By Brian Albright, Field Technologies
Consolidation in the field service sector continues with the latest big acquisition in the space. Earlier this week, GE Digital announced it had acquired leading field service software provider ServiceMax for $915 million. The move will position GE to provide an integrated solution that combines asset management, field service, and connected IoT data for its customers.
GE was a ServiceMax user prior to the acquisition. With a full field service suite that can address logistics, workforce optimization, and deployment models, GE plans to integrate the solution with its own analytics capabilities. The acquisition will also augment its work in building out digital twins for industrial assets (these are virtual counterparts of real-world assets that can provide operational and maintenance insight), and service digitization efforts.
“This acquisition builds upon our ongoing efforts to enhance our overall technology stack around the Predix platform and advance our Industrial Internet vision,” said Bill Ruh, CEO, GE Digital. “Improved productivity is critical for the Industrial Internet and digitizing field services is a cornerstone of a successful digital industrial strategy. This transaction, along with our previous acquisitions of Wurldtech and Meridium, is directly aligned with our strategy to drive growth both inorganically and organically by building the capabilities to support the digital industrial transformation through Predix, APM and the Digital Thread.”
The acquisition will also be coupled with another purchase, Meridium, to improve the company’s industrial Internet asset management offerings. Meridium provides an asset performance management solution GE Digital will also gain a vertical customer base and an established reputation in the market.
ServiceMax, meanwhile, will gain access to new customer segments as well as the Predix industrial Internet of Things (IoT) platform. Predix is a cloud-based platform that can enable industrial analytics for asset performance management. Predix collects data from connected equipment and helps analyze the data so it can be used for business optimization. It was introduced in 2015.
“The transaction will help position ServiceMax to reach its next phase of growth by having access to GE’s broad and advanced industrial portfolio, deep domain expertise and substantial customer footprint,” said Dave Yarnold, CEO of ServiceMax. “We look forward to benefitting from GE’s experience, capabilities and resources as we expand into new markets while continuing to deliver the best tools to help customers maximize productivity and efficiency.”
With the acquisition, GE will now find itself competing directly with Microsoft, Salesforce.com, Oracle, and other large service platform providers.
It also positions itself to be part of a new wave of service solutions that combine traditional field service platforms with real-time IoT data and asset monitoring solutions. Predix is at the center of this strategy at GE.
The company is positioning itself as a digital industrial service company that provides “smart” equipment (connected to the IoT with sensors) to reduce downtime and improve productivity.
“It’s no secret our services revenue is the bulk of our earnings and is a key part of what makes us successful,” Ruh told Bloomberg.com. “We’re moving away from where it’s all on paper to where it’s all becoming fully automated. Services are becoming a key part of the digital economy.”
ServiceMax’s cloud-based offering was built on the Salesforce.com platform. Earlier this year, Salesforce began offering its own service solution (Field Service Lightning), which placed it in direct competition with some of its traditional partners.
Oracle and Microsoft made big plays for the service market via their acquisitions of TOA Technologies and FieldOne, respectively.
The sale is expected to close in January 2017.