO Jeff Immelt has been cropping up in a lot of interesting venues, including in an interview with Om Malik last month. And why GE came to San Francisco to announce its “Industrial Internet Quests” and tap into the wealth of software and data expertise there. As my colleague Katie Fehrenbacher put it at the time, the quest “calls on developers, data scientists and designers to make algorithms and applications that can increase productivity for the health and aviation sectors” — all sectors where GE plays.

It may be easy for folks in the valley to forget that GE has thousands of its own software developers on staff and builds sophisticated medical imaging and other high-tech gear: it does have credibility. And, at a time when the emphasis on making and building actual products is more valued, GE has lessons to teach.

The conglomerate obviously wants to be seen as a leader in this realm and won’t be content to let the likes of IBM hog all the glory in the internet of things era. After all, it builds an awful lot of those “things.”

Swept blade photo courtesy of Flickr user Bleucho

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Every year IBM polls its R&D braintrust about what technologies that may have “been at the hairy edge before but are now closer to the scalp,” IBM fellow and VP of innovation Bernie Meyerson told me recently. This year those “closer-to-the-scalp” technologies converge around computers’ growing ability to handle richer, more diverse data and churn out more valuable output — such as the feel of cloth, the smell or taste of food. The general premise is that these sensory and cognitive technologies will convert computers from glorified calculators into true thinking machines.

So, without further ado, here’s IBM’s sixth annual 5 in 5 technology picks.

1: Computers with a sense of touch

Even people who love shopping online say that it’s hard to get a good read on the finished product from a digital image alone. Most of us want to feel the fabric before we buy a big-ticket item. So what if you could sample that cashmere coat from your cell phone before adding it to your shopping cart? Texture data fed into a machine’s piezoelectric drivers can re-create vibrations and temperature on a touch screen can simulate that feel, Meyerson said. “Imagine you have very fine pixels and that each can be heated and vibrated to mimic the sensation of the cloth,” he said.

Some of this capability is available now in rudimentary form in computer games where the controller shakes to indicate an on-screen car collision.

2: Seeing the forest, not just the trees

If you have to rasterize an image in order to analyze it, any sort of correlation will take a long time. If the computer can instead really see and understand that image for what it represents — say, a child, as opposed to a bunch of pixels — it can accelerate the whole process of analysis. That in turn will make the parsing of things like medical images and traffic video much faster. The difference here is between the computer viewing an image and understanding that image without having to break it down into myriad components. That’s the way humans deal with the world. Computers could monitor scanned images of a person over time to watch for and detect changes that indicate a health condition before it gets too serious for example.

3: Hearing the whole story

Just as computers need to see images as whole entities, IBM thinks they also need to hear total sounds — ambient noise, words, music, a lot of inputs to get the full story. “It’s not necessarily just hearing words, hearing is also background noise … if a cell phone caller is in a car with an engine running at 2,000 rpm, you might even be able to tell if the driver is stuck in traffic or moving smoothly,” Meyerson said.

By embedding sensors in flood prone areas, this technology could warn users based on what it’s learned from past sounds, as to whether a mud slide is likely. Computers could also likewise learn based on past experience when a baby’s cry is due to a wet diaper, teething, or something more serious.

4: Digitized taste buds

IBM’s brainiacs think that machines will increasingly be able to taste things — like chocolate or eggplant – and figure out why people do or don’t like that taste. As Kevin Fitchard, GigaOM’s resident foodie, recently reported, some of this is happening now.  For example, researcher and app developer Foodpairing

“has broken down flavor to its molecular components and has compiled databases that can match the flavor of those ingredients against other completely different ingredients. By compiling “foodpairing trees” its technology can identify vegetable or seafood ingredients that reinforce the flavor of different meats, or in some cases, can act as a substitute for a meat entirely.”

This understanding of the chemical elements of food could help people get healthier by subbing in something that tastes like milk chocolate but is better for them.

5: A nose that knows

Breath analysis can do more than keep drunk drivers off the road. What if your smartphone could tell from your breath that you’re about to get a cold? It’s conceivable that your doctor would be able to diagnose you remotely based on that information and prescribe treatment. This technology could also sniff out minuscule amounts of environmental toxins before they hit critical mass, which could have broad public health ramifications.

And then there’s just the quality of life aspect. “You can paint chemical sensors on a surface and when they detect a pattern, they give off a smell — you could make a rich paint with all sorts of sensors that mimic things that you like,” Meyerson said.

So, how’s IBM doing as a sooth sayer?

Since I’m still waiting for the jet packs we were promised decades ago, I’m skeptical about technology predictions, but IBM’s list provides a good starting point to track tech progress and priorities. It’s also fun to grade its prognostication skills.

