General Electric Company: New Hires Make GE a Solid Software Play

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If the rumors are true — and they likely are — Apple Inc. (AAPL) has now lost two of its key software engineers to General Electric Company (GE), further disrupting an already-tense situation for Apple CEO Tim Cook. Owners of AAPL are understandably concerned, though truth be told, Apple’s side of the drama isn’t the one to watch.

General Electric Company (GE): New Hires Make GE a Solid Software Play

The crowd that should be taking notes and asking questions are owners of GE stock, as the once-iconic industrial name has taken another big step toward not just becoming a software-centric play, but a game-changer within the cloud-based software arena.

It’s a huge opportunity for GE, yet few see it coming.

Apple’s Loss, GE Stock’s Gain

The headlines have been hard to miss … Apple’s head of cloud engineering Darren Haas reportedly left that company to join the ranks of GE. That possible defection follows a similar one rumored late last month, suggesting Apple’s chief cloud architect Steve D’Aurora had already done the same.

Both D’Aurora’s and Haas’ LinkedIn profits still cite Apple as their employer, but both moves are plausible in light of what’s become well-documented infighting in Cupertino.

Called “Project McQueen,” Apple is finally looking to move its storage needs stemming from its iCloud services in-house. Presently fulfilled by third-party providers (not to mention competition) like Alphabet Inc (GOOGGOOGL) and Amazon.com, Inc. (AMZN), by performing those cloud-based storage services themselves, Apple stands to save tens of millions per year.

Problem: Such a transition is no small feat, and inexplicably, Cook has not one but two teams working on the move, which will be accompanied by an overhaul in the way users interface with their iCloud service. One of those teams is the same team that developed and maintains Siri. The other team is the current iCloud team. The two divisions, in competition, are at odds to the point where D’Aurora and now Haas have simply decided to move on.

And that’s a very good thing for the future of GE stock.

What Would GE Want With Haas and D’Aurora?

At first glance, the rumored new-hires don’t seem to be game-changing additions to the General Eclectic team. While both Haas and D’Aurora are smart, experienced software engineers, their cloud-rich and artificial-intelligence-rich backgrounds don’t necessarily gel with an old-school industrial outfit like GE.

Those who know GE stock well, however, will know the company has already moved into the cloud and AI in a major way.

Yours truly touched on that reality back in February, pointing out the company’s all-encompassing Predix platform was an opportunity for General Electric to make everything — almost literally — better when it could be managed and monitored centrally, via the cloud.

As was also conceded at the time though, the opportunity was so overarching that it was tough to conceptualize. Besides, few investors were willing to view GE through software-colored glasses.

With Haas and D’Aurora now joining the company’s ranks though, it’s becoming easier to see General Electric in that light.

And it’s not as if the pair won’t have plenty to start working on from day one. In October of last year, GE announced it was aiming to move 9,000 apps from on-location hosts to the public cloud. That migration only scratches the surface of the new GE, however.

Although General Electric recently sold its Internet of Things appliance business — arguably one of the most advanced in the segment of the appliance market — they’ll still carry the GE name.

Meanwhile, just this week General Electric unveiled what it’s calling an “Industrial Dojo” … a collaboration with the Cloud Foundry Foundation ultimately aimed at accelerating the melding of industry and cloud-based management.

Haas and D’Aurora will most certainly be able to contribute on that front, perhaps developing a user-friendly aspect of the Predix platform.

Bottom Line for GE Stock

Although General Electric has many cloud software initiatives that are already en route to helping it gain the software powerhouse (producing $15 billion worth of annual software) revenue it vowed to achieve by 2020, the initiatives that should be most exciting to current and future owners of GE stock are the ones yet to be seen.

It wasn’t hyperbole to suggest the Predix opportunity, and all of its ancillary opportunities, are so big that investors cannot actually see them. Indeed, it’s conceivable that even GE doesn’t fully know where it could go; it’s a very open-ended platform.

However, one thing is certain: Most aspects of our lives are increasingly being digitized, and while service providers like Apple and Amazon have addressed the consumer side of that evolution, the enterprise side of that coin has been left mostly untapped. It’s the bigger opportunity of the two, and General Electric is playing to win it all.

Haas and D’Aurora will put them at least one-step closer to that goal.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/05/general-electric-ge-stock-new-hire/.

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