General Electric’s push to remake itself as a software-focused industrial manufacturer took another step forward today with the announcement of a partnership with Silicon Valley giant Apple.
The companies are rolling out a software development kit that enables developers to create apps for Apple’s iPhone and iPad that use GE’s Predix, a cloud-based software platform for tracking and analyzing data from connected industrial machines. Developers will be able to download the toolkit starting Oct. 26.
Boston-based GE (NYSE: [[ticker:GE]]) will also work with Cupertino, CA-based Apple (NASDAQ: [[ticker:AAPL]]) to develop industrial apps for use by GE employees and customers.
The collaboration fits into several big business and technology trends. Manufacturers are hooking up their factory machines and field equipment to the Internet, banking on the promise that the “Internet of Things” will enable them to better track machine health and performance. The goal is to respond quickly to maintenance issues—and perhaps even predict when problems will occur—in order to avoid costly equipment outages and improve the efficiency of their operations.
The partnership also ties into the “consumerization” of business software. Manufacturing software is sometimes seen as outdated and clunky, and employees increasingly expect the software they use for work to be accessible and elegantly designed, like the experience they typically have with consumer apps. In that regard, teaming up with Apple makes a lot of sense for GE. But it’s not the first partnership GE has struck with a large tech company; GE announced a similar collaboration with Microsoft in July 2016.
The Apple deal marks one of the first major partnerships for GE under its new CEO, John Flannery, who took the helm a couple of months ago. But it’s a continuation of the strategy enacted by Flannery’s predecessor, Jeff Immelt, who made some big moves to try and transform GE’s business (and its reputation) into a digital-focused industrial company. Under Immelt, GE got out of the appliances and plastics industries, sold NBC Universal, divested much of its capital business, and announced plans to sell its lighting business—its oldest legacy. Meanwhile, GE made acquisitions in areas like 3D printing and software, including the $915 million acquisition of machine software maker ServiceMax.
That broad strategy has its supporters, but also plenty of skeptics, including on Wall Street. GE’s stock underperformed throughout Immelt’s 16-year tenure, and it has continued to struggle in Flannery’s early days. After the recent departure of several top executives, GE’s leaders undoubtedly hope the Apple news will give it a boost ahead of Friday’s release of GE’s third-quarter financial results.
As part of the deal, Apple will encourage the use of Predix among its customers and developers who are creating industrial apps. Meanwhile, GE will promote Apple devices among its employees.
Apple has formed a number of similar partnerships, including deals with Accenture, Cisco, Deloitte, IBM, and SAP, Bloomberg reported. As the publication noted, Apple is trying to get more business users to adopt its products, as the company’s smartphone sales slow.
