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Patterns of business model innovation for advancing IoT platforms

Lino Markfort (Chair of Innovation Management and Innovation Economics, Faculty of Social Sciences and Philosophy, University of Leipzig, Leipzig, Germany)
Alexander Arzt (Fraunhofer-Zentrum für Internationales Management und Wissensökonomie IMW, Leipzig, Germany)
Philipp Kögler (Fraunhofer-Zentrum für Internationales Management und Wissensökonomie IMW, Leipzig, Germany)
Sven Jung (University of St Gallen, St Gallen, Switzerland)
Heiko Gebauer (Fraunhofer-Zentrum für Internationales Management und Wissensökonomie IMW, Leipzig, Germany) (Linköping University, Linköping, Sweden) (University of St Gallen, St Gallen, Switzerland)
Sebastian Haugk (Fraunhofer-Zentrum für Internationales Management und Wissensökonomie IMW, Leipzig, Germany)
Christian Leyh (Fraunhofer-Zentrum für Internationales Management und Wissensökonomie IMW, Leipzig, Germany)
Felix Wortmann (University of St Gallen, St Gallen, Switzerland)

Journal of Service Management

ISSN: 1757-5818

Article publication date: 17 December 2021

Issue publication date: 3 January 2022

1341

Abstract

Purpose

The emergence of Internet of Things (IoT) platforms in product companies opens up new data-driven business opportunities. This paper looks at the emergence of these IoT platforms from a business-model perspective.

Design/methodology/approach

The study applies a mixed method with two research studies: Study I–a cluster analysis based on a quantitative survey, and Study II–case studies based on qualitative interviews.

Findings

The findings reveal that there is no gradual shift in a company's business model, but in fact three distinct and sequential patterns of business model innovations: (1) platform skimming, (2) platform revenue generation and (3) platform orchestration.

Research limitations/implications

The results are subject to the typical limitations of both quantitative and qualitative studies.

Practical implications

The results provide guidance to managers on how to modify the components of the business model (value proposition, value creation and/or delivery and profit equation) in order to enable platforms to advance.

Social implications

As IoT platforms continue to advance, product companies achieve better performance in terms of productivity and profitability, and more easily secure competitive advantages and jobs.

Originality/value

The paper makes three original contributions: (1) it is the first quantitative study on IoT platforms in product companies, (2) identifies three patterns of business model innovations and (3) offers a first process perspective for understanding the sequence of these patterns as IoT platforms advance.

Keywords

Acknowledgements

This paper forms part of a special section “The Future of Servitization in a Digital Era (Part 2)”, guest edited by Christian Kowalkowski, Tim Baines and Ali Ziaee Bigdeli.

Citation

Markfort, L., Arzt, A., Kögler, P., Jung, S., Gebauer, H., Haugk, S., Leyh, C. and Wortmann, F. (2022), "Patterns of business model innovation for advancing IoT platforms", Journal of Service Management, Vol. 33 No. 1, pp. 70-96. https://doi.org/10.1108/JOSM-11-2020-0429

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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