GE is creating the software to translate the messages
THIS ARTICLE WAS PUBLISHED IN THE ‘Q’ – THE REGISTRY’S PRINT PUBLICATION – IN OCTOBER 2012
More than four billion people, 60 percent of the world’s population, use mobile phones today, according to the McKinsey Global Institute. One hundred forty million people send 340 million Tweets a day. The globe is crisscrossed with wireless and physical networks. As people pass from place to place, virtually and physically, their laptops, cell phones, smart phones and tablets leave a data trail.[pullquote_right]The industrial Internet more than the consumer Internet is going to drive sustainability.[/pullquote_right] Many of today’s machines—from factory floors to hospital emergency rooms to jet engines to millions of cars—are silently doing the same thing. The world supports seven billion people, but it is stuffed with billions more things. Many produce huge waves of “digital exhaust,” and many more will.
“More than 30 million networked sensor nodes are now present in the transportation, automotive, industrial, utilities and retail sectors. The number of these sensors is increasing at a rate of more than 30 percent a year,” McKinsey reports in “Big data: The next frontier for innovation, competition, and productivity.”
The data cascading from those sensors in all its vast permutations is big data, and helping to harness that bear—in real time—to derive intellectual meaning and create economic and human value is the task of General Electric Co.’s William Ruh.
Ruh leads General Electric’s new Global Software Center headquartered at Bishop Ranch in San Ramon. He is responsible for helping to conceive and drive GE’s software strategy across all businesses and for all software activities within GE Research, the company’s more than 100-year-old industrial research lab headquartered in New York with offices in India, China, Germany and now San Ramon.
GE believes the world economy is on the cusp of metamorphic change that will spawn new industries, new jobs and new operational efficiencies, including a glimpse at the Holy Grail: predicting everything from disease to machine failure. Software is at the center of that change.
With 8,000 software engineers and staff worldwide, GE Software revenues are $3 billion a year. Under Ruh’s leadership the company anticipates hiring 400 software engineers in San Ramon, with 300 on board by the end of this year, and double-digit revenue growth annually in software sales from now to 2015.
General Electric has signed a 10-year-lease with Bishop Ranch owner and operator Sunset Development Co. for 125,000 square feet, and Ruh is overseeing a $1.5 billion investment over the next three years.
The telecommunications industry has already undergone the analog-to-digital transformation, starting in the 1990s, Ruh told the National Center for Supercomputing Applications at the University of Illinois, Urbana-Champaign last year in a lecture titled “Decade of Industrial Disruption: The Movement from Analog to Digital.” The retail, media, gaming and advertising sectors followed in the 2000s. “All of those industries are fundamentally different today than they were then,” he said. Now it is the turn of the energy sector, including smart buildings, health care, aviation, transportation and agriculture.
GE is not a software company, but it does make a lot of machines—many of them used by the industries now caught in the analog-to-digital revolution. Thirty percent of GE’s revenue comes from sales in energy infrastructure such as gas and wind turbines and gas generators; 12 percent derives from the manufacture of jet engines and another 12 percent from the production of sophisticated medical equipment such as magnetic resonance imaging machines. It also makes transportation equipment including locomotives.
Chief Executive Jeffrey Immelt, Chief Technology Officer Mark Little and Charlene Begley, president and chief executive of GE Home & Business Solutions, recruited him away from Cisco Systems Inc., Ruh said. Initially he was skeptical the job was a fit. “They convinced me that they believed this was a critical juncture for the company. I found it compelling for the leaders to say, ‘We have got to get this right.’ They understood the industrial Internet is happening.”
Give us your vision of the ‘Internet of things’ five years from now? A decade from now?
If the last decade was all about the consumer Internet, the next decade will be the decade of the industrial Internet. It will transform the transportation industry, the energy industry and health care. We are not the only ones saying this transformation is occurring. We are working with EMC [Corp.], VMware [Inc.] and Cisco.
