Industrial Internet of Things; How technology providers capture a competitive edge by analyzing the Business Model Environment

Abstract

Technological development and innovations have over centuries triggered Industrial Revolutions that have transformed industries. Our society, and not at least the manufacturing sector, is facing a progressive digitalization known as the Industrial Internet of Things (IIoT), which is prospered to transform the industry and disrupt legacy business models. The technological impact of this change has proved to bring impressive improvements in quality, efficiency, and flexibility. However, the business perspective of this change lack attention and research of tomorrow’s business models is required. The purpose of this explorative research is therefore to analyze how the development of IIoT affects providers´ business models within the manufacturing sector, excluding elements of technological investigations. The research is based the Business Model Environment framework, which initially investigates what external forces that affect the development of IIoT, followed by analyzing the transformation of providers’ business models. The novelty of the chosen area claimed a qualitative approach comprising interviews with providers of IIoT solutions and experts of the field. Findings show that data security will play an increasingly important role in future, together with the establishment of technological standards. In addition, the IIoT market is growing in both size and speed of development, making the Legal aspect, Switching Costs, and Market Attractiveness the most influential externalities. Providers’ business models will undergo extensive transformation within the nearest future. IIoT technologies enable new customized solutions, which transform both the Value Proposition and Customer Relationship. These elements will also imply changes in the Revenue Streams, as new payment models are required for sustained competitiveness. The intensified competition makes alliances favorable, and Key Partnership is prospered to be increasingly important in future. The providers of IIoT technologies will face tremendous changes in nearest future, and IIoT will bring advantages for all parties in the value chain.