
G.E., the 124-Year-Old Software Start-Up - petethomas
http://nytimes.com/2016/08/28/technology/ge-the-124-year-old-software-start-up.html?referer=
======
bradrydzewski
I spent 10 years working at GE before I left for SF and the startup world. I
was a software engineer at a time when GE was shipping software engineering
jobs to India to cut costs. The GE vision for software engineering was that of
an assembly line, staffed by large quantities of low wage employees.

GE outsourced the majority of its technical jobs to offshore firms. I remember
hearing a statistic that for every 1 GE employee in the technology department
there were 4 offshore consultants. The role of GE employees in the technology
department shifted from a technical skill-set to a managerial skill-set. Many
of my co-workers had degrees in finance and marketing, and had never written a
line of code in their life. The lack of technical expertise within the
organization created what I would call a culture of fear, where people feared
the software they managed because they didn't understand it.

The official term for offshore software engineers was GDC. I have no clue what
the acronym stood for, but over time it certainly become a derogatory term. I
remember being mocked by my co-workers for writing code and being nicknamed a
GDC (as in, why would you do the work we pay people pennies to do). It was
almost like a caste system within the company, where these GDC employees were
low paid and looked down upon by many.

The offshore model certainly was ineffective and the result of employee
discontent, however, the practice was continued and mandated at the executive
level. Then the economy crashed. GE decided it was finally time to bring jobs
back to the US and hire software engineers. Why? Because they were able to
take hundreds of millions in federal tax subsidies from US tax payers. (As an
aside, someone mentioned GE moving its HQ to Boston to be closer to
engineering talent. Taxes are still the main driver here)

GE soon began hiring US software engineers at a number of designated centers
where they were segregated from the rest of the company. The interesting thing
is that culturally these employees were largely treated like their GDC
predecessors. The perception of software engineers being low-wage assembly
line employees was, in my opinion, just too engrained into the company
culture.

So when GE describes this transformation to a software company, I believe the
most important aspect of this transformation will be changing the company
culture and employee attitudes toward software engineers. They will need to
undo a decade long effort to turn engineering into an assembly line.

~~~
Animats
_" GE soon began hiring US software engineers at a number of designated
centers where they were segregated from the rest of the company."_

That still seems to be the plan: "The San Ramon complex, home to GE Digital,
now employs 1,400 people. The buildings are designed to suit the free-range
working ways of software developers: open-plan floors, bench seating,
whiteboards, couches for impromptu meetings, balconies overlooking the grounds
and kitchen areas with snacks." There are pictures on the GE Digital site.
What you don't see are workbenches with electrical products hooked up to
computers. They're not doing embedded software.

This has an impact on product design. The GE Digital site says: "One million
terabytes per day … that’s how much data Predix will process by 2020." They're
thinking "big data", where all this stuff is shipped to the "cloud" for later
analysis. The alternative would be digesting it near the source and only
sending in the interesting stuff. They're going to collect gigabytes of
"Bearing 22 temp 18 C", which is only important if the value is out of normal
range or shows a trend.

The alternative would be some smartphone-sized device which listens to the
data from your turbine or jet engine and finds the good stuff. But that
wouldn't justify expensive cloud services, fees, meetings, etc. Even if it did
exactly the same thing, GE couldn't collect huge fees for a smartphone-sized
analysis device.

~~~
trevyn
Right, but how do you see the trend in context without storing all the data
centrally?

I could see something like this powering Bret Victor's "seeing space" idea,
which could be quite cool.
([http://worrydream.com/SeeingSpaces/](http://worrydream.com/SeeingSpaces/))

------
throwaway65498
Throwaway, as I work for a company that competes with GE in this space.

