Predix is built on top of Cloud Foundry. GE are a Foundation member and one of the major investors in Pivotal, which in turn is the majority donor of engineering on Cloud Foundry. By way of disclosure, I work for Pivotal. None of this should be seen as official comment.
So the key thing is: from where I'm sitting, GE are actually serious about this. Really serious. They are not alone.
There's this cliché that big companies are all sitting around, waiting to be disrupted, blissfully unaware that someone in the Valley is going to kill them.
It's getting to be a less and less plausible strawman. Those business leaders are reading the same books, hearing the same ideas and -- crucially -- many of them are consciously seeking out people who can teach them (including, I guess this is a disclosure, Pivotal Labs, our consulting/coaching wing).
Enterprises now want to disrupt themselves, because it 1) hurts their existing competitors and 2) creates moats against startups.
The strawman that giant enterprises are ignorant and ripe for disruption because of their arrogance -- the classical model of hubris -- isn't true.
Hubris cuts both ways. It's the Valley that's becoming lazy and complacent, assuming that they have a monopoly on interesting problems, on big revenues, on agile and lean development.
The barbarians used to be at the gates of Rome. Now the Romans are at the gates of the barbarians, and they're much more heavily armed.
> Enterprises now want to disrupt themselves, because it 1) hurts their existing competitors and 2) creates moats against startups.
Do they really want that? Or just say that want it? As comparison, everybody says that they want to get in better shape. But how many put in the work?
I think there's an enormous amount of money to be made (and probably, being made right now) in going to existing large companies and selling them "innovation" consulting that gives them the feeling of change without doing anything actually hard. It's the equivalent of buying low-fat cookies and calling it a day.
In practice I expect very, very few of these companies to actually do anything meaningfully different. As an example of that, look at how "agile" has changed over the years. 90% of shops I talk to where people are "doing Agile" are actually doing mini-waterfall. It's the same old bullshit with new labels and a slightly faster release cadence.
That's not to say that startups will do any better on average. So many people chased unicorn status without any thought of building actual businesses. But I still expect the startups with a clue to do a fine job going after large companies in the low-fat cookies camp.
There seems to be a trend among Fortune 100 management that belief = reality. This attitude makes sense perhaps if you're a personal trainer to help motivate people but management doesn't seem to understand that they need to shape up and convince a fairly low engagement workforce that they're all in it together and that they know what they did in the past isn't how they're going to run things in the future. This can be accomplished by hiring well-known rather than well-connected leadership, firing old managers, and rewarding employees in ways not seen before.
> There seems to be a trend among Fortune 100 management that belief = reality.
That makes total sense to me. The larger a top-down organization is, the more the people on top exist in a reality that is socially mediated. That's especially true given that the theory of the MBA is that it's a universal management degree, meaning that knowledge of the domain is at best secondary. In a social context, confidence is very appealing. Strong belief becomes executives' reality.
> The strawman that giant enterprises are ignorant and ripe for disruption because of their arrogance -- the classical model of hubris -- isn't true.
I'll buy that.
I still think they are ripe for disruption because they are giant enterprises.
I can't think of any examples of big bureaucratic organizations with a settled culture transforming into something different and better. Normally they get replaced.
From what reads like a bit of a puff piece about Jack Welch [1], who became Chairman and CEO of GE in 1981:
"Under Welch, GE exited many of the traditional markets it had competed in for years, like consumer appliances and air conditioning, and entered completely new areas like medical technology, finance, television and services."
During the restructurings, Welch laid off 100,000 or so people (depending on how you count), earning him the nickname "Neutron Jack". He also instituted the policy of firing the bottom-performing 10% of managers each year [2].
The longevity of these kinds of organisations is a hint that they've survived other disruptions before.
We're engaging with more enterprises at Pivotal than we used to.
They're all different.
Some "get it" really quickly and pow, off they go. Most of our repeated Labs engagements with such customers are because they're trying to transform as quickly as possible by seeding teams all across the org.
Others enterprises need, uh, repeated examples.
Some will presumably never get it. And yeah, they'll find one day that the party is over.
