General Electric is reportedly considering selling off parts of its industrial software business in hopes of increasing the unit's profitability.
Reuters, citing sources familiar with the industrial giant, reported that GE, now led by John Flannery, hopes to cut costs and raise profits in the software segment, and that options on the table include new partnerships or selling equity.
Jeffrey Immelt, who served as GE's chief executive for 16 years before stepping down last month, pinned the company's hopes on establishing a digital industrial titan as advanced manufacturing equipment becomes increasingly sophisticated and connected.
In recent years, the company sold off numerous assets and poured billions of dollars into its Predix industrial software platform. But Predix dealt with missteps, glitches and delays, and Reuters reported that GE paused the effort this spring to address those issues.
The company also revised its methodology for counting digital revenue, and three senior executives told Reuters that GE will emphasize sales to existing Predix customers rather than targeting new clients.
Despite the efforts to boost the segment's bottom line, Flannery appears committed to maintaining GE's presence in the rapidly growing industrial IoT market.
“There was a lot of money spent on Predix,” one former executive told Reuters. "They are going to tighten the grip and ensure there’s a return.”