This is GE's business model. When they want to enter a space, they throw money
($B) at it until they have a business. They tend to prefer organic builout,
but they will buy companies or partner if they think they can't win
organically. If you're willing to do that, you almost always get some
traction, just because you have unimaginable resources and are willing to
adjust your tactics if the initial gambit fails. They tend to do a lot of
advertising for key businesses - this is why you see GE Aviation billboards in
airports, and GE Oil & Gas ads in Houston.

The model has worked pretty well in the past - a good example is GE's entry
into commercial jet engines in the early 70s. A good example where it failed
was GE's computer business in the 60s.

I can't prove it (just a feeling), but I think Predix doesn't really have what
it takes yet. We've spent a lot of time studying it, and it doesn't seem to
offer real value to customers yet. That doesn't mean it won't get there
eventually.

However, if Predix doesn't do well, we expect them to go on an acquisition
spree to buy a few of the winners. Bently Nevada is a good example of that
play - GE controls something like 70% of the machinery protection market. They
didn't build it, they just went and bought Bently.

GE is clearly signaling that they badly want to be in this market, and I think
it's pretty likely they'll eventually get there.

~~~
predix_worker
I'm also on a throw-away. I work for the Predix team and its a giant cluster
fuck.

I think one month we had a 90% uptime. Our services crash all the time.

Our new boss has said he has around a 500-600 million budget for buying
interesting companies.

~~~
throwaway011101
Worked on a software project built on top of Predix. It was like building
software on quicksand how often predix and cloudfoundry would fail.

~~~
twic
What was the failure mode for Cloud Foundry? Going down completely, rejecting
commands, etc?

~~~
throwaway011101
It was my experience it was just "Bye Felicia"

BUT it might have been how our app was coded we weren't taking advantage of
some sort of built in failure hooks or something.

------
jacques_chester
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.

~~~
BurningFrog
> _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.

~~~
bdavisx
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.

~~~
jacques_chester
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.

But, again, they are not all the same.

------
beilabs
Travelled to China from Ireland to work with a Chinese software company.
Dragged in to work for GE, ended up across a lot of their divisions from 2005
for a few years. Worked out of Atlanta for some time

They did not have a software culture at the time, everything was outsourced.
Project managers did not have any clue of how to manage a software project
professionally, they struck me as more financial / admin types. India and
China were like wolves and GE threw projects to them expecting the lowest cost
to emerge as the winner.

Office was always dead on Friday, there was a culture to often work from home
but not actually work.

From my understanding at the time they used to cut 10% of the worst performing
staff every year, I believe they were one of the worlds largest employers at
the time. My biggest peeve was their culture of having meetings just to have
meetings....I think this issue can be found in most large enterprises.

My cousin now works for GE in Australia and says 'they are trying to become a
startup'. I'm not convinced, it's pretty cool to be called a startup but true
startups will only thrive in GE if they are left alone by management and
allowed to utilise large resources. It can work, small teams can make great
inroads for these types of organisations.

------
simula67
> Tech giants, including Amazon, Cisco, Google, IBM and Microsoft also have
> their eye on the industrial internet market, as do a bevy of start-ups.

This explains a lot of recent interest in IoT. Big companies like GE saw what
happened to companies like Kodak and want to defend their profits. They could
be entirely wrong, computing may not turn out add much value in these
industries. But GE probably don't want to leave that to chance.

~~~
ArkyBeagle
Industrial is a pretty staid, slow moving market. I'm out of it as soon as the
movers get here. It's fantastic, thrilling work but you can't get the people
in power to grok what you're doing.

It's sad and hard to do, but I've told a colleague who's trying to go into
this market ( we were both laid off this year ) "no", because the overall
culture isn't ready for it.

------
akhilcacharya
The fact that they air commercials to try to hire developers continually
amazes me. I don't think I've seen that before.

~~~
leeoniya
i find those commercials really weird. "Digital and Industrial" i think speaks
more to EEs (of which they have plenty) than to software developers, ML
experts, and/or data scientists.

