Business Models for the Internet of Things

Abstract

The emerging Internet of Things provides a networked infrastructure that enables incremental business transformation as well as radical business changes. So far, the full potential of possible business opportunities has not been leveraged. Within this chapter we propose the concept of business models and business model innovation as a means to align “technological development and economic value creation” (Chesbrough and Rosenbloom, 2002) in the Internet of Things. A central point of this paper is the value and revenue creation in the Internet of Things. We consider information to be the main source for value proposition. To investigate resulting impacts, we draw on the “laws of information” proposed by Moore and Walsh (2002) and deduct specifics for the Internet of Things. Building on this, we describe four exemplary business model scenarios. These are visualised using the business model framework by Osterwalder and Pigneur (2009). This framework, the fundamental rules of value creation through information in the Internet of Things and the provided examples may serve as a tool-set for practitioners to analyse and change their business models when implementing the Internet of Things.