Yesterday, one of the Green Growth Fund’s portfolio companies, ServiceMax, announced that it is in the process of being acquired by GE Digital. This announcement not only represents a significant step for GE’s software and analytics platform as it adds a field services offering to its portfolio, it also highlights the massive opportunity for software companies to help drive the growth of what we call the Industrial Awakening – a world of smart, connected, digitally optimized products.
We are in the first phases of an epochal shift as billions of the world’s industrial assets come online. As this ecosystem of connected products from pumps, rigs and generators to wind turbines, air conditioners and solar panels continues to build momentum, ServiceMax sits in a very strategic position on the Industrial Internet of Things (I-IoT) value chain.
At the Green Growth Fund, we’ve identified five key stages to this value chain:
1. Networked Sensing: Establishing billions of connected endpoints
2. Data Aggregation: Collecting and standardizing information from a wide range of equipment types and protocols
3. Data Analysis: Leveraging this collected information to determine how to operate these assets more effectively
4. Connected Services: Utilizing the output of this analysis to take action in the field
5. Connected Applications: Re-imagining business processes once assets are networked and data is being aggregated, analyzed and acted upon
As a Connected Services provider, ServiceMax owns the 4th step of this value chain. Its software enables users to translate the output of their operations and IoT analytics projects into actual work in the field. In this way, it helps thousands of field technicians manage their daily work, enabling them to know where to go, what to have in their vehicles, how to perform their work safely and effectively, and how to get the appropriate approvals to get paid for their work.
The company is unique in its industry with an incredibly high-quality customer base, a forward thinking technology team led by founders Athani Krishna and Hari Subramanian, and a world-class executive team led by Dave Yarnold and Rick Gustafson. We first met ServiceMax in 2013 as we helped another portfolio company evaluate Field Service Software offerings for its own workforce, and it was clear from our first conversation that this was a special company. We were fortunate to have invested in 2014 and now look forward to the next phase of the company’s growth as it becomes a vital part of GE.
The purpose of adding connectivity to the trillions of dollars of global industrial assets is to run equipment more safely, efficiently and profitably. To achieve this goal, GE has announced significant investments in its Predix platform to develop the software ecosystem for data collection, aggregation and analysis. ServiceMax will now give GE the ability to act on the data it collects, managing the actual work and repairs that are identified through Predix-derived analytics. This has the potential to create an end-to-end Industrial IoT platform that can optimize operations for the tens of billions of devices coming online. It is an ambitious and worthwhile proposition – one that reflects GE’s desire to redefine the boundaries of both industrials and software companies.
As ever, we are excited about the digital revolution of industry and the role that technology companies led by exceptional teams will play in this transformation. We are proud to have worked with ServiceMax over the last 3 years and wish them the best as they join forces with a formidable 124-year old software startup.
David Mount is a partner in the Green Growth Fund at Kleiner Perkins Caufield & Byers, which supports young companies leading new markets in sustainable ways. David is focused on software and services investments applicable to the energy and industrials markets. .