~~~
ArkyBeagle
to my ear, D&I refers more to PLC guys, who are probably closer to being
industrial engineers than either EEs or software guys. I've talked to PLC
vendors before; they aren't familiar with what it would take to actually do
... more ambitious industrial control. Basic stuff like filters and modest
machine learning is a bit beyond what they offer. It's ladder logic and
cabling.

PLC inventories are measured in decades, not years.

It's honorable work, but it's not to be confused with software development.

------
tedmiston
> Today one of San Ramon’s most important projects is to build a computer
> operating system, but on an industrial scale ... The project is central to
> G.E.’s drive to become what Mr. Immelt says will be a “top 10 software
> company” by 2020.

Does anyone know of such a list that's a genuine reflection of reality?

~~~
devonkim
The "top" idea is really murky because there's so many ways to define leading.
I'll make a large bet that GE Digital will not be top at the following for
developers due to so much inertia in IT and software in the company being
cost-centric rather than innovation-centric:

\- Pay / comp \- Perks \- Perceived difficult technical problems

They may win on number employeed (they just announced a big software
development office in India) or perhaps when comparing these figures to
competitors like Honeywell, Caterpillar, Phillips rather than the big, high
value brand software companies.

This isn't to say that this means failure. Perhaps they can win on cultural
perception (say, work-life balance) or career growth and capitalize upon a
backlash against Silicon Valley engineer lifestyles. But everything I've seen
about Predix from a customer and engineer perspective, which is what they're
betting an awful lot on, is hardly compelling to me.

~~~
maxxxxx
This reminds me of my company. The IT department is also calling itself
"Digital" now and they are pushing themselves more and more into all company
divisions. But they are managed by people who don't have passion for or
understanding of technology. Sometimes it feels like the leadership is afraid
of technology.

They just know that "Digital" and "Big Data" are big now and they have to get
into it. It reminds me of the internet bubble times when lots of companies did
"internet" without knowing what it really means.

------
mathattack
There are a lot of positive things about GE but let's not call it a startup.
It's just not wired that way.

------
ww520
Didn't GE used to do stack ranking review and fire the bottom 10% annually?

~~~
brandonmenc
Yes, but you had a few chances to get out of the bottom.

You had to be a "C-player" for something like three consecutive review periods
before you were let go.

(source: my father was a manager at GE for decades)

~~~
protomyth
Do they still use stack ranking?

------
vnfkcmchdjxnc
You know you're in a bubble when a company manufacturing jet engines and
locomotives tries to rebrand itself as a big data web startup.

~~~
gaius
Or when a company that's just a website is worth more than chains of actual,
physical hotels.

~~~
cylinder
Actually most hotel chains do not own the hotel real estate, they are
management companies.

------
BooneJS
> “We had to be more capable in software,” Mr. Immelt said he decided.

I hate to be snarky, but I suspect this is not how GE Digital actually came
about.

~~~
gist
Actually I hate to be snarky but big CEO's like Immelt that is kind of they
way they operate. By gathering and processing big thoughts and issuing
directives. It's probably one of a thousand things that he said to people, the
other 999 the troops found out and told him didn't have any merit.

------
keithpeter
_" Matt Krause, the plant manager, said that last winter, when a snowstorm
shut the factory for a day, the sensor network detected that the plant had
consumed 1,000 pounds of argon, an inert gas used in coatings for parts. The
leak was fixed, saving $350,000 a year."_

By my (suspect) arithmetic, that is about 200 cubic metres of Argon at STP in
one day. Do they have the stuff on mains around the factory?

~~~
iheartmemcache
Not a materials scientist but argon-oxygen is a common first step in plasma
cleaning surfaces (critical especially for allowing whatever you want to CVD
to adhere properly to certain metals) before applying primer. (It's also used
in nitride hardening aluminium.)

Considering how large GE is, I wouldn't be surprised if they had it 'on tap'
in a PLT automation network and they take bulk delivery from a supplier every
month or two. and some bad process engineer forgot to add a sensor check in
loop (or his manager just told him to "screw it, argons cheap, no need to add
a flow meter to this process" as a cost cutting factor).

