GE starts to make good on that 'software company' promise

Every company is now a software company. GE makes good on its hyperbolic statements.

A few years ago, Jeff Immelt, CEO of the massive industrial manufacturing company GE famously stated that the future of his company lay in successfully transitioning into being a software and analytics company. Immelt certainly put his checkbook where his mouth is and started to invest hundreds of millions of dollars in building out partnerships, investments and resources to deliver upon that vision.

And that journey seems to have been a successful one, if news from Invenergy, North America's largest independent, privately-held renewable energy provider is anything to go by.

Invenergy develops, owns and operates clean energy facilities across the globe. It has more than 5,500 MW of natural gas-fueled electric generating projects in operation, construction and advanced development, all of which use cutting-edge technologies to work hand-in-hand with the growth of renewable energy. Which is where the GE part of this story comes in.

GE and Invenergy have signed an agreement to deploy GE’s Predix based asset performance management (APM) reliability management software on 13 GE turbines at six gas-operated thermal plants in the U.S., with an operating capacity of 3,159 MW. The idea of APM is that is allows operators to predict equipment issues, and avoid any unplanned issues.

The interesting thing here is that this value proposition is exactly what GE has been articulating when it comes to jet engines. In an MIT Sloan article about GE’s software offerings, HE’s head of all things software, Bill Ruh, articulated the value here:

In the last few years, GE started to notice that some of its jet aircraft engines were beginning to require more frequent unscheduled maintenance. “If you only look at an engine’s operating parameters, it just tells you there’s a problem,” says Ruh. But by pulling in massive amounts of data and using fleet analytics, GE was able to cluster engine data by operating environment. The company learned that the hot and harsh environments in places like the Middle East and China clogged engines, causing them to heat up and lose efficiency, thus driving the need for more maintenance. GE learned that if it washed the engines more frequently, they stayed much healthier. “We’re increasing the lifetime of the engine, which now requires less maintenance, and we think we can save a customer an average of $7 million of jet airplane fuel annually because the engine’s more efficient,” Ruh explains. “And all of that was done because we could use data across every GE engine, across the world and cluster fleet data.”

In other words, instead of selling jet engines, GE moved to selling efficiencies and guaranteed service level agreements. This is equally applicable to the energy sector, where thin margins and dynamically changing loading requirements call for more finely-grained control and visibility over the assets. Invenergy certainly sees the benefit here:

"Cutting-edge technologies, including advanced digital solutions such as APM and software analytics, give us greater visibility into the performance of our plants at both the asset management and fleet level, while demonstrating real economic value for our plant operations,” said Jim Shield, EVP & chief commercial officer at Invenergy LLC. “We believe these digital solutions are the key element of our innovation strategy to deliver power more reliably to our customers’ energy needs.

Invenergy’s digital initiative with GE began in 2015 with a pilot project designed to test early detection of equipment or system failures on selected units using both GE and non-GE equipment. Using machine data sensors, predictive analytics and process optimizations, GE’s APM solution provided Invenergy with asset anomaly detection through a unified user experience, providing alerts, alarms and historical analysis with visibility into asset performance and health.

This six-month testing phase resulted in an early warning alert that identified a turbine journal bearing issue with early stage vibration. This issue, if left undetected, could have damaged the turbine and resulted in an unplanned outage during peak periods of plant operation. Using GE’s APM software and analytics, Invenergy O&M technicians quickly detected the problem three months ahead of a planned outage.  A number of corrective actions were developed to fix the issue until the full equipment health could be examined more closely during the scheduled maintenance window.

MyPOV

This is a significant win for GE on many levels -- while the technology story is an interesting one, more interesting is the fact that it is a real proof point that the company is successfully navigating the move to becoming a true software vendor. It still has a long way to go, though -- and don’t be fooled, it still makes a large proposition of its revenues from traditional business lines.

Nevertheless, this story is a good example of GE delivering upon its perceived future.

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