Looking at last year’s 5 in 5 predictions, it’s fair to say there are hits and misses. For example, last year it said junk mail will get so targeted it will actually cease to be junk at all. If that’s happening, I’m not seeing it.

Another 2011 prediction was we’d get much better at capturing and using wasted kinetic energy  – from people walking, riding bikes,from  running water etc. There is early traction there. Los Angeles is testing advanced flywheel technology as a way to reap wasted energy from braking trains and re-apply it when trains accelerate.  And Pavegen is building sidewalk tiles designed to capture energy from walking pedestrians.

As for mind-reading headsets that measure our brain activity and recognize our facial expressions: Um, no, don’t think so. But to be fair, IBM has 4 more years to make good.

Taking the longer view, looking at IBM’s inaugural list in 2006, it does better. It was on the money with its call that people would be able to access healthcare remotely. There are lots of tele-radiology options and doctors can even perform surgery remotely. IBM also predicted real-time speech translation now exemplified by products like Samsung’s Galaxy speech translation. Meyerson admits to some less successful calls — especially one about hydrogen-powered vehicles — but he’s pretty happy overall with IBM’s effort.

For more check out the video below:

Fabric feature photo courtesy of Shutterstock user sbko; Nose photograph courtesy of  Flickr user Slideshow Bruce

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That’s a very big number — roughly the size of the US economy. The industrial internet is the manufacturing giant’s take on the “internet of things” in which myriad devices — from smartphones to sensors in everything from wrist bands to traffic cameras — communicate via machine language with each other without requiring human intervention.

The report, authored by GE Chief Economist Marco Annunziata and GE Director of Global Strategy and Analytics Peter C. Evans, of course plays to GE’s strengths. How better to boost productivity than by automating the communication and control of all those already-productive tools?

A couple key takeaways from the report:

• Connected machines could eliminate up to $150 billion in waste across industries
• a 1 percent increase in efficiency could save up to $30 billion in aviation, $6 billion in power generation and $63 billion in healthcare costs.

More data = better analytics

Knitting together all these machines and devices, the authors wrote, provides a bigger, better pool of aggregated information that will enable the harnessing of  ”physics-based analytics, predictive algorithms, automation and deep domain expertise in material science, electrical engineering and other key disciplines.”

And, connecting machines also connects the people who run them “whether they be at work in industrial facilities, offices, hospitals or on the move, at any time to support more intelligent design, operations, maintenance a well as higher quality service an safety.”

Do more connected, productive machines mean fewer workers?

Clearly, GE is betting big on the industrial internet notion, as The New York Times reported recently. Of course, since GE has dogs in all those fights — aviation, power generation, heathcare equipment — it’s well positioned to talk on the topic but is hardly neutral on it. Whenever a company chats up automation-fueled productivity gains, the dark side tends to be job loss.  On this touchy topic, Annunziata and Evans wrote:

“But what about labor? Will a further wave of productivity-enhancing innovation destroy jobs? In the current situation of already excessively high unemployment in the US and other advanced economies, this is a crucial issue. There is no doubt that further innovation will make some jobs unnecessary—for example to the extent that some processes can be automated. But as some of the old jobs are no longer necessary, new, better jobs will be created.”

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Mercom says this is due to:

“shifting business models as the industry continues to struggle to understand customers needs and address customer misconceptions along with security concerns among other issues.”

Let’s look at the amount of IPOs and acquisitions for smart grid startups, which is what VCs look at when they decide if they want to invest in a sector or company — essentially how much money can they get back for their investment.

Smart grid network Silver Spring Networks has yet to go public, despite filing its S-1 in the Summer of 2011. Silver Spring Networks has investment from Foundation Capital, Kleiner Perkins, W.R. Holdings, and more recently EMC and Hitachi. I thought Opower would have gone public by now, too. Opower has investors including New Enterprise Associates and Kleiner Perkins.

Acquisitions are actually pretty prevalent in the smart grid space. But a lot of the purchases are either large power companies buying other large energy hardware makers, or the smaller smart grid startups that are many times being sold off for small amounts. SmartSynch and Ember were sold off for not much more than they had raised over their lifetimes. Many of the small smart grid deals are not being disclosed because the investors don’t want to reveal the low valuation of the company.

Then there’s just the fact that the smart grid has stalled a bit, at least in the U.S. Some of that has been because of an inability of utilities to actively engage consumers, and another reason has just been an affect of the recession.

Pike Research has predicted that installations of smart meters in the U.S. will actually sharply decline over the next two years, before they pick back up. One of the reasons is that utilities in California will have finished many of the smart meter installation projects that they started a few years ago. Another reason for the decline is that the Department of Energy gave smart meters a temporary injection a couple years ago.

