GE, Microsoft To Announce Deep Partnership
General Electric and Microsoft plan to announce a deeper partnership involving GE’s Predix industrial internet platform and Microsoft’s Azure cloud platform.
The partnership, due to be announced on Wednesday by GE Chief Executive Officer John Flannery and Microsoft Chief Executive Officer Satya Nadella, comes days after GE announced a partnership with Apple Inc.
GE Chairman and CEO John Flannery promised Wednesday to boost partnerships for the company's "digital industrial" efforts, even as he prioritizes resources on its established segments such as energy, aviation and health care.
The agreement broadly expands integration of Microsoft’s cloud software with GE’s Predix applications, said Bill Ruh, Chief Executive of GE Digital.
The agreement also shows GE’s ability to forge significant new deals with its industrial internet system after a shaky period with Predix.
The joint effort is focused initially on oil-and-gas and mining companies, but would also be valid for other companies that run Microsoft software, which includes the vast majority of industrial companies, Ruh said. He declined to provide further details.
Predix is a software platform developed by GE that connects industrial equipment like jet engines and power plants to computers that can predict failures and reduce operating costs.
GE and Microsoft formed a partnership last year to bring Predix to the Microsoft Azure cloud, allowing GE's industrial customers to access additional capabilities such as natural language technology, artificial intelligence and advanced data visualization.
The two companies announced Wednesday that starting on Nov. 30, Predix customers and developers will be able to build powerful industrial apps on Azure. The Predix-Azure combination will kick off in North America and expand to additional markets next year.
GE CEO Flannery said the industrial conglomerate will use more alliances to build its digital-industrial business in coming years, suggesting that it will control spending in that area.
The industrial company is investing about $2.1 billion in GE Digital this year, and executives had said that amount would fall in 2018.
Flannery on Wednesday made his first direct remarks about the digital strategy since he became CEO on Aug. 1. He has begun slashing costs in other areas, including reducing staff, grounding corporate jets and laying off the "Maserati benefit" of corporate cars for about 600 senior executives.
Flannery is due to reveal new financial targets on Nov. 13 and is under heavy pressure to turn GE around after the company's third-quarter earnings and cash flow badly missed targets.