Most investors probably don't associate General Electric with technology, but CEO Jeff Immelt is now wagering a bet that it can become a top 10 software company by 2020.
"The proof of the pudding is reality. Our orders are growing 25 percent a year. We are kind of first among equals in the industrial internet. We can play. We can do this," Immelt told "Mad Money" host Jim Cramer.
When GE began investing in technology, Immelt said he didn't do so with the notion that it had to become a software company. Instead, the industrial assets that the company sells are surrounded by sensors and produce a massive amount of data. It was simply an investment to protect its installed base.
GE's digital transformation could tap into what Immelt estimated to be a $100 billion market. At first, he didn't know where GE stood in that pool. He quickly realized it was both a good and big idea.
The 124 year old industrial giant also established a presence in Silicon Valley by opening up a software center in San Ramon, California that now has 1,400 employees.
"From an offensive standpoint … but also from a defensive standpoint; every industrial company is going to have to stake its digital claim in terms of how you do a better job with customers, how you can drive costs down, and we can lead this," Immelt said.
While GE is certainly not trying to become Facebook or Google, it does already have 30,000 employees who are capable of pushing forward the initiative. What distinguishes the company from the competition is GE's ability to bring both the physics and the analytics, Immelt said.
GE launched an operating system called Predix for the industrial internet. The industrial internet is a term coined by GE that refers to the integration of big data, wireless networks and analytical tools with physical and industrial equipment.
"In the industrial internet world, we have a brain and a body. People just have a brain. I think ultimately the guys that are going to win this are the ones that can deliver these solutions point by point by point. That's how the industrial world works," Immelt said.
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