Perceived Risks and Benefits of Advanced Pay-Per-Use Type of Business Models Based on Industry 4.0 Enabled Technologies in Manufacturing Companies

  • Mikko UuskoskiEmail author
  • Karan Menon
  • Hannu Kärkkäinen
  • Kari Koskinen
Conference paper
Part of the IFIP Advances in Information and Communication Technology book series (IFIPAICT, volume 540)


There is a growing interest in the pay-per-outcome business models in manufacturing industries because of novel technologies provided by Industry 4.0 implementations. These business models for the software companies cannot be directly applied for manufacturing companies because of the scalability issues as well as complexity issues. The purpose of this paper is to identify perceived benefits and risks of Industry 4.0 enabled pay-per-outcome models for manufacturing companies (machine builders). We conducted qualitative interviews of machine building companies. We identified and selected companies that have been experimenting with novel Industry 4.0 enabled pay-per-outcome business models. We were able to create understanding the perceived benefits and risks of these advanced industry 4.0 enabled PPU/PPO type business models for machine builders. Since there is a limited amount of practical implications especially in case of investment heavy machine builders thus there is little understanding about related benefits and risks of implementing these novel Industry 4.0 enabled pay-per-outcome business models. This study can facilitate decision making of managers about implementing these novel business models by taking into account the expected benefits as well as bottlenecks encountered.


Industry 4.0 Industrial internet of things Business models Pay per use Pay per outcome 


  1. 1.
    Ostrom, A.L., et al.: Moving forward and making a difference: research priorities for the science of service. J. Serv. Res. 13(1), 4–36 (2010)CrossRefGoogle Scholar
  2. 2.
    Gebauer, H., Saul, C.J., Haldimann, M., Gustafsson, A.: Organizational capabilities for pay-per-use services in product-oriented companies. Int. J. Prod. Econ. 192, 157–168 (2016)CrossRefGoogle Scholar
  3. 3.
    Gebauer, H., Joncourt, S., Saul, C.: Services in product-oriented companies: past, present, and future [Servicios en empresas orientadas a productos: Pasado, presente y future]. Univ. Bus. Rev. 2016(49), 32–53 (2016)Google Scholar
  4. 4.
    Vaquero, L.M., Rodero-Merino, L., Caceres, J., Lindner, M.: A break in the clouds. ACM SIGCOMM Comput. Commun. Rev. 39(1), 50 (2008)CrossRefGoogle Scholar
  5. 5.
    Fishburn, P.C., Odlyzko, A.M.: Competitive pricing of information goods: subscription pricing versus pay-per-use. Econ. Theory 13(2), 447–470 (1999)MathSciNetCrossRefGoogle Scholar
  6. 6.
    Hermann, M., Pentek, T., Otto, B.: Design principles for industrie 4.0 scenarios. In: 2016 49th Hawaii International Conference on System Sciences (HICSS), pp. 3928–3937 (2016)Google Scholar
  7. 7.
    Lee, I., Lee, K.: The internet of things (IoT): applications, investments, and challenges for enterprises. Bus. Horiz. 58(4), 431–440 (2015)CrossRefGoogle Scholar
  8. 8.
    Evans, P.C., Annunziata, M.: Industrial internet: pushing the boundaries of minds and machines. General Electric (2012)Google Scholar
  9. 9.
    Iansiti, M., Lakhani, K.R.: Digital ubiquity. How connections, sensors, and data are revolutionizing business. Harv. Bus. Rev. 92(11), 90–99 (2014)Google Scholar
  10. 10.
    Heppelmann, J., Porter, M.E., Heppelmann, J.E.: How smart, connected products are transforming competition. Harv. Bus. Rev. 92(11), 64–88 (2014)Google Scholar
  11. 11.
    Gebauer, H., Saul, C.J., Haldimann, M., Gustafsson, A.: Organizational capabilities for pay-per-use services in product-oriented companies. Int. J. Prod. Econ. (2015)Google Scholar
  12. 12.
    Arnold, C., Kiel, D., Voigt, K.-I.: How the industrial internet of things changes business models in different manufacturing industries. Int. J. Innov. Manag. 20(8), 1640015 (2016)CrossRefGoogle Scholar
  13. 13.
    Laudien, S.M., Daxböck, B.: The influence of the industrial internet of things on business model design: a qualitative-empirical analysis. Int. J. Innov. Manag. 20(8), 1640014 (2016)CrossRefGoogle Scholar
  14. 14.
    Ehret, M., Wirtz, J.: Unlocking value from machines: business models and the industrial internet of things. J. Mark. Manag. 33(1–2), 111–130 (2017)CrossRefGoogle Scholar
  15. 15.
    Gierej, S.: Techniques for designing value propositions applicable to the concept of outcome-economy. Eng. Manag. Prod. Serv. 9(1), 56 (2017)Google Scholar
  16. 16.
    Copani, G., Marvulli, S., Tosatti, L.M.: An innovative pattern to design new business models in the machine tool industry. In: Azevedo, A. (ed.) BASYS 2008. ITIFIP, vol. 266, pp. 317–324. Springer, Boston, MA (2008). Scholar
  17. 17.
    Kagermann, H.: Change through digitization—value creation in the age of industry 4.0. In: Albach, H., Meffert, H., Pinkwart, A., Reichwald, R. (eds.) Management of Permanent Change, pp. 23–45. Springer, Wiesbaden (2015). Scholar
  18. 18.
    Menon, K., Kärkkäinen, H., Lasrado, L.: Towards a maturity modeling approach for the implementation of industrial internet. In: PACIS 2016 Proceedings (2016)Google Scholar

Copyright information

© IFIP International Federation for Information Processing 2018

Authors and Affiliations

  1. 1.Tampere University of TechnologyTampereFinland

Personalised recommendations