General Electric has big plans for big data.
A team from GE Software and GE Ventures has launched an incubator program in partnership with venture capital firm Frost Data Capital to build 30 in-house startups during the next three years that will advance the "Industrial Internet," a term GE coined. The companies will be housed in Frost's incubator facility in Southern California.
By nurturing startups that build analytical software for machines from jet engines to wind turbines, the program, called Frost I3, aims to dramatically improve the performance of industrial products in sectors from aviation to healthcare to oil and gas. Unlike most incubator programs, GE and Frost Data are creating the companies from scratch, providing funding and access to GE's network of 5,000 research assistants and 8,000 software professionals. The program has already launched five startups in the past 60 days.
Here's how it works: The incubator team will come up with the startup ideas by identifying areas lacking operational efficiencies based on the needs of GE's and Frost's shared customers. After moving forward with each startup concept, the group will recruit experienced CEOs and chief technology officers to help lead and scale the various companies.
So what kinds of practical things will these startups create? In one example, GE is combining weather data with operational data to analyze the efficiency of wind turbines and change the curvature of blades--a move that will yield as much as 5 percent additional electricity.
Bill Ruh, vice president at GE Software, says another area in need of innovation is the jet engine. "By making machines intelligent [and] collecting data and analytics, we can foundationally change how resources are used, like fuel burn on a jet aircraft engine. If you can get rid of 40 percent of all airline delays due to mechanical errors, that's a huge win for both the consumer and the airline."
Stuart Frost, chief executive officer of Frost Data Capital, estimates the savings that come out of the program could over time reach into the trillions.
"In a lot of these areas you're talking about $100 billion a year in unplanned down time, like in oil and gas," he says. "In healthcare it's a trillion a year lost in unfortunate outcomes for patients."
The broader goal of Frost I3 is to transform the industrial world through software, much in the same way the consumer Internet has been transformed.
"Software will be a key center point to managing a power plant or managing an airline or managing a rail company," Ruh says. "We believe the industrial world is going to change and look more like the consumer Internet."