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GE seems a somewhat odd entity to be pioneering Mac deployment, since it still carries associations of being the lumbering giant and paragon of ’80s and ’90s big business it was under Jack Welch. But the company has a now one-year-old project that allows employees to choose either Mac or Windows PCs as their work computer, and according to the Wall Street Journal, it now has about 1,000 Macs in active use, with that number expected to rise.

That’s just a small fraction of GE’s 330,000 total computers, but it’s a start, and the gap will likely narrow as employees become aware of the program; GE hasn’t been trumpeting the news internally yet. For a rough comparison of where future adoption might take the Mac at GE, consider that 10,000 GE employees now use iPhones as their official work device, after the company began supporting them in 2008. There are 50,000 BlackBerry devices in use, but iPhones have made up considerable ground in four years time.

Private industry is one place Apple’s presence is growing, but it’s also having big impact in government. At the level of local government, especially, the idea of using iPads to take over some tasks and replace paper is catching on. Software provider Granicus recently released its iLegislate iPad app targeted specifically at government customers, and told us it’s already in use by over 1,500 governments.

One of iLegislate’s customers, the government of Maricopa, Ariz., says the use of iPads by 15 members of its local government, including the mayor, council members and city directors and managers, has allowed them to increase transparency by making more materials available to the public digitally, and save over $5,000 annually in printing costs, plus more in staff time just assembling print packages. Maricopa’s experience sounds strikingly similar to what we heard about Cornelius, N.C.’s findings following a pilot project of its own using the iPad as a tool for making local government more efficient.

Maricopa has experienced a whopping 4,000 percent growth in population during the past decade, and the iPad, partnered with the Granicus software, is seen by the city as a way to help quickly scale its infrastructure to cope with the expansion. Apple’s iPad holds appeal as a way to quickly cut costs, with a green, future-proof solution that can leverage IT initiatives already in place at governments.

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Solar technology developers boast of their efficiency breakthroughs to show not just its technical prowess but also their roadmaps for delivering better products. Although they have always devoted money and time to improving the efficiency of their solar cells and panels, many of them have stepped up those efforts in recent years as more companies enter the market and prices for solar panels have falling quickly.

Efficiency is correlated with how much power a panel of a given size can produce – more power means higher efficiencies. There is a fixed cost and amount of time for making each panel, and First Solar’s technology makes a panel in less than 2.5 hours. If the company produces each panel with a higher power rating (in watts), then that panel’s cost-per-watt is lower. Manufactures also can command higher prices for more efficient solar panels.

As we explained in a post last year when First Solar announced a cell efficiency record, the company was under pressure to show there was still a long life ahead for cadmium-telluride solar technology. The Arizona company has built a reputation for being able to mass produce solar panels efficiently and cheaply. But the efficiencies of its solar panels are a few percentage points lower than the more common silicon solar panels. As a result, it also charges less for its solar panels.

Solar power project developers also want more efficient solar panels because these panels allow them to use less space to build a same-size project. Land use has been one of the sticking points for gaining regulatory approval – critics often cite the disturbance or even destruction of wildlife habitat as the big reason for their opposition to a solar power plant. First Solar, which also develops and builds power plants and sells them, typically have to set aside land for wildlife protection in exchange for project approval.

By the way, solar cells are the individual pieces that make up a solar panel. The process of assembling cells into solar panels usually leads to a small loss of efficiency, so cell efficiency figures tend to be higher than their corresponding panel efficiencies.

First Solar is not only one of the largest solar panel makers in the world, but it has also been the lone big manufacturer of cadmium-telluride thin films. Many startups have sought to challenge its dominance over the years, but none has yet to emerge as a serious contender. But General Electric, the power plant equipment giant, is giving it a try, announcing last year it would build a 400MW factory in Colorado.

The two companies already are engaged in the “dude, my panels are better than your panels” competition. Last April, GE said it could produce panels with 12.8 percent efficiency. In July, First Solar said it could do 13.4 percent. Last October, GE executive Victor Abate told me the company aims to roll out panels with 14 percent efficiency when it begins shipping from the new factory in early 2013.

All these efficiency numbers represent targets for the companies. Setting efficiency records only shows that making higher-performing panels from their production equipment is possible. Mass-producing them requires changes to all of their equipment and the process so that the panels that roll off the lines will more or less achieve a uniform efficiency. First Solar runs a fleet of factories, which are located in the United States, Germany and Malaysia.

The average efficiency of First Solar’s mass-produced panels increased from 11.4 percent in 2010 to 11.7 percent in 2011. The company said the figure should go up to 12.7 percent by the end of this year. First Solar believes that by the end of 2015, it should be able to ship panels with 14.5 to 15 percent efficiency to its customers.

