Unlocking value from machines: business models and the industrial internet of things

ABSTRACT

In this article, we argue that the Industrial Internet of Things (IIoT) offers new opportunities and harbours threats that companies are not able to address with existing business models. Entrepreneurship and Transaction Cost Theories are used to explore the conditions for designing nonownership business models for the emerging IIoT with its implications for sharing uncertain opportunities and downsides, and for transforming these uncertainties into business opportunities. Nonownership contracts are introduced as the basis for business model design and are proposed as an architecture for the productive sharing of uncertainties in IIoT manufacturing networks. The following three main types of IIoT-enabled business models were identified: (1) Provision of manufacturing assets, maintenance and repair, and their operation, (2) innovative information and analytical services that help manufacturing (e.g. based on artificial intelligence (AI), big data, and analytics), and (3) new services targeted at end users (e.g. offering efficient customisation by integrating end users into the manufacturing and supply chain ecosystem).

KEYWORDS:

• Internet of things
• IIoT
• entrepreneurship theory
• transaction cost theory
• industrial services
• business models
• nonownership
• uncertainty

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Michael Ehret

Michael Ehret is reader in Technology Management at Nottingham Trent University. His research focuses on the interface of marketing and entrepreneurship, nonownership business models, and business incubation. He has published in leading academic journals, including Journal of Marketing, Marketing & Psychology, and Industrial Marketing Management.

Jochen Wirtz

Jochen Wirtz is professor of Marketing at the National University of Singapore. He has published over 200 academic articles, book chapters, and industry reports. His over 10 books include Services Marketing: People, Technology, Strategy (World Scientific, 8^th edition, 2016), Essentials of Services Marketing (Prentice Hall, 3^rd edition, 2017), and Winning in Service Markets: Success Through People, Technology and Strategy (World Scientific, 2017).