GE teams up with AT&T and Intel to conquer the industrial internet. Here's its plan.
Two years ago GE made some big bets on the internet of things — what it calls the industrial internet. It opened an office in San Ramone, Calif. and started articulating a vision of connected sensors sending data …
Context & Ripple Effects
This is GE's industrial internet strategy moving from vision to infrastructure. The company opened its San Ramon office two years earlier to chase connected sensors and machine data; today's confirmed partnerships with AT&T and Intel attach a carrier and a chipmaker to that plan, giving GE connectivity and silicon rather than just rhetoric. The story travelled widely on pickup day — NYT Bits, AllThingsD, ZDNet and SiliconANGLE all carried it, a signal of how much attention an industrial conglomerate courting the tech press could command in 2013.
The pieces are complementary: AT&T brings network reach for moving machine data (its consumer Rest of World pricing — $30 per 120MB — shows how far from flat-rate industrial-scale connectivity still is), while Intel's recently shipped low-power Haswell parts, drawing as little as 4.5 watts, are positioned for embedded sensing and gateway hardware rather than just PCs.
First-order effects
- AT&T gains a marquee machine-to-machine customer beyond smartphones, extending its network business into industrial contracts where per-device data volumes, not voice minutes, drive revenue.
- Intel secures a design path for its power-efficient Haswell-class silicon inside sensors, controllers and gateways — a market outside the PC franchise it has depended on.
Second-order effects
- Rival carriers face pressure to land their own industrial-equipment partners, because whoever holds the connectivity contract for GE's turbines and locomotives sets the template for other manufacturers' fleets.
- Other industrial giants must decide whether to build equivalent software-and-sensor stacks themselves or partner — GE's move makes 'we sell you machines plus data services' a competitive answer competitors have to match.
Third-order effects
- If heavy-equipment makers succeed at monetizing sensor data, the industry shifts from selling machines outright toward selling uptime and efficiency — with control of the software layer becoming as valuable as the hardware itself.
- The carrier-chipmaker-industrial triangle points toward connectivity and embedded compute being priced as commodities, with value concentrating in whoever owns the analytics platform above them.
The trend: Industrial manufacturers are repositioning as software-and-data companies by renting connectivity and silicon from carriers and chipmakers, turning installed machinery into subscription revenue.