Business Model Innovation in Internet of Things Ecosystems
Summary
Business model innovation in Internet of Things (IoT) ecosystems entails the systematic redesign of value creation, delivery and capture mechanisms by leveraging interconnected devices, sensors, data analytics and platforms. Traditionally product-centric firms are transitioning towards service-oriented and data-centric models, forging multisided marketplaces that unite device manufacturers, service providers, end users and third-party developers. Key dimensions include the evolution of value propositions from ownership to access and outcomes, the orchestration of partner networks to scale data sharing, and the embedding of advanced analytics or artificial intelligence for real-time decision support. Such innovations enable predictive maintenance in manufacturing, usage-based insurance in mobility, remote patient monitoring in healthcare and demand-response solutions in energy. The global significance lies in the potential to enhance efficiency, sustainability and customer engagement, while challenges remain in interoperability, data governance, cybersecurity and aligning incentives across diverse stakeholders.
Research from Nature Portfolio
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Business Model Innovation in Internet of Things Ecosystems publication trend
The graph below shows the total number of articles in business model innovation in internet of things ecosystems across all publications each year (not limited to Nature Index journals).
Technical terms
Business model innovation: The process of fundamentally changing how an organisation creates, delivers and captures value, often by reconfiguring revenue streams, cost structures and partner networks.
Internet of Things (IoT) ecosystem: A network of interrelated devices, sensors, platforms and stakeholders that generate, exchange and act upon data to enable new services and operations.
Data-driven business model: A value logic centred on collecting, analysing and monetising data flows to support decision-making, personalise offerings and generate novel revenue sources.
Multisided platform: A digital infrastructure that facilitates interactions between two or more distinct user groups, creating value through network effects and shared data.
Value proposition: A clear statement of the benefits and outcomes a firm promises to deliver to its customers, differentiating its offering in a competitive landscape.
References
- Unlocking the value from car data: A taxonomy and archetypes of connected car business models. Electronic Markets (2024).
- The Internet of Everything: Smart things and their impact on business models. Journal of Business Research (2021).
- Mapping hotspots and emerging trends of business model innovation under networking in Internet of Things. EURASIP Journal on Wireless Communications and Networking (2018).
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