On Developing Business Models for Internet of Things-Based Products: Process and Chalenges

Amarolinda Zanela Klein, Fabiana Beal Pacheco, Rodrigo da Rosa Righi


Many companies nowadays are struggling to understand the unprecedented complexity of developing business models for products and services based on the Internet of Things. This article aims at investigating what are the elements to be taken into account in order to create a business model for IoT-based products/services and what are the main challenges faced in this process. To address these questions, we review the literature on the creation of business models for IoT and we analyze data from an action research involving the generation of a business model for an IoT-based product - a smart locker – in a small company. We explore how this process occurred and the challenges faced.


Internet of Things, Business Models, Business Model Canvas, Challenges

Full Text:



Amit, R., & Zott, C. (2001). Value creation in E-business. Strategic Management Journal, v. 22, n. 6-7, pp. 493-520.

Amit, R.; Zott, C. (2012). Creating Value Through Business Model Innovation. Sloan Management Review, v. 53, n. 3, pp. 40–49

Atzori, L., Iera, A., & Morabito, G. (2010). The Internet of Things: A survey. Computer Networks, v. 54, n15, pp. 2787-2805.

Avison, D. E., Lau, F., Myers, M. D., & Nielsen, P. A. (1999). Action research. Communications of the ACM, 42(1), 94-97.

Barrett, M. et al. (2015). Service Innovation in the Digital Age: Key Contributions and Future Directions. MIS Quarterly, v. 39, n. 1, pp. 135-154.

Baskerville, R. L. (1999). Investigating information systems with action research. Communications of the AIS, 2(3es), 4

Borgia, E. (2014). The Internet of Things vision: Key features, applications and open issues. Computer Communications, v. 54, pp. 1-31.

Chan, H. C. Y (2015). Internet of Things Business Models. Journal of Service Science and Management, 8, August, p. 552–568.

Chesbrough, H. (2010). Business Model Innovation: Opportunities and Barriers. Long Range Planning, 43(2-3), 354-363.

Derikx, S., De Reuver, G., & Kroesen, M. (2015). Can privacy concerns for insurance of connected cars be compensated? Electronic Markets, v. 16, n.1, pp. 73-81.

Dijkman, R. M., Sprenkels, B., Peeters, T., & Janssen, A. (2015). Business models for the Internet of Things. International Journal of Information Management, 35(6), 672-678.

Dmitriev, V., Simmons, G., Truong, Y., Palmer, M. and Schneckenberg, D. (2014), An exploration of business model development in the commercialization of technology innovations. R&D Management, 44 (3), 306–321.

Ehret, M., & Wirtz, J. (2016). Unlocking value from machines: business models and the industrial internet of things. Journal of Marketing Management, 1-20

Fleisch, E., Weinberger, M., & Wortmann, F. (2014). Business Models and the Internet of Things. Bosch, Bosch IoT Lab. Gallen: HSG, pp. 1-19.

Gassmann, O., Frankenberger, K., & Csik, M. (2013). The St. Gallen Business Model Navigator. Retrieved from http://www.im.ethz.ch/education/HS13/MIS13/Business_Model_Navigator.pdf

Gerpott, T. J.; May, S. (2016). Integration of Internet of Things components into a firm's offering portfolio – a business development framework. Emerald, v. 18, n. 2, p. 53–63.

Glova, J.; Sabol, T.; Vajda, V. (2014). Business Models for the Internet of Things Environment. Procedia Economics and Finance, 15(14), 1122–1129.

Hoegnelid, P.; Kalling, T. (2015) Internet of Things and Business Models Empirical Illustrations of How the Business Model Concept Helps Us to Understand Strategic Implications of Internet of Things Investments. In IEEE 9th International Conference on Standardization and Innovation in Information Technology.

Keskin, T. and Kennedy, D. (2015). Strategies in smart service systems enabled multi-sided markets: Business models for the internet of things. In System Sciences (HICSS), 2015 48th - IEEE.

Li, Y. et al. (2012) Towards a theoretical framework of strategic decision, supporting capability and information sharing under the context of Internet of Things. Information Technology and Management, 13(4), 205–216.

Ju, J., Kim, M.S.; Ahn, J.H. (2016). Prototyping Business Models for IoT Service. Procedia Computer Science, 91, 882-890.

Khanagha, S., Volberda, H., & Oshri, I. (2014). Business model renewal and ambidexterity: structural alteration and strategy formation process during transition to a Cloud business model. R&D Management, 44(3), 322-340.

Koreshoff, T. L., Robertson, T., & Leong, T. W. (2013, November). Internet of things: a review of literature and products. In Proceedings of the 25th Australian Computer-Human Interaction Conference, 335-344 - ACM.

Leminen, S., Westerlund, M., Rajahonka, M., & Siuruainen, R. (2012). Towards IoT ecosystems and business models. In Andreev, S., & Koucheryavy, Y. (2012). Internet of things, smart spaces, and next generation networking. Heidelberg: Springer Berlin (pp. 15-26).