------
lgleason
I worked on one of the projects that C3 was involved in as a GE employee and
agree completely with Seibel's assessment.

Some things I observed:

#1 I watched a top software development company that was doing a great job get
fired because they told GE that a desired deadline was impossible. One of the
reasons the non-technical manager who fired them gave for the termination was
that he didn't feel like they wrote enough lines of code.

#2 A very corporate culture. Developers could not wear jeans in the office.
You needed come to work in business casual or dressier attire. And this was
one of the innovation centers.

#3 A "corporate" rollout of TDD where a bunch of enterprise developers who
hated TDD were given TDD training and then had no requirement to use it for 6
months....plus none of the other practices that go with it. In the end most
devs never adopted the practice. (I am a TDD advocate and trust me I tired to
get them to use a different approach but it was like talking to a wall)

#4 Crazy bureaucracy to get anything done. Servers need to be in a private
double secure cloud (for non production non sensitive components) and
developers worked for over a year with out any actual servers to run code on,
and were not allowed to stand up servers under you desk as a stop gap due to
corporate security. It would even take weeks to even get basics like office
supplies that had to go through a special workflow.

#5 During this period of no servers, I was in charge of getting the CI
infrastructure set up. One time I had a six sigma black belt ask me the status
of the project. When I told him it was on hold due to lack of infrastructure
he said "Lack of servers is no reason for not being able to roll out CI in our
organization"

#6 Lots of training for things not needed for your job. Six Sigma (the only
useful thing was lean which could have been taught in a quarter of the time).
There was a good 20-40 hours of mandatory training per year (at least) for
things relating to corporate compliance, safety etc., but not things relating
to your job.

#7 For one project the use of Javascript was prohibited in favor of using a
server side technology that generates it because the enterprise architect
thought it would not be realistic to expect Java developers to learn or be
able to also know Javascript.

#8 It was like pulling teeth to get time off to attend a conference even if
you paid for it with your own money.

#9 Lots of C-player engineers were promoted because they could play the
politics while the good ones who actually could get things done/code left.

All of this was over a 2 year period just a few years ago, after Immelt
declared they were a software company at one of their newly established
"Innovation/Centers of Excellence". Needless to say I have moved on to more
interesting work.

Though this is a little better than what was described during their
outsourcing binge I just don't see GE ever really being able to take on
software effectively. Their corporate culture is just not set up for it. They
would be much better either having completely separate divisions that they own
a stake in but do not manage in any way/shape/form or partnering with
companies that do software well.

I would love to be wrong, but my guess is that a few decent engineers will
join based on the slick ads, and maybe a updated office, things will fall
apart and they will move on.

~~~
protomyth
> he didn't feel like they wrote enough lines of code.

Say what you want about Steve Balmer but he had the right attitude towards
that
[https://www.youtube.com/watch?v=kHI7RTKhlz0&feature=youtu.be](https://www.youtube.com/watch?v=kHI7RTKhlz0&feature=youtu.be)

As to the rest, I get the feeling that a lot of players in the market that now
need software have the exact same tales being told about them. It is going to
be a wonderment to me if I will be about to get through a day in 10 years
without a IoT failure.

~~~
lgleason
Given what I saw I'm amazed that any of their software actually works. Perhaps
Predix will buck that trend, but I still posit that this would be the
exception not the rule for them. What I can say is that I worked for a number
of other large companies and the only other company that came close to having
this level of inefficiency was a defense contractor. While some of these other
large corporations had a some WTF moments for me GE had a much larger number,
but it is a large organization so other's experiences may be different etc..

