Listening to Dave Yarnold, CEO ServiceMax during the keynote at Maximize 2017, I didn’t expect to hear anything but shining praise for GE Digital, it’s ‘big brother’ from the year old acquisition. And so it was.
But then Yarnold did something very unexpected. Alongside showing how GE had achieved value in the first year under its ownership, Yarnold also showed how customers more broadly are continuing to derive value (see photo above). That’s comforting because the risk in an acquisition of this kind is that the allure of the big customer (in GE) can mean a loss of focus on the remainder of the customer portfolio.
Deep and broad
Any notion that was going to be the case was quickly squished when ServiceMax fielded not just a big (as in humungously big) customer in the shape of Schneider Electric, but at the other end of the scale, they showcased Thermondo, a startup that, according to the blurbs ‘is a an integrated energy company offering state-of-the-art energy efficiency services. Thermondo became the largest installer of heating solution in Germany applying digital process excellence and quality management.’
Then and now
Later in the day, I had a conversation with Yarnold to bring diginomica readers up to date on progress since the acquisition. Derek duPreez met with Yarnold in January. At the time Yarnold said:
I think as we start to look forward, we’re not only going to look at manufacturers, but also consumers of capital equipment. So people who use those assets and who have massive maintenance operations – how do we help them become more productive in their businesses?
These are some of GE’s more traditional customers – in the transportation business, in the energy business, in the healthcare business, in the oil and gas business. All of those are heavily capital intensive and they have massive maintenance operations. So I think for them to go and offer not only hardware equipment, but also solutions to help their customers become more productive and efficient in their maintenance operations, that’s big payback on trillions of dollars worth of equipment.
In talking to Anup Sharma, Vice President, Chief Information Officer & Chief Application Architect GE Digital I discovered that both companies have made significant progress, not just in technology and its use but in thinking about how digitizing service experience on the ground. Today, Yarnold will not go so far as to say ‘job done’ but it’s clear that things are moving along apace:
When we first turned up so to speak, very few people inside GE knew who we were. We’ve reached more than 12,000 field service agents. That’s a good achievement. But let me say, we’ve not touched the sales organization yet.
I had to do a double take on that one because in one of the slides shown during the keynote presentation, ServiceMax showed it has already delivered revenue and productivity improvements. Right now, it’s a moot point whether field service agents morph into quasi-sales roles. The current thinking is probably not but then I can see how field service and sales come together in exploring the emerging role of predictive planned maintenance as a way of eliminating unplanned downtime.
At the same time though, I was concerned about what’s next in terms of progress in the integration between ServiceMax and GE Digital and whether this means that some customers get left behind.
Calming frayed nerves
Yarnold acknowledged there was initial anxiety among customer but assured me that’s not the case, evidencing the breadth of customer that ServiceMax reaches and the fact that the company’s exposure to many business types means it is well positioned to come up with inventive solutions that can both be industry tailored yet retain horizontal appeal. At the same time, ServiceMax has proactively shared information with customers so that non-GE customers can see the enhanced value proposition.
I think that our core market has been OEM’s who generally produce complex products who have meaningful service organizations. And we’ll continue to do that and we have continued to do that. So, all that growth I talked about, that’s all our core business.
Green fields to mow
On the GE side, there’s plenty of ‘green fields’ for ServiceMax to mow.
So, when you think about utilities and airlines and railroads and oil companies, we haven’t done any business with them yet. So, the expansion is building out the product in a few ways that we’ve identified how we’re gonna do that. And part of it is integration into Predix, APM capabilities, leveraging the data, which is meaningful in those industries. And then harnessing the sales organization internally and the leverage that we’re gonna get there to move into the installed base.
So, there’s a product expansion and then there’s this installed base leverage, and then there’s the whole GE sales organization that we have not trained yet.
Does ServiceMax have influence in the technology decisions? Yes it does. GE sees Predix etc as applicable to very large organizations while ServiceMax brings the field service element to the heart of the offering in the context of IOT.
We have the ability to make sense of industrial IOT data and do something practical with it, as opposed to it just being an acronym or a buzz word. We have a real application that yields economic benefit that customers say, “Yeah, that makes sense to me. I can get going with IOT.” So, I think that’s a massive enterprise opportunity overlaid on top of this big opportunity where GE is really strong and knowledgeable.
It will be interesting to see how ServiceMax’s strategy progresses. Yarnold acknowledges that even from the inside, GE looks gigantic and so rather than try pick everything off, ServiceMax is looking to find opportunities where GE’s industry leaders are willing to participate. For now, the company is focusing on power utilities and oil and gas with options to add more industries as they gain experience about the best ways to approach each market and then develop for the technical nuances of those industries.
Let’s be very clear. We’re not getting out of service. There’s a lot still to do but augmenting for asset performance and maintenance is an obvious and logical next step.
As our conversation came to a close it seemed to me that the fit between GE Digital and ServiceMax from both a technology and business perspective has been well thought through.
More important, the progress to which Yarnold alludes showed me there is no loss of focus following the acquisition. Rather, there has been an expansion of vision that dovetails to the needs of industry as each moves, at its own pace, to a world where service provision becomes the core operating model.
That should keep customers happy and in the end, that is what matters.
My one wish is that we hear more from customers and to that extent, we’ll be raising that topic from time to time.
Image credit - via the author and ServiceMax
Disclosure - ServiceMax is a premier partner at this time