Li, H., & Xu, Z. Z. (2013). Research on business model of Internet of Things based on MOP. In International Asia Conference on Industrial Engineering and Management Innovation (IEMI2012), 1131-1138.

Mattern, Friedemann, and Christian Floerkemeier. From the Internet of Computers to the Internet of Things. Heidelberg: Springer Berlin, 2010. 242-259.

Leminen, S., Mazhelis, O.; Warma, H.(2015). Internet-of-Things Market, Value Networks, and Business Models. University of Jyväskylä, Department Of Computer Science And Information Systems, Technical Reports TR-39, 13-14.

Niyato, D., Hoang, D. T., Luong, N. C., Wang, P., Kim, D. I., & Han, Z. (2015). Smart Data Pricing Models for Internet-of-Things (IoT): A Bundling Strategy Approach. arXiv preprint arXiv:1512.05075.

Novales, A., Mocker, M., & Simonovich, D. (2016). IT-enriched" digitized" products: building blocks and challenges. In AMCIS 2016 Proceedings – AIS.

Opresnik, D., & Taisch, M. (2015). The value of Big Data in servitization. International Journal of Production Economic, 165, 174-184.

Osterwalder, A., & Pigneur, Y. (2009). Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. New York: John Wiley & Sons.

Perera, C., Liu, C. H., & Jayawardena, S. (2015). The emerging internet of things marketplace from an industrial perspective: A survey. IEEE Transactions on Emerging Topics in Computing, 3(4), 585-598.

Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected products are transforming competition. Harvard Business Review, November 2014, pp. 64-88.

Qin, Qiuli; Yu, Hao. (2015) Research on the Internet of Things Business Model of Telecom Operators Based on the Value Net. Management & Engineering 21, 8-12.

Rong, K., Hu, G., Lin, Y., Shi, Y., & Guo, L. (2015). Understanding business ecosystem using a 6C framework in Internet-of-Things-based sectors. International Journal of Production Economics, 159, 41-55.

Sun, Y., Yan, H., Lu, C., Bie, R., & Thomas, P. (2012). A holistic approach to visualizing business models for the internet of things. Communications in Mobile Computing, 1(1), 1.

Shafer, S. M., Smith, H. J., & Linder, J. C. (2005). The power of business models. Business Horizons, v. 48, n. 3, pp. 199-207.

Tesch, J. F. (2016). Discovering the role of scenario planning as an evaluation methodology for business models in the era of the internet of things (IoT) In Twenty-Fourth European Conference on Information Systems (ECIS) – AIS.

Timmers, P. (1998). Business models for electronic markets. Electronic markets, 8(2), 3-8.

Turber, S., vom Brocke, J., Gassmann, O., & Fleisch, E. (2014). Designing business models in the era of Internet of things. In International Conference on Design Science Research in Information Systems, 17-31 - Springer International Publishing.

Turber, S., & Smiela, C. (2014). A Business Model Type For The Internet Of Things. Proceedings of the European Conference on Information Systems (ECIS) 1–10 - AIS.

Harrison, M., Michahelles, F., & Uckelmann, D. (2011). Architecting the Internet of Things. Springer.

Vandermerwe, S. (1988). Servitization of business: Adding value by adding services. European Management Journal, v. 6, n. 4, pp. 314-324.

Verdouw, C. N.; Beulens, A. J. M.; Van Der Vorst, J. G. A. J. Virtualisation of floricultural supply chains: A review from an internet of things perspective. Computers and Electronics in Agriculture, v. 99, p. 160–175, 2013.

Wan, J. (2016) Research on Core Essential Elements for O2O Business Model with ANP. In WHICEB 2016. Proceedings. Paper 55 – AIS.

Weinberger, M., Bilgeri, D., & Fleisch, E. (2016). IoT business models in an industrial context. at-Automatisierungstechnik, 64(9), 699-706.

Westerlund, M.; Leminen, S.; Rajahonka, M. (2014). Designing Business Models for the Internet of Things. Technology Innovation Management Review, 4(7), 5–14.

Wortmann, F.; Flüchter, K. (2015). Internet of Things: Technology and Value Added. Business and Information Systems Engineering, 57(3), 221-224.

Yoo, Y., Boland Jr, R. J., Lyytinen, K., & Majchrzak, A. (2012). Organizing for innovation in the digitized world. Organization Science, v. 23, n. 5, 1398-1408.

Zhang, Y., & Wen, J. (2016). The IoT electric business model: Using blockchain technology for the internet of things. Peer-to-Peer Networking and Applications, 1-12.

Zott, C., Amit, R. (2010). Business model design: an activity system perspective. Long range planning, v. 43, n. 2-3, pp. 216-226.

Zott, C., Amit, R., Massa, L. (2011). The business model: recent developments and future research. Journal of management, v. 37, n.4, pp. 1019-1042.

DOI: http://dx.doi.org/10.4301/S1807-17752017000300009

Copyright (c) 2018 Journal of Information Systems and Technology Management

Licensed under