Yesterday, at the Microsoft Worldwide partner conference, Microsoft and GE announced a strategic alliance to bring the Predix IOT platform to the Azure cloud. While the partnership is certainly relevant I was surprised by the immediate excitement about the news that included coverage in major media outlets and an exclusive interview by Microsoft CEO Satya Nadella and GE CEO Jeff Imme in CNBC. GE’s and Microsoft’s stocks both reacted slightly positive to the news.
The partnership is another step towards making GE’s Predix platform supported in mainstream cloud infrastructures such as AWS or Azure. Beyond the hype, there are some interesting points about the Microsoft-GE that I think are worth discussing.
The strategic alliance with Microsoft is a major step towards making the Predix IOT platform available in mainstream platform as a service (PaaS). A few weeks ago, GE announced a similar alliance with HP Enterprises (HPE) to distribute Predix as part of the Helion Stackato platform (I wrote about that partnership here). This type of partnership provides Predix with a new distribution channel and a large ecosystem of system integrators and developers.
Predix Needs a Better Infrastructure
The announcement of the partnership with Microsoft comes a few hours after the publication of a report from analyst firm Lux Research in which Predix was portrayed as “a fledgling startup, has underdeveloped technology and lags in market penetration compared to its marketing.” While I don’t agree with many of the points of the report, it’s undoubtedly that Predix’s underlying infrastructure is relatively unsophisticated compared with PaaS incumbents like Azure, AWS or Bluemix. As a result, running Predix in other PaaS infrastructure allows GE to alleviate some of those concerns and focus on innovating in the IOT capabilities of the platform.
Standalone IOT Platforms are Having a Hard Time Competing Against Mainstream IOT PaaS Solutions
From the IOT market perspective, the GE-Microsoft partnership is another example of how standalone IOT platforms are having a difficult time competing against the IOT offering included provided by the cloud incumbents such as Azure IOT Suite, AWS IOT or Watson IOT Platform. While many of the IOT capabilities can be considered comparable between standalone IOT platforms and PaaS IOT services, the latter offer a broader number of infrastructure and platform services that enable the implementation of more robust IOT solutions.
Azure is More Important than Azure IOT
The obvious question about the Microsoft-GE partnership are the implications for the Azure IOT Suite which technically competes with GE Predix. The answer is very simple: anything that increases the market penetration of the overall Azure platform is more important than any individual capability. From Microsoft’s perspective, the goal is to dominate the cloud market and not necessarily the IOT space.
Are AWS, Google and IBM Next?
First HPE, now Microsoft, should we expect to see new Predix partnership with other mainstream cloud platform providers? Amazon, Google and IBM are the obvious candidates. AWS seems to be a clear choice as they are in a similar position as Microsoft in terms of IOT market penetration. Google also seems like a good option as they currently don’t provide IOT capabilities as part of its cloud platform. IBM might be a harder sell as they seem to be really invested in dominating the IOT market and they have put significant investments towards enhancing its Watson IOT platform.