Photo courtesy of First Solar

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Hosted services are here (and to stay)

Although we often talk about cloud-based services as a future trend, in reality most of the major suppliers have already made a firm commitment to this strategy.

The concept is simple. A supplier sets up a central set of smart grid applications. Then it lets utilities order them à la carte for a monthly fee. The applications and the data reside at the supplier site and the utilities tap into those apps over the Internet.  The approach has at least four key advantages:

• Fewer personnel costs and issues. Only the largest utilities have the budget and know-how to recruit, train and manage the kind of top-notch IT personnel needed to support state-of-the-art applications.
• Improved security. Suppliers have far more resources and experience to guarantee that applications meet the most stringent security requirements
• Expandability.  The utility can start small and add new applications whenever it is ready
• Lower capital costs.  The supplier takes on the expense of buying the servers, hiring the personnel and installing the software. The utility simply pays a monthly fee

Suppliers hope that dozens or even hundreds of small utilities will eventually sign up, giving them great economies of scale along with recurring revenue.

Munis and coops at the forefront

As the “smart grid as a service category” continues to gain steam, it looks like munis and coops may be the early leaders. That certainly makes sense, since small utilities have far fewer IT resources to assign to install and run new programs in-house. What’s more, munis and coops are more interested in minimizing capital costs. IOUs are less likely to be interested in that aspect, since they can hope to recover their capital costs by adding them to their rate base.

GE pushes forward

GE Digital Energy intends to be a major player in this burgeoning sub-sector. The company is building a host of applications – AMI, GIS, MDMS, distribution management, volt/VAR optimization, outage management, asset management and more – under the banner Grid IQ: Solutions as a Service.  It offers them in three flavors. They can 1) host the data and the applications, 2) host the data only or 3) implement the apps on the utility’s own computers.

Which applications are most popular? AMI is the “door opener” says Mike Carlson, GE’s GM of smart grid solutions. “It’s the hot button. They see the value proposition. And they want to help customers get energy management tools. Outage management is the #2 request. In the future, Carlson expects distribution management systems (DMS) and asset management to grow in popularity.

Carlson also expects munis and coops to be primary targets for the service, as illustrated by two recent wins in the Southeast: Norcross, Georgia and Leesburg, Florida.

Norcross, Georgia

In November, the city of Norcross announced it would be getting advanced metering, prepayment and an online customer portal via GE’sGrid IQ service. The services will cost Norcross’s 25,000 utility customers an extra $1 per month.  For this fee, they will get the benefits of AMI, DMS, home energy management and outage management. The deal was brokered by Electric Cities of Georgia, which monitors and evaluates solutions for its member utilities.

Norcross has a reputation as a regional pioneer in urban redevelopment and economic development, but ECG hopes “mainstream” Georgia cities will sign on as well.

Leesburg, Florida

In Leesburg, GE’s offering will include advanced metering, meter data management and demand response. As in Norcross, GE is responsible for managing and maintaining the applications at its data center. Leesburg will continue to own the data and manage its operations.

The city will begin deploying smart meters to all of its 24,000 customers in March. Residents will begin to receive new services in the second half of 2012, including home energy monitoring and the prepayment options. In addition, 4,000 customers will get energy management systems that let them preprogram the operation of air conditioners and water heaters during peak events.

One of Leesburg’s primary goals is to reduce usage during peak hours. Thus, AMI, MDMS, DR and a customer portal are at the heart of the effort. But the Leesburg project will also include prepayment options plus volt/VAR optimization. The project is partially funded by a $10 million DOE grant.

Our take: All the major vendors will be placing increased emphasis on hosted service going forward. They will initially target small to mid-size municipals and cooperatives. As they prove the case, they will begin to promote the idea more heavily with large munis and investor-owned utilities. They will also expand the menu of services available under their hosted programs.

One possible result: Utilities could wake up in a year or two to find themselves with a wide variety of “apps” in the “apps store.” Ideally, the growing competition amongst suppliers and the growing economies of scale will drive up choice and drive down prices.

What is your thinking on hosted services and cloud computing for electric utilities? Use the Talk Back form below to comment or jump to our discussion forum where we got some good responses when we recently asked should we move the smart grid to the cloud?

Jesse Berst is the founder and chief analyst of Smart Grid News.com. He consults to smart grid companies seeking market entry advice and M&A advisory. A frequent keynoter at industry events in the US and abroad, he also serves on the Advisory Council of Pacific Northwest National Laboratory’s Energy & Environment directorate.

This article originally appeared on SmartGridNews.com. SmartGridNews.com is the Internet’s oldest, largest and highest-ranked smart grid site. Visit for up-to-the-minute analysis of smart grid trends, smart grid technology and smart grid companies. Sign up for the free email newsletter or follow SGN on Twitter.

Image courtesy of Gus Thomson.

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