Daily Management Review

GE to spend $1 billion on a cloud provider


11/15/2016


GE Digital company, a division of US conglomerate General Electric, announced a deal to acquire cloud service provider ServiceMax for $ 915 million. Closing is scheduled in January next year.



Momoneymoproblemz
Momoneymoproblemz
A division General Electric, GE Digital, intends to purchase a service provider cloud service ServiceMax for $ 915 million, Bloomberg reported. This step will make GE a direct competitor to IT giants such as Microsoft, Salesforce and Oracle. 

GE is investing in technology and trying to position itself as a "digital industrial enterprise," the agency said. ServiceMax will become part of GE Digital’s unit dedicated to development of industrial software. Volume of GE Digital’s business will reach $ 15 billion by 2020, predicted in the corporation.

ServiceMax offers cloud solutions for customer service and maintenance. These systems help carry out maintenance and repair of equipment at customer facilities, create new work orders and manage schedule of repairs.

Earlier, Microsoft announced collaboration with General Electric. Through this partnership, the developer of Windows will strengthen its product portfolio in the field of Internet of Things (IoT), and its industrial customers will be able to take advantage of cloud-based applications.

Within the agreement, industrial IoT-platform GE Predix will be launched on Microsoft Azure cloud. This integration will allow clients of Predix analyze data and share information using Microsoft cloud services.

Purchase of ServiceMax means that General Electric enters competition with major high-tech companies, including Microsoft. In mid-2015, the latter purchased ServiceMax’s competitor - FieldOne Services company, which sells software to large customers such as United Technologies and Mitsubishi- Hitachi Power Systems. 

Acquisition of ServiceMax accelerates commercialization of Predix-based applications by combining industrial product portfolio of General Electric and ServiceMax experience in field service, said Deane Dray, an analyst at RBC Capital Markets.

Net profit of US diversified group General Electric Co. (NYSE: GE) in the third quarter of 2016 decreased by 19% to $ 2.03 billion, or $ 0.22 per share, compared with $ 2.51 billion, or $ 0.25 per share, for the same period a year earlier, according to a press release from GE. The company's profit, excluding one-off items, amounted to $ 0.32 per share.

GE's revenue in the last quarter increased by 4% - up to $ 29.27 billion. Growth of the company's revenue was weaker than market expectations.

Analysts polled by Thomson Reuters, on average, forecasted the company’s adjusted profit at $ 0.30 per share on revenue of $ 29.64 billion.

Operating income of GE industrial key businesses, including energy infrastructure, transport, aviation and healthcare, fell in July-September by 4.6%, to $ 4.32 billion. Transport division’s revenue fell by 22%, and aircraft sector increased by 5%.

Revenues of GE oil and gas unit shrinked by a quarter. Since the beginning of this year, the company's market capitalization decreased by 6.7%, to $ 260 billion.

source: bloomberg.com






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