General Electric Expands Interests in the Cloud

The cloud space just got a little more crowded. Following Alibaba’s (NYSE:BABA) recent foray into the cloud market, General Electric (NYSE:GE) announced an increased investment in cloud services.
General Electric is planning to build its own infrastructure to support its Predix Cloud software, a Platform as a Service (PaaS) specifically designed for industrial data and analytics. GE will begin to migrate its software and analytics to Predix Cloud in Q4, with the service becoming commercially available in 2016.
As Zacks notes, the service has been built to support GE’s existing Predix software, and the move to up the ante on the analytics front highlights the growing importance of the internet of things (IoT). The company stated in Wednesday’s release that analysts expect over 50 billion assets to be connected to the internet by 2020.
“Cloud computing has enabled incredible innovation across the consumer world,” stated General Electric CEO Jeffrey Immelt. “A more digital hospital means better, faster healthcare. A more digital manufacturing plant means more products are made faster. A more digital oil company means better asset management and more productivity at every well.”

Cyber security concerns?

That’s certainly a winning endorsement for the IoT. However, there have been concerns about increased connectivity as well, specifically on the security front.
For example, consider Hospira’s (NYSE:HSP) Symbiq Infusion System, which was designed to cut down on human error when administering medications by communicating wirelessly with hospital information systems. The US Food and Drug Administration (FDA) recently found Symbiq to be vulnerable to cyber security attacks, and put out a warning against using the system.
On a similar note. Zacks suggested that the industrial sector “includes some of the highest value companies in the world with highly sensitive information,” and that as such, General Electric could be creating a tempting jackpot for hackers with Predix.
Not surprisingly, GE says that security is a big part of what sets Predix appart,. Unlike public cloud platforms such as Amazon.com’s (NASDAQ:AMZN) Amazon Web Services, General Electric is describing Predix as a “gated community” that will “ensure that tenants of the cloud belong to the industrial ecosystem.”

Increasing interest in the cloud market

In any case, interest in the cloud appears to be growing. While Amazon has long held the top spot in the market, Alibaba is aiming to overtake that position, as mentioned above. Meanwhile, Microsoft’s (NASDAQ:MSFT) cloud computing unit Azure hasn’t exactly been a slouch either.
General Electric’s Predix Cloud is arguably much different in that it focuses specifically on the industrial sector. However, the company’s investment still adds to a growing trend of larger companies placing their bets on the cloud.
Certainly, investors will be watching General Electric as it moves to launch its expanded Predix services. They’ll also be keeping an eye out for other companies entering the cloud services space, for exposure to the internet of things and beyond.
 
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.