Jeff Immelt never really understood digital strategy
Jeff Immelt never really understood digital strategy , and it highlighted by the problems that traditional HW companies have embracing the cloud etc.
While he is right in that system connectivity and large data analytics are big drivers in the future, companies like GE, Siemens etc have over the years ensured that their systems are mutually incompatible. You only have to look at the plethora of competing industrial protocols that are out there, each with a industry champion. Therefore they make poor industry aggregators. If you compare them with a company like google, who basically whole existence is based around data integration, its not hard to see where the driving force will be.
There is also the question of who owns the data. Its all very well suggesting that a company puts its system data in the cloud. The bigger question is who has access to it and who owns it. This is especially difficult if the hosting service wants to profit from analysis of it. (Something which google has been doing for years, but companies generally value their data more highly than individuals)
There is also a culture clash. Traditional industrial equipment are conservative devices, generally self contained. Digital services are fast moving,agile and interconnected. At some some point there is a clash and trade off, usually with security
The final issue is that GE approach was we will build these services and they will come (field of dreams principle). However they spent little time thinking making it easy for companies wanted to connect to the services, what cost model to use. Again this is industry process thinking. Configuring a industrial system generally involves editing 30 unrelated config files and then not touching anything in the hope it does not break. If Apple had designed a industrial system it would consist of one button which said connect. Guess which approach GE went for. Cloud also means that costs become far less transparent. You can be charged by the MB stored, CPU time, bandwidth or a plethora of other metrics. Again it makes it difficult to monitor and control costs. Fine in the high margin digital world, but industry margins tend to be low margin
Finally the issue was over estimating your size and strength. While GE has a huge captilisation, it like many other nuts and bolt operations are quickly become dwarfed by digital power houses. Also because they tend to have less investment in infrastructure, they can quickly capitilise large projects. GE found quickly it could not afford to setup its own server farm, and now relies on AWS. This shows where the power now lies in the new world order