| SAN FRANCISCO
SAN FRANCISCO Nov 29 General Electric,
famous for branded hardware from lightbulbs to turbines, is
pushing hard into software, chief executive Jeffrey Immelt said
at the Minds and Machines conference on Thursday.
"In an industrial company, avoid software at your own
peril," Immelt said in a discussion with Marc Andreessen, the
famously pro-software venture capitalist, and Chris Anderson,
editor of Wired magazine.
Software and analytics have becoming increasingly important
for many of GE's clients, Immelt said. A group of GE's radiology
customers, for example, told him earlier this week that if given
$10 million to invest, they would put it into analytical tools
like post-processing algorithms; ten years ago, the answer would
have been brain-imaging machinery, he said.
The same thinking applies to GE customers in areas such as
energy. "The grid has tremendous opportunities for application
of both software and analytics," he said.
In some areas, "a software company could disintermediate GE
someday," Immelt said. "And we're better off being paranoid
General Electric last year generated some $42 billion in
revenue from services - a higher margin business that Immelt
sees as key to growing the company's profit in a weak global
economy. The new push into software is a bid to expand its
service offering while also defending its position in big
industrial markets such as electric turbines, jet engines and
On Wednesday, the company said it was planning a new push
Andreessen suggested a good way for old-line companies to
gain an edge in software is to invest in leading software
Just as he admitted corporate venture-capital had a bad
reputation for investing in young companies at the height of
bubbles, Immelt jumped in. "We're the dumb money," he quipped,
as the audience laughed.
Andreessen stood his ground. "Engaging in the ecosystem is a
big deal," he said. "Showing up with a check is an excuse to
have the conversation."
His love of software aside, Immelt defended GE's core
"In many ways, our products are more resilient than things
like computers," he said, citing the huge capital costs
required. "The moat around this baby is wide," he added, waving
at a large jet engine on the side of the stage.
Andreessen too had some kind words for hardware, citing
Lytro, the camera company his firm has backed. "If you had told
me three years ago we would fund a camera company, I would say
no way," he said.
Andreessen Horowitz, his venture firm, has also backed a
stealth robotics company and Jawbone, the maker of headsets and
a health-monitoring device, he said.
Both men finished by getting back to their core strengths.
Andreessen said 2012 would be remembered as the year of software
as a service, in the style of companies such as Workday
Looking forward, Immelt said 2013 would be the year of
manufacturing, when companies see it as a competitive advantage
and society sees it as a creator of middle class jobs.
"It's a time when manufacturing has become sexy again," he