GE plans to spin off its GE Digital business, including its Predix Internet of Things (IoT) platform, into a new, independent company owned by GE. The as-yet-unnamed company will start with $1.2 billion in annual software revenue from its existing customer base.

GE also announced that GE Digital CEO Bill Ruh has decided to depart GE to pursue other opportunities. The company intends to conduct an internal and external search to identify the CEO for the new independent IoT company.

GE first began marketing its GE Predix platform in 2016 as part of GE’s Digital business. And even as recently as last month, GE announced it was adding more edge capabilities to Predix.

However, earlier this year there were rumors that GE had hired an investment bank to auction off GE Digital’s assets. GE Digital was the brainchild of former GE CEO Jeffrey Immelt who’s vision was to transform the industrial conglomerate into a software company. Immelt created GE Digital in 2015, and later predicted that it would hit $15 billion in software sales by 2020. He also estimated that half of that amount would come from providing IoT applications to other industries. Immelt stepped down as GE’s CEO in 2017.

In October 2018, GE hired its new CEO H. Lawrence Culp. Rather than selling GE Digital, Culp has decided to spin it off as a separate, but wholly-owned subsidiary of GE. Once it is spun off early next year, it will have its own brand, board of directors, and equity structure. The new IoT business will provide software for industries with a focus on utilities, renewables, aviation, oil and gas, food and beverage, chemicals, consumer packaged goods, and mining.

While retaining most of GE Digital’s assets within the new company, GE is selling a majority stake in ServiceMax, a business that makes computer models for workforce optimization, to private equity firm Silver Lake. That transaction is expected to close in early 2019. GE Digital purchased ServiceMax in 2016 for $916 million.