GE to spin off GE Digital as separate company

The decision was made in an effort to streamline the company's industrial services amidst ongoing financial woes.

0 December 18, 2018
Devin Jones


In a move to streamline their industrial services, GE announced that GE Digital and it’s industrial analytics platform Predix will be spun off into a separate entity focused solely on the internet of things and industry 4.0.

As a separate company, GE Digital will start with $1.2 billion in annual software revenue along with an existing industrial customer base. The goal is to bring together GE Digital’s IIoT solutions, which include Asset Performance Management, the Predix platform, Automation (HMI/SCADA), Historian and Operations Performance Management.

“As an independently operated company, our digital business will be best positioned to advance our strategy to focus on our core verticals to deliver greater value for our customers and generate new value for shareholders,” said Lawrence Culp, Jr., Chairman and Chief Executive Officer, GE.

GE hired Culp as the incoming CEO after Jeffrey Immelt, who created and championed GE digital, stepped down in 2017.

Once it’s spun off early next year, GE Digital it will have its own brand, board of directors, and equity structure, acting as a wholly-owned subsidiary of GE.

The company also announced that it has signed an agreement to sell a majority stake in ServiceMax, 
a business that makes computer models for workforce optimization, to private equity firm Silver Lake. That transaction is expected to close in early 2019. GE Digital purchased ServiceMax in 2016 for $916 million.

Rather than sell the digital arm of GE entirely, Culp decided to spin it off amidst on-going financial trouble that saw 60 percent of its value in the past year. GE Digital will now have to compete head-to-head with the likes of Amazon and AWS, and Microsoft’s Azure cloud platform.

GE Digital will also have to search for a new CEO as William Ruh, a former Cisco executive who led GE Digital, is leaving the company. 

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