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Originally published Monday, December 24, 2012 at 8:00 PM

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GE bets big on ‘industrial Internet’

GE is embracing the concept of bringing digital intelligence to the physical world of industry as never before. It’s a long-term strategy whose impact could be felt across the economy.

The New York Times

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SAN RAMON, Calif. — When Sharoda Paul finished a postdoctoral fellowship last year at the Palo Alto Research Center, she did what most of her peers do — considered a job at a big Silicon Valley company, in her case, Google.

But instead, Paul, a 31-year-old expert in social computing, went to work for General Electric.

Paul is one of more than 250 engineers recruited in the past year and a half to GE’s new software center in the East Bay of San Francisco.

The company plans to increase that workforce of computer scientists and software developers to 400 and to invest $1 billion in the center by 2015.

The buildup is part of GE’s big bet on what it calls the “industrial Internet,” bringing digital intelligence to the physical world of industry as never before.

The concept of Internet-connected machines that collect data and communicate, often called the “Internet of Things,” has been around for years.

Information-technology companies, too, are pursuing this emerging field. IBM has its “Smarter Planet” projects, while Cisco champions the “Internet of Everything.”

But GE’s effort, analysts say, shows that Internet-era technology is ready to sweep through the industrial economy much as the consumer Internet has transformed media, communications and advertising over the past decade.

In recent months, Paul has donned a hard hat and safety boots to study power plants. She has ridden on a rail locomotive and toured hospital wards.

“Here, you get to work with things that touch people in so many ways,” she said.

GE is the nation’s largest industrial company, a producer of aircraft engines, power plant turbines, rail locomotives and medical imaging equipment. It makes the heavy-duty machinery that transports people, heats homes and powers factories, and lets doctors diagnose life-threatening diseases.

GE resides in a different world from the consumer Internet. But the major technologies that animate Google and Facebook are also vital ingredients in the industrial Internet — tools from artificial intelligence, like machine-learning software, and vast streams of new data. In industry, the data flood comes mainly from smaller, more powerful and cheaper sensors on the equipment.

Smarter machines, for example, can alert their human handlers when they will need maintenance, before a breakdown. It is the equivalent of preventive and individualized care for equipment, with less downtime and more output.

“These technologies are really there now, in a way that is practical and economic,” said Mark Little, GE’s senior vice president for global research.

GE’s embrace of the industrial Internet is a long-term strategy. But if its optimism proves justified, the impact could be felt across the economy.

Today, GE is putting sensors on everything, be it a gas turbine or a hospital bed. It estimates such efficiency opportunities across the industries it covers at as much as $150 billion.

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