IoT Business Models

This chapter explores Internet of Things from the perspective of business model research. In order to set a cornerstone for this extensive context, the authors first introduce the origins of the business models and the levels of commonly used abstractions, including examples. Moreover, considering the dynamic character of digital technologies and their far-reaching effect on the business landscape as a whole, the basics of business model innovation are outlined. Having the foundations in place, this chapter further elaborates the impact of digitalization on business models with particular focus on IoT. Examining other integral and inseparable aspects of this topic, such as servitization, changes in competitive environment or shifts in industry structures, the authors continue by discussing the impact of IoT on business model innovation and describing the substantial differences between consumer and industrial IoT. Also, as traditional business model frameworks do not incorporate digital technologies nor take into account how these technologies can be used to generate new business value, a novel business model tool suitable for designing and mapping Internet of Things business model innovations is presented. Finally, the chapter touches upon the cross-boundary nature of data-based solutions and investigates the issue of value creation, delivery and capture in digital ecosystems.