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What To Know About GE's New $1.2B IIoT Software Business, ServiceMax Divestiture

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What To Know About GE's New $1.2B IIoT Software Business, ServiceMax Divestiture

General Electric Company (NYSE: GE) on Thursday announced two new business developments: the creation of a new Industrial Internet of Things (IIoT) software business and an agreement to sell a majority stake in its ServiceMax business.

What Happened

GE's new IIoT business will be wholly-owned by GE and independently run with the objective of bringing together all of GE Digital's IIoT solutions, including the Predix platform, Asset Performance Management, Historian, Automation (HMI/SCADA), Manufacturing Execution Systems, Operations Performance Management and the GE Power Digital and Grid Software Solutions businesses.

The business will start with $1.2 billion in annual software revenue and an existing global industrial customer base.

Separately, the company agreed to sell a majority stake in ServiceMax, a provider of cloud-based software productivity tools for field service technicians to the private equity firm Silver Lake. As part of the agreement, GE will hold on to a 10-percent stake in ServiceMax and the two entities entered into a reseller agreement to continue serving joint customers, including GE's industrial business units.

Why It's Important

GE Chairman and CEO Larry Culp, Jr. said in the press release the strategic moves is part of a strategy to better focus on core verticals, deliver greater value to customers and create new value for investors.

GE investors are reacted positively to the announcements. Coupled with a big upgrade from JPMorgan, investors spear to be incrementally more optimistic on GE's outlook today.

At time of publication, GE shares were trading up 11.6 percent to $7.49 in Thursday's pre-market session.

Related Links:

Things Are Going From Bad To Worse For GE

UBS Still Bullish On GE

Photo credit: Empoor, via Wikimedia Commons

Posted-In: IoT Lawrence Culp ServicemaxNews Asset Sales Top Stories Best of Benzinga

 

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