General Electric’s Predix And Microsoft’s Azure To Ink Partnership

Software giant Microsoft and industrial conglomerate General Electric are expected to announce the formation of a partnership involving the Azure cloud platform and Predix industrial software. According to GE Digital’s chief executive officer, Bill Ruh, the partnership will see the broader integration of General Electric’s Predix applications with Microsoft’s cloud software.

The agreement between the two companies is expected to be formally announced by the chief executive officer of Microsoft, Satya Nadella, and by the chief executive officer of General Electric, John Flannery.

Industrial and mining firms

Initially the partnership will focus on mining and hydrocarbon firms though it would also apply to other sectors that use software developed by Microsoft. The deal comes in the wake of General Electric inking a similar agreement with Apple. Predix was developed by General Electric with the aim of connecting industrial equipment such as power plants and jet engines to computers with a view of predicting failures and consequently reducing operating costs.

GE and Microsoft’s partnership coincides with the latter releasing quarterly results that beat estimates. With regards to earnings per share Microsoft reported an EPS of $0.84 compared to $0.72 that analysts had projected. Revenue for the quarter was $24.54 billion compared to analysts’ projection of $23.56 billion.

Cloud business

Microsoft also managed to exceed its goal of reaching $20 billion in cloud business revenues.

“Reaching $20 billion would imply the commercial cloud mix could cross over 20 percent of revenue for the first time in 1Q18, up from 5 percent in early 2015,” wrote analysts at KeyBanc in a client note.

The largest software firm in the world also beat the estimates of analysts with regards to revenue from Azure which rose by 90% year-over-year. Azure is now bigger than Alphabet’s cloud business but is still lagging behind Amazon Web Services. Revenues obtained from subscriptions to Office 365 also increased by 42% while analysts at Piper Jaffray had estimated that the growth would be 30%. In the previous quarter the number of Office 365 subscribers was 27 million but this has now increased to 28 million.

With regards to Microsoft’s gaming business, revenue rose by 1% to hit a figure of $1.9 billion. Even though gaming hardware revenue declined, there was an improvement in revenues from Xbox services and software. The Redmond, Washington-based software maker is preparing to launch a new console, the Xbox One X, early next month and this is expected to spur gaming hardware sales.

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