The future of the Internet of Things: toward heterarchical ecosystems and service business models

Seppo Leminen*, Mervi Rajahonka, Mika Westerlund, Robert Wendelin

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

35 Citations (Scopus)


Purpose: This study aims to understand their emergence and types of business models in the Internet of Things (IoT) ecosystems. Design/methodology/approach: The paper builds upon a systematic literature review of IoT ecosystems and business models to construct a conceptual framework on IoT business models, and uses qualitative research methods to analyze seven industry cases. Findings: The study identifies four types of IoT business models: value chain efficiency, industry collaboration, horizontal market and platform. Moreover, it discusses three evolutionary paths of new business model emergence: opening up the ecosystem for industry collaboration, replicating the solution in multiple services and return to closed ecosystem as technology matures. Research limitations/implications: Identifying business models in rapidly evolving fields such as the IoT based on a small number of case studies may result in biased findings compared to large-scale surveys and globally distributed samples. However, it provides more thorough interpretations. Practical implications: The study provides a framework for analyzing the types and emergence of IoT business models, and forwards the concept of “value design” as an ecosystem business model. Originality/value: This paper identifies four archetypical IoT business models based on a novel framework that is independent of any specific industry, and argues that IoT business models follow an evolutionary path from closed to open, and reversely to closed ecosystems, and the value created in the networks of organizations and things will be shareable value rather than exchange value.

Original languageEnglish
Pages (from-to)749-767
Number of pages19
JournalJournal of Business and Industrial Marketing
Issue number6
Publication statusPublished - 2 Jul 2018
MoE publication typeA1 Journal article-refereed


  • Business models
  • Ecosystems
  • Framework
  • Heterarchy
  • Internet of Things
  • Service


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