Dive Brief:

• General Electric Co. is having some technical issues with Predix, according to Reuters. Predix is a cloud-based platform that connects devices on the industrial internet and can predict failures and reduce operating costs. The new software platform was a cornerstone of former CEO Jeff Immelt’s companywide digital transformation efforts.

• In May, GE took two months out to confront Predix problems, according to the report. Reuter's sources said its new chief executive John Flannery may push for cuts to GE Digital and possibly sell some equity in the unit.

• GE Digital has not delivered on expected revenues and was at least partially liable for a 25% drop in GE’s share price in 2017. Immelt had originally predicted GE Digital revenue would reach $15 billion by 2020, but analysts say that’s highly unlikely now.

Dive Insight:

Under Immelt's leadership, GE worked to quickly move the 125-year-old company to the digital age. But to make the shift, GE invested billions of dollars and is still waiting to see strong returns. 

GE's efforts are a cautionary tale about the importance of timing. While getting in early on disruptive transformation efforts can be highly rewarding, there are potential pitfalls as well. For example, GE's efforts to create its own cloud storage for Predix fell flat. GE now uses AWS. In July GE and Microsoft announced plans use Microsoft’s Azure cloud platform as well.

Such transformational efforts also take time, and its possible GE’s efforts will pay off eventually. Microsoft said combining Predix and Azure will give industrial companies access to new capabilities such as natural language technology, artificial intelligence, advanced data visualization and enterprise application integration.

Improvements may be on the way. General Electric CIO Jim Fowler said he could save GE $700 million on the Predix platform by anticipating more than 50% of the repair work needed on GE machines by 2020.