After rolling out its cloud-based Predix software last fall, General Electric (GE) has been looking for new ways to boost its so-called Industrial Internet. It now appears Europe will be the next frontier.
General Electric CEO Jeff Immelt announced that the Fairfield, Conn.-based manufacturer has opened an office in Paris that will serve as a "digital foundry," employing 250 in hopes of expanding the scope of the Predix initiative. (GE is a stock held in Jim Cramer's Action Alerts PLUS charitable trust.)
"Europe has the talent and infrastructure to lead a productivity revolution and the digitization of industry must be at the core of this mission," Immelt said in a statement.
The Predix platform, which serves as cloud that enables third-party engineers to use GE's proprietary software and machine sensor to optimize performance of equipment ranging from rail cars and jet engines, opened in February and so far has attracted nearly 11,000 developers.
Predix launched last fall with Action Alerts PLUS portfolio company Cisco (CSCO) as well as with Intel (INTC) and wireless companies Verizon (VZ), AT&T (T), Vodafone (VOD) and Sprint's (S) parent, Softbank.
The strategy is part of Immelt's broader effort to unwind the final remnants of GE Capital, the financing arm largely responsible for GE's ensnarement in the 2008 financial crisis and its relatively slow recovery. GE sold more than $150 billion in GE Capital assets last year alone, which has been counterbalanced by industrial megadeals such as GE's $10 billion acquisition of French turbine manufacturer Alstom's (ALMSY) grid business.
Jim Cramer and Action Alerts PLUS co-manager Jack Mohr said in a June report that GE appears to be a strong growth story, especially with its more transparent business model and 3.1% dividend yield.
GE has laid the ground work for "a clearer, simpler and more stable business model that should command a higher multiple as investors increasingly value the company as a multi industrial powerhouse rather than a financial (it has shed nearly all of its legacy GE Capital assets)," they added.