Is Openness Really Free? A Critical Analysis of Switching Costs for Industrial Internet Platforms
The core idea of Industrial Internet, Industry 4.0, Smart Manufacturing and Cyber Physical Systems (CPS) is to utilize Internet of Things (IoT) based technologies and applications for the purpose of enhanced operations productivity. These IoT technologies and applications help companies to integrate their business as well as their engineering, manufacturing and service processes making their operations more robust, efficient and sustainable (green) with supreme quality. Switching cost and openness of the industrial internet (II) platform has many short and long-term impacts on the end-users’ business. Hence the openness is often considered to be free or synonymous to open source. The purpose of this paper is to understand and analyze the impact of II-platform’s increased openness and its dimensions on switching costs framework. For empirics and to test the developed framework we conducted a training and a workshop, where 11 manufacturing and service industry representatives describe the main types of switching costs that would be impacted because of increased openness of II-platforms. As a managerial implication this new switching cost framework seem to provide a tool to evaluate the specific preferences and potential positive and negative impacts of II openness on their respective businesses.
KeywordsIndustry 4.0 Industrial internet Smart Manufacturing Platforms Openness Switching costs Lock-in IIoT IoT
This work was part of funding received by Wihuri Foundation (Grant Number: 00170247) & Välkky Project-Project Number-720118 We would like to thank our Master of Science researcher Pilar Aldama Marin for her contribution towards the study.
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