Designing Business Models for the Internet of Things
Westerlund, Mika; Leminen, Seppo; Rajahonka, Mervi (2014)
Westerlund, Mika
Leminen, Seppo
Rajahonka, Mervi
Talent First Network (Carleton University)
2014
CC BY 3.0
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-201803093183
https://urn.fi/URN:NBN:fi:amk-201803093183
Tiivistelmä
This article investigates challenges pertaining to business model design in the emerging
context of the Internet of Things (IOT). The evolution of business perspectives to the IOT is
driven by two underlying trends: i) the change of focus from viewing the IOT primarily as a
technology platform to viewing it as a business ecosystem; and ii) the shift from focusing on
the business model of a firm to designing ecosystem business models. An ecosystem busi-
ness model is a business model composed of value pillars anchored in ecosystems and fo-
cuses on both the firm's method of creating and capturing value as well as any part of the
ecosystem's method of creating and capturing value. The article highlights three major chal-
lenges of designing ecosystem business models for the IOT, including the diversity of ob-
jects, the immaturity of innovation, and the unstructured ecosystems. Diversity refers to the
difficulty of designing business models for the IOT due to a multitude of different types of
connected objects combined with only modest standardization of interfaces. Immaturity
suggests that quintessential IOT technologies and innovations are not yet products and ser-
vices but a "mess that runs deep". The unstructured ecosystems mean that it is too early to
tell who the participants will be and which roles they will have in the evolving ecosystems.
The study argues that managers can overcome these challenges by using a business model
design tool that takes into account the ecosystemic nature of the IOT. The study concludes
by proposing the grounds for a new design tool for ecosystem business models and suggest-
ing that "value design" might be a more appropriate term when talking about business
models in ecosystems.
context of the Internet of Things (IOT). The evolution of business perspectives to the IOT is
driven by two underlying trends: i) the change of focus from viewing the IOT primarily as a
technology platform to viewing it as a business ecosystem; and ii) the shift from focusing on
the business model of a firm to designing ecosystem business models. An ecosystem busi-
ness model is a business model composed of value pillars anchored in ecosystems and fo-
cuses on both the firm's method of creating and capturing value as well as any part of the
ecosystem's method of creating and capturing value. The article highlights three major chal-
lenges of designing ecosystem business models for the IOT, including the diversity of ob-
jects, the immaturity of innovation, and the unstructured ecosystems. Diversity refers to the
difficulty of designing business models for the IOT due to a multitude of different types of
connected objects combined with only modest standardization of interfaces. Immaturity
suggests that quintessential IOT technologies and innovations are not yet products and ser-
vices but a "mess that runs deep". The unstructured ecosystems mean that it is too early to
tell who the participants will be and which roles they will have in the evolving ecosystems.
The study argues that managers can overcome these challenges by using a business model
design tool that takes into account the ecosystemic nature of the IOT. The study concludes
by proposing the grounds for a new design tool for ecosystem business models and suggest-
ing that "value design" might be a more appropriate term when talking about business
models in ecosystems.