There are now more devices connected on the Internet than people in the world. More data is generated daily than in all of history. The industrial Internet more than the consumer Internet is going to drive sustainability. All of these machines can be made more productive, efficient and sustainable by an ability to control them in real time. All of it is based on: Can you get enough data off a machine to optimize its use? We did not invent the idea. We just saw it happening. The idea of the Internet of things was conceived in the late 1990s. People envisioned that every thing would be connected and communicating. Now is the first that the technology has caught up to the concept.
What makes an intelligent device?
We are working on it. Communicating isn’t intelligence. Say you have a jet aircraft engine. What data do you collect? What do you act on and what do you send? How fast and where do you send it? Also, you have to connect and find a way to secure the connection. We have oil and gas valves that are intelligent already and go into the grid. So not just anybody can control the valve. You connect all of this and you get big data. Big data is an expression of the industrial Internet age.
Intelligent devices can generate much more data than a human. We are getting a billion transactions a day in a modern manufacturing facility where the design and manufacturing and even the repairs and maintenance are connected. The best auto manufacturers can reconfigure their manufacturing plant every 90 days. There is a tremendous amount of data that gets generated.
We have hired and are organizing our data scientists to do this kind of work. ‘Data scientist’—that is a term that has not been around a long time. McKinsey shows that there is a real limit in the number of data scientists. We will need orders of magnitude more data scientists in the world, which is driven by the fact that analytics are the most important part of big data. These Ph.D.s and graduate students who can build these algorithms, this is where the real progress is. We have done work in aviation where we have algorithms to allow us to look at an engine, and using that data we can predict when something is going to break, so you can fix the problem in a normal maintenance cycle. There is zero unplanned downtime, and you can get to a point of substantially reducing downtime. It is groundbreaking work, and it is extraordinarily hard. The point is to get to zero unplanned downtime.
How is it that you came to settle in San Ramon?
We did a lot of talking about where to place this at GE, and I was deeply involved in the process. I felt the location was absolutely critical. I said there is only one center of the world in software, and that is the Bay Area. There are other potential places, but they don’t match the Bay Area in software innovation. There is so much talent in this region we had to be here. Everything derives from the talent. Without the right talent, you won’t succeed. The idea of the headquarters here also sent a message that we are serious about this. So there was an internal audience, people we need to have working for us, and an external audience, the companies we are working with, our customers and our partners—everybody—because GE is not known for its software. We wanted the talent to expand the capacity that we already have. The best talent will go to where they see the most opportunity.
Once you selected the region, how did you go about finding the actual site?
The next question was to build, buy or lease, and we looked at all of those options. I was walking land, and so many buildings were for sale. But ultimately, we chose this location.
The biggest reason was the enormous number of engineers who drive the [Interstate] 680 and the [Interstate] 580 to work and who live in Alameda and Contra Costa counties. We wanted engineers with five years’ to 15 years’ experience, and this is an affordable place to buy a house. We are not looking for people who want to be in a start-up. I think the next decade is about the industrial Internet. This is the place to be: big data, analytics and intelligent devices. It is for people who want to work on the next big thing, who want to work on real problems that could change society. We want people who want a quality of life, and we felt we could offer that to people and engineers who could live in the East Bay and enjoy a reverse commute, which we have discovered is attractive to people.
Why did we you decide not to buy or build?
We saw Bishop Ranch as a special place. We are in a LEED-certified building. We have a medallion out front. We care about that. I initially thought we would buy because there was a good amount to buy, but what was really important to us was the environment, so we took the bet and it is paying off big. I do think that if you care about your employees and employing people for a long time, you don’t want them to burn out in 12 months. We are trying to find entrepreneurs for life, ‘intra-preneurs.’ We are being challenged to bring a strong ‘intra-preneurial’ ethos to the culture of GE: All of which goes back to the location.
Know that not everyone wants [stock] options. They want to be successful, they want a company that comes and plays for a long time. They want to be at a company where they can learn how to be a leader.