GE's famous light bulbs might not be around in five years. Image source: Getty Images.

Industrial titan General Electric (GE -1.80%) is in the midst of a seismic shift in its operations. It's jettisoning most of its financial businesses and refocusing on its core industrial roots. It's already starting to look more like rival Honeywell than its former self.

Now that it has shed its systemically important financial institution (SIFI) status, GE's plans are moving full steam ahead. But where? 

Here's a glimpse at where GE's likely to find itself in 2020. 

How far we've come

GE has already made immense changes to its portfolio in the last 10 years. So much so, in fact, that it's barely recognizable as the same company it was in 2007.

In 2007, GE still owned an 80% stake in NBC Universal (which is now fully owned by Comcast). It had a business selling private-label credit cards for retailers like Wal-Mart and (which it spun off as Synchrony Financial in 2015). And it still made appliances like refrigerators and dishwashers (a business it sold to China's Haier earlier this year). 

These businesses, along with GE's other financial operations, made up about half of the company's revenue in 2007:

Data source: GE 2007 annual report. Chart by author.

Contrast that with the first half of 2016, when the company's biggest revenue generators were its power and aviation businesses. This portfolio of industrial businesses looks a lot more like Honeywell's than like the GE of ten years ago: 

Data source: Company earnings releases. Charts by author.

The only remaining business in GE's portfolio that doesn't fit with its industrial refocus is its famous consumer lighting business. Expect to see that unit sold off by 2020 as well.

The digital industrial company

Even though its consumer financial and appliance arms are a thing of the past, GE will still build complex machinery and sell it to clients large and small. But once those machines are sold, the company often derives additional revenue through profitable service contracts. With its recent acquisition of Alstom, GE has even been able to start servicing the equipment of its competitors, including Siemens

GE is also investing in software, putting time and money into the creation of Predix, its cloud-based operating system that doubles as a software platform for industrial applications. In 2015, the company logged more than $5 billion in revenue from software and software-related products.

CEO Jeff Immelt thinks that may be just a drop in the bucket, though. "The opportunity for industrial companies is to grab this next age of productivity," Immelt said at the 2015 Minds and Machines conference in San Francisco.

GE expects to triple its software revenue to $15 billion by 2020. That would make it one of the top 10 software companies in the world. "It's a very ambitious goal, but with that said, the market opportunity is large as well," GE's Chief Digital Officer Bill Ruh said in an interview. 

Indeed, cloud-based platforms are big business. GE's Predix has joined early adopters Amazon Web Services and Microsoft Azure -- established platforms with approximate revenues of $5 billion to $7 billion each in 2015. Expect services and software revenue to make up a larger and larger portion of GE's overall revenue by 2020.

Giving it back

One of the benefits to owning shares in an industrial giant is its dividend. But GE's ordinary quarterly dividend has been frozen at $0.23 per share for nearly two years. Instead, GE has chosen to return money to shareholders in other ways. 

GE is on track to fulfill its plan to return $26 billion to shareholders in 2016. About $8 billion will come in the form of dividends, while an additional $18 billion will result from share buybacks and repurchases. And with GE's SIFI status -- which was holding up some of these transactions -- now officially rescinded, this will more than make up for the dividend freeze. 

In his 2016 letter to shareholders, Immelt made the further commitment to return $100 billion to them through share repurchases and dividends between 2015 and 2018. That's up from the $90 billion he was promising last year.

Investor takeaway

The GE of the future will look very different than the GE of the past, but even in 2020, it will still look like a solid company. In 2020, investors should be rewarded by a growing quarterly dividend, and several special dividends and share buybacks along the way. More revenue from services and software will help the company maintain its cutting edge.

If Predix fails to catch on, though, GE's prognosis will be drastically different. Smart investors will keep an eye on the growth of the Predix platform to ensure it's meeting its goals...and not losing ground to its competition. Growth (or lack thereof) in the company's services backlog will also be a good indicator of whether GE's digital dreams are translating into rewarding realities for its shareholders.