GE Digital Bulks Up On APM For Oil & Gas As It Absorbs Baker Hughes Experts And Customers
In the run up to its launch as an independent entity, GE Digital has expanded its asset performance management (APM) portfolio by acquiring the oil and gas APM services teams from GE’s oilfield services subsidiary Baker Hughes. The agreement will transition all APM-related employees and customer contracts from Baker Hughes to GE Digital, formalizing an existing relationship as GE Digital previously provided services for oil and gas APM customers in cooperation with Baker Hughes. The move comes as GE, parent company of both, looks to divest more than one-fifth of its stake in Baker Hughes, becoming a minority owner in the firm.
The move boosts GE Digital’s capabilities and expertise in APM for the all-important oil and gas industry. We would expect to see more frequent product updates to GE Predix, driven by customer demand in this key vertical. Baker Hughes already builds digital twins for its clients on GE Digital’s Predix APM software. GE Digital, through a spokeswoman, declined to disclose how many employees or customer contracts came over from Baker Hughes in the deal.
Verdantix pegs the value of the global APM software market at $2.3 billion in 2019 and forecasts it to grow to $4 billion by 2024 according to the recent Verdantix forecast for the APM software market. The oil and gas industry accounts for 34% of that global spend, nearly three times as large as the next largest vertical (mining).
The deal marks another step in the evolution of GE Digital around IIoT, a key component of APM implementations. In December 2018, GE Digital absorbed GE’s Power Digital and Grid Software Solutions businesses while selling off its majority stake in field service management software firm ServiceMax to private equity firm Silver Lake. The combined entity, still branded as GE Digital, is focused on building a comprehensive IIoT software portfolio. In July 2019, GE Digital appointed Patrick Byrne as the new CEO of this expanded group. Byrne had most recently run Fortive’s product realization business and has also served in executive roles at Danaher, Tektronix, Intermec Technologies, Agilent and Hewlett-Packard.
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