Here's what GE CEO Jeff Immelt means when he talks about the 'Industrial Internet'

General Electric has been working on remaking its image.

As part of the makeover, CEO Jeff Immelt has been throwing around the term 'Industrial Internet.'

If you're wondering what that means - and why a company that started out manufacturing light bulbs is talking about digital innovation - Immelt shed a little light on his thinking at Business Insider's IGNITION 2015 conference on Wednesday.

"When I talk about the industrial internet it's really capturing data off of machines and throwing back into valuable insight for our customers," Immelt said. "That's going to be worth trillions of dollars in the economy and I think it's going to transform GE."

Essentially, GE captures data through sensors that are attached to the various things it manufactures, like trains.

"The data fundamentally is going to be modeled and turned into performance outcomes," Immelt explained.

The problem they are trying to solve is declining industrial productivity. To do so, the company has created its own cloud-based operating system that's open to developers.

"We're going to broaden out an operating system and applications on our assets and on competitors assets and industrial assets," Immelt said. "And that's probably the most exciting thing I've worked on in 30 years."

Tracking trains

For example, Immelt said, a train might have 300 sensors pulling a terabyte of data on a one route, including things like fuel and emissions performance, and pictures of the track to show whether there are cracks.

"So that's all valuable information, all coming off a control center that we have on the locomotive," he explained.

How might it be used?

Immelt said that an average train goes 22 miles per hour. But if it could go 23 miles per hour, it would be a $250 million difference - or a 20% improvement in profitability for its operator.

"That's going to be done with information and data," Immelt said.

The beneficiaries will include GE itself, which can make better locomotives, and other customers who buy the data, or subscribe to the open, cloud-based operating system to make their own improved products.

"There's going to be a couple of industrial companies that get transformed as part of that, and we want to be one of them," he said.

Read more about the IGNITION 2015 conference here.