General Electric is 123 years old. But, that's not stopping the industrial giant from trying to become a force in the next wave of the industrial internet.
GE's CEO Jeffrey Immelt spoke at an evening keynote on Tuesday at the 2015 Gartner Symposium. The "Mastermind Interview" session was conducted by Gartner Vice President and Gartner Fellow Mark Raskino.
They discussed GE's strategy to evolve, and at the center is the idea of merging the physical and analytical.
"You wake up one day and realize that the locomotive you used to sell is a data center," he said.
GE, with its long legacy, has an immense knowledge of the physical—the material science, the physics, anything anyone could possibly need or want to know about locomotives, jet engines, etc. The Idea is to take that knowledge and couple it with the digital—applications, open information, algorithms.
So, that locomotive, when connected, becomes its own data center that can supply information on anything from maintenance and performance, which helps with things like fleet management, which ultimately boosts productivity. Immelt said productivity has slowed greatly over the past several years and it will matter to rail companies, for example, if they can up the velocity of their locomotives by a few miles—a few miles can translate into millions of dollars.
Immelt calls this idea of connecting and mirroring, in a sense, physical assets to the digital, creating "digital twins."
And really, what this plays at is a bigger project on GE's part. Raskino asked Immelt to elaborate on something called Predix, which is an industrial analytics platform that's cloud based, open, and lets customers write their own applications.
That's how GE plans to stay strong and to stay relevant, even at a time when the "fashionable" perception, Raskino said, is that the only companies that matter are the new ones. He cited the statistic that 15% of the S&P 500 didn't exist 15 years ago. And what's more, GE plans to position itself toward $15 billion in software revenue by 2020.
What that also means is that GE could end up going up against many of those big, newer companies—Raskino referenced Google, for example.
Immelt said he thinks that the market is big enough that everyone will get their slice, and that it's in many ways hard to compare. Take Google in 2150, "They're going to be more than search," he said.
Immelt also talked somewhat about internal and external approaches to digitizing. He said it would have been arrogant to think that GE could solve its problems through one acquisition. Rather, they've tried to accomplish a lot internally.
Raskino asked about creating a situation where everything is connected and even if there's only a 1% risk of things going awry, if it's worth it.
"Security is going to gate how fast this goes," Immelt said speaking broadly. He still lists cybersecurity as one of the top four risks to the enterprise.
Immelt also talked about the changing role of the CIO, especially at times when companies are faced with new technological demands that will affect the company at its core. He half joked that once upon a time, the CIO basically just had to make sure the help desk was running. That's not the case anymore, and really shouldn't be.
To CIOs, he said, "You've just been too passive for too long. You're not conceptualizing how important you are in your company. You have to be an active leader demanding a seat at the table because your company needs you."
Erin Carson has nothing to disclose. She doesn't hold investments in the technology companies she covers.
Erin Carson is a Staff Reporter for CNET and a former Multimedia Editor for TechRepublic.