By Jay Greene and Jon Ostrower
Boeing Co. and its AerData and Jeppesen subsidiaries will move
cloud-based versions of their aviation analytics applications, used
by more than 300 airlines, to Microsoft Corp.'s Azure cloud
computing platform.
Airlines use the apps to predict maintenance needs and optimize
fuel consumption.
Currently, airlines using the apps run them primarily on their
own servers. Boeing has tinkered with cloud versions delivered over
the web, using platforms from Amazon.com Inc. and CenturyLink Inc.,
among others. But the variety of cloud systems threatened to strain
Boeing's cloud-computing expertise, said Kevin Crowley, Boeing vice
president of digital aviation.
"It just became apparent that we needed to centralize around one
[cloud] technology," Mr. Crowley said.
Boeing will shift to Azure. Judson Althoff, Microsoft's
executive vice president of world-wide commercial business, said
that will allow Boeing to analyze a larger set of data provided by
customers and other sources of information.
"You can drive more effective and more accurate models," Mr.
Althoff said.
The shift to cloud computing is part of the plane maker's
long-term ambition to grow its commercial and military-services
business to about $50 billion in annual revenue by 2025, according
to a senior company executive, a massive expansion from its
estimated $15 billion today.
Boeing's shift to cloud computing also reflects the increasing
role of internet connectivity aboard commercial aircraft. Once
self-contained islands of information and computing, airplanes are
becoming nodes on a global network, with pilots and airline staff
adapting their operations in real time as conditions change.
Over the long term, Boeing envisions a suite of applications
that could improve aircraft efficiency in real time, cutting fuel
consumption by around 10%. That saving is substantial when compared
to the investment in an all-new jet that brings 20% savings.
Boeing had already begun rolling out the cloud-based software
with its Amsterdam-based subsidiary AerData and will complete its
transition more broadly over the next 12 to 24 months, said Mr.
Crowley.
Boeing acquired AerData, which manages airplane and lessor
maintenance records, in 2014. The move to the cloud increases the
ubiquity and portability of records, often a key determinant of the
continued value of a commercial jetliner and the ease of
remarketing an aircraft for lease to its next operator.
Microsoft plans not only to provide the technical backbone for
the service but also to help Boeing sell the software. And
Microsoft's sales force will be compensated for Boeing customers'
use of Azure.
"This is very emblematic of the future for Microsoft," Mr.
Althoff said.
The deal helps Microsoft as it works to keep pace with the
leading provider of cloud infrastructure technology, Amazon.com
Inc.'s Amazon Web Services. Microsoft has worked its longstanding
relationships with large corporations, helping them make the shift
to the cloud, in an effort to catch up with AWS, which has used its
success with younger companies born in the cloud era to win over
those same corporate titans.
The deal is "a notable win" for Microsoft, illustrating its
ability to push into industry-specific offerings, said Gartner Inc.
analyst Ed Anderson. A week ago, Microsoft announced a partnership
with General Electric Co. to run its Predix software platform,
which analyzes data from industrial machinery, on Azure. Predix
already runs on Amazon Web Services. GE is Boeing's biggest
supplier of jet engines.
For Microsoft, the Boeing deal, like the Predix announcement,
represents an emerging battleground in cloud computing. Microsoft
and such rivals as AWS will compete in machine-learning software
that can analyze and make predictions based on customer data, as
well as internet-of-things offerings that analyze data from
sensors.
The deal sets up Microsoft to offer such services to industries
beyond air travel.
"It's all aspirational and intentional rather than real at this
point," Mr. Anderson said.
The airline industry is rich with data to analyze, and Microsoft
rivals are also angling for pieces of the market. New jetliners,
like Boeing's 787 Dreamliner, generate more than half a terabyte,
or 500 gigabytes, of data during a single flight from their
thousands of onboard sensors, according to airlines.
A month ago, International Business Machines Corp. struck a deal
with in-flight wireless provider Gogo Inc. to alert airline pilots
to turbulence, using information from IBM's $2 billion acquisition
of The Weather Company.
Write to Jay Greene at Jay.Greene@wsj.com and Jon Ostrower at
jon.ostrower@wsj.com
(END) Dow Jones Newswires
July 18, 2016 16:09 ET (20:09 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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