General Electric is plunking down $915 million to acquire field service software vendor ServiceMax, in a move that should strengthen its already robust IoT (Internet of Things) strategy. Here are the key details of the deal from GE's official announcement:
Service has always been a core part of GE’s strategy and capability and was an early target for the company’s work in analytics and productivity. GE has invested in the build out of digital twins for industrial assets. In addition the company has accelerated productivity improvements through digitizing service processes. The ServiceMax product offering was an essential element to driving GE internal productivity. With this acquisition GE plans to add analytics and insights into the ServiceMax logistics, workforce optimization and deployment models. GE estimates there is a market-wide opportunity to improve service productivity by $25 billion through the use of analytical tools.
ServiceMax’s platform provides a full suite of applications, including inventory and parts logistics, scheduling and workforce optimization, and work order management. As a result of this transaction, customers will be able to access these offerings from a modern rapid application development cloud and field-ready mobile platform that combines the strength of GE’s deep domain expertise and advanced industrial portfolio with ServiceMax’s field service expertise. The company plans to leverage the Predix platform to further the development of additional industrial applications focused on service delivery.
Predix is GE's primary IoT platform for developing applications that connect industrial equipment, collecting data and providing real-time analytics. The move to acquire ServiceMax follows GE's purchases of application performance management vendor Meridium and cybersecurity specialist Wurldtech.
Analysis: ServiceMax a Good Fit for GE's IoT Ambitions
GE's announcement comes on the eve of its Minds and Machines conference, one of the most prominent Industrial Internet events in the world.
It also comes on the same day as Oracle announced a packaged integration between its IoT Cloud and Service Cloud, a move which will allow for similar scenarios as the combination of GE and ServiceMax.
Neither announcement is an accident.
"Field service is part of the post-sale economy," says Constellation Research founder and CEO R "Ray" Wang. "It's at the heart of IOT business models, with real time monitoring and the ability to grow subscription revenues. With AI on top of this and Predix, this is about digital industrialization." Meanwhile, with ServiceMax GE gains a great customer base along with the leading field service application suite, Wang adds.
Field service presents an excellent and clear-cut way to deliver value through IoT in an enterprise, says Constellation Research VP and principal analyst Dr. Natalie Petouhoff. Not only can IoT cut field services costs through factors such as reducing the number of unnecessary truck rolls, but it can also improve customer satisfaction.
"IoT data can be used to anticipate, detect, and predict customer needs and realistically and often proactively improve the customer’s experience by creating the 'algorithm of you,' meaning that each customer will be able to be service in a very personalized way, and the company will be able to scale that mass personalization," Petouhoff says.
Petouhoff and Wang explore the 'algorithm of you' concept in an in-depth report, an excerpt of which is available at this link.
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