General Electric is setting up shop in Silicon Valley as part of a plan to invest $1 billion in software development over the next three years. The company will hire 400 software engineers over the next two years at a "technology nerve center" in San Ramon. They'll be focused on what the company calls "the industrial Internet" — devices that provide real-time information about operations on a seamless digital platform. SiliconValley.com quotes Bill Ruh, a former Cisco executive who will head the center, as saying:

This is really going to be the next generation for the Internet. We want to connect devices and machines with each other and with the Internet.

GE already has 5,000 engineers working on this kind of thing, which will add about $2.5 billion to its kitty this year, though that comes to just over 1 percent of its overall sales of $150 billion. Railroad operator Norfolk Southern is among the software clients of GE, a company better known for building jet engines, wind turbines and health care equipment. Carl Weinschenk at IT Business Edge has written about the huge market potential for machine-to-machine communications, but it's a challenging undertaking that could take a long time to pay off.