------
kqr2
GE had a commercial blitz during the recent Olympics touting that they are a
digital company:

[https://www.youtube.com/watch?v=YDbfudoXjBM&list=PLxRhTjvLly...](https://www.youtube.com/watch?v=YDbfudoXjBM&list=PLxRhTjvLlyoIXJLwUxoQFx7Erz_FUPkJ9)

------
graffitici
> Tech giants, including Amazon, Cisco, Google, IBM and Microsoft also have
> their eye on the industrial internet market, as do a bevy of start-ups.

The article doesn't mention any startups. Any ideas what startups could be
potential disruptors?

------
NhanH
> The San Ramon complex, home to GE Digital, now employs 1,400 people. The
> buildings are designed to suit the free-range working ways of software
> developers: open-plan floors, bench seating, whiteboards, couches for
> impromptu meetings, balconies overlooking the grounds and kitchen areas with
> snacks.

It's official now, we're just chickens to the world.

So the meme finally sticks and now we're screwed for the next decade? Who do
we blame for the idea that "impromptu meetings" and those baloney is the way
of working for programmers?

~~~
jacques_chester
I'd be interested whether they've adopted pair programming or not.

I've worked open plan solo and paired.

Solo: I have ADHD. It's a _nightmare_.

Paired: I have ADHD. I barely notice the background.

~~~
mwfunk
I wonder how strongly pair programming is correlated with open office plans.
Depressing if true, but if pair programming offsets the distraction of open
plans, there may be cases where it's more viable for a company to simply hire
twice as many developers and save money on office space, just to get out of
having to give people offices.

On the other hand, it seems like people doing pair programming in open plans
would contribute to the overall noise and distraction- a warehouse full of
pairs of people talking all the time would also be a bad scene. :(

~~~
dasmoth
Office space isn't that expensive.

While cost IS a factor, the idea seems to be going round that open plan is
genuinely superior. (Although rarely so superior that the executives
partake...)

~~~
gaius
Right, startup companies do open-plan because it is cheap, not because any
actual developers are more productive or happier that way. It's supposed to be
something you put up with until the company can afford offices... Only that
point got lost somewhere along the way.

Hell why doesn't GE just remodel their offices to look like garages, because
_obviously_ that's the reason that Apple was successful...

------
davidf18
They should hire as CEO someone who helped build a software startup into a
large company to show the appropriate leadership. Otherwise there will be too
much corporate inertia and the old way of doing things.

Like Google, they should open up a large tech office in NYC, where many top
level software people want to live.

~~~
dadro
They are moving their corporate HQ to Boston where many top level software
people DO live.

~~~
davidf18
I lived in Boston (Inman Sq, Cambridge, later Back Bay, Boston) for 5 years
after my undergraduate education. NYC is far, far more interesting and
exciting than Boston. As an indirect indicator, NYC draws far more VC than
Boston.

~~~
iammaxus
Depending on the data that you look at, NYC and Boston are pretty close.
[http://www.theatlantic.com/technology/archive/2016/01/global...](http://www.theatlantic.com/technology/archive/2016/01/global-
startup-cities-venture-capital/429255/)

More importantly, Boston is much heavier into manufacturing technology,
hardware, B2B software, etc whereas NYC is more focused on consumer, retail,
fashion, etc. Boston is pretty clearly a better choice for GE.

In reality GE's HQ in Boston will represent a tiny fraction of their global
employees, though, so it doesn't really matter.
[https://www.bostonglobe.com/business/2016/03/11/huge-but-
its...](https://www.bostonglobe.com/business/2016/03/11/huge-but-its-future-
headquarters-will-anything-but/INqV8GezulQDnQI1tKBxFJ/story.html)

------
GFK_of_xmaspast
It's hard for me to think of General Electric without also thinking of Jack
Welch and those massive, massive layoffs.

~~~
Spooky23
Plus the legacy of purposeful pollution, stuff like stack ranking and other
scumbaggery.

They were a customer of mine, they used to incorporate pencils into leases of
capital equipment to reduce tax exposure.

------
wcummings
PR piece, bleh.