But, to repeat, they're all different. Applying a single rule (enterprise slow, startup fast) to heterogenous situations is a going to pay rich returns ... but not to the venture funds.
My personal business model since around 2002 or so has been to try to join disruptive teams within established firms.
Before that I was working in early-to-middle-stage startups ( but not startups in California ).
What I've seen is that you can actually bring something to "market", and the rest of the company will do everything it can to scuttle it. "The rest of the company" is busy keeping the old fires burning. So you don't get buy-in.
I've seen people leave relatively no-risk millions on the table to scuttle these things. But the main body of the organization is able to overemphasize risk in a way that leads to scuttling.
You'd have to have somebody fighting for the thing full time. Even then, it's not enough. I also won't say it's not that the others simply do not understand what was done. and to be fair, the engineering staff weren't really up to it anyway. When you've adapted to just duct tape fixes, it's hard to embrace a real fix. This, and the people at the coal face of these "products" proved less than capable of deployment.
Bluntly, people like having a buggy product or process to charge hours to. it's less work to jigger or abandon any measurement of defect rates and appeal to nostalgia. Management likes having "engineers" actually just doing clerical work because there's then no deployment cost. And frankly, we probably got it all done too cheaply.
I'm in the process of abandoning that model and going to work directly for the customer ( not a customer of any of the firms I worked for, of course ). This is a "firm" that's going from having contractors do maintenance to taking it "organic".
To quote Walt Kelly - "We has net the enemy, and it is us."
Yes, this -- don't think that just because a big company throws words and money around that they are going to change. There can be many in middle management who either don't want change;or are too set in their ways and unwilling to learn what it takes to change ;or are simply too incompetent to change. Look at Yahoo.
I agree with you, actually. I've seen before that upper management can be shown the advantages quickly, and folks at the coal face can be shown the advantages quickly.
People in the middle, whose reckoning includes career prospects and health insurance and worrying about mortgages and where their kids will go to school, tend to lean towards the "never take a risk ever" school of thought.
And a lot of corporate cultures are built on punishment and reward, distributed veto powers and a fondness for finding a neck whenever something goes wrong.
To be most competitive in today's environment, GE should be broken up into separate companies listed separately on the stock exchange so that management can focus on improving a single (if large) product line.
For example:
1. Jet Engines and electric turbines
2. Railroad locomotives
3. Appliances
4. Medical devices and imaging and all other things medical
5. Lighting.
The market values to shareholders would be higher.
The firms could focus on their one product line and would have to work harder against competition since there will not be cross subsidizes.
The smaller firms could also be more responsive to markets and respond more quickly because there would be less bureaucratic inertia.
>> giant enterprises are ignorant and ripe for disruption because of their arrogance -- the classical model of hubris
Was this the main reason for disruption ? as i understand it, most often it came from knowing that disruption most likely will greatly reduce revenues/profits and hurt the stock , at least at the short term, coupled with a short term focus that's just embedded in our economy.
The hubris was mostly just talk.
Also a question since you come from the field: how does predix compare with the thingworx OS(which seem to be extremely capable, but expensive) ?
So the key thing is: from where I'm sitting, GE are actually serious about this. Really serious. They are not alone.
There's this cliché that big companies are all sitting around, waiting to be disrupted, blissfully unaware that someone in the Valley is going to kill them.
It's getting to be a less and less plausible strawman. Those business leaders are reading the same books, hearing the same ideas and -- crucially -- many of them are consciously seeking out people who can teach them (including, I guess this is a disclosure, Pivotal Labs, our consulting/coaching wing).
Enterprises now want to disrupt themselves, because it 1) hurts their existing competitors and 2) creates moats against startups.
The strawman that giant enterprises are ignorant and ripe for disruption because of their arrogance -- the classical model of hubris -- isn't true.
Hubris cuts both ways. It's the Valley that's becoming lazy and complacent, assuming that they have a monopoly on interesting problems, on big revenues, on agile and lean development.
The barbarians used to be at the gates of Rome. Now the Romans are at the gates of the barbarians, and they're much more heavily armed.