A business model describes, in a model-like and holistic manner, the logical connections and the way in which a company generates value for its customers. A company can operate several business models at the same time. (see also https://en.wikipedia.org/wiki/Business_model)
One proven tool for analysing and shaping business models is the “Business Model Canvas”.
Added value can be understood as a process of increasing the perceived value of the product in the eyes of the consumers/customers. It is known as the value proposition. (Modified from https://en.wikipedia.org/wiki/Added_value)
The tangible dimension of value refers to physical products. The intangible dimension of value refer to qualities that can be valuable to the (end) customer, they can be: durability, ethicality, aesthetic appearance, usability or some other personal need or value. Services, by definition, are intangible (non-material)
A revenue model describes the structure of how a company generates revenue or income. Each customer segment can contain one or more revenue streams.
Use of a product or service is metered, and customers are charged each time they use the service.
The payment is conditional on taking a measurable action or achieving a predetermined performance target’. (Often used in maintenance operations)
A service model is the way that a firm offers intangible value to its customers. Different XaaS concepts describe broad category of service models, which offer customers product delivery and payment options that allow them to purchase access to products as a service. the most common ones are the three general cloud computing models: Software as a Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS). See also https://en.wikipedia.org/wiki/Cloud_computing#Service_models.
Infrastructure as a Service (IaaS) are online services that provide high-level APIs used to dereference various low-level details of underlying network infrastructure like physical computing resources, location, data partitioning, scaling, security, backup etc. (From https://en.wikipedia.org/wiki/Infrastructure_as_a_service)
Software as a service (SaaS /sæs/) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. It is sometimes referred to as "on-demand software". (from https://en.wikipedia.org/wiki/Software_as_a_service)
Platform as a Service (PaaS) or application platform as a Service (aPaaS) or platform base service is a category of cloud computing services that provides a platform allowing customers to develop, run, and manage applications without the complexity of building and maintaining the infrastructure typically associated with developing and launching an app. (from https://en.wikipedia.org/wiki/Platform_as_a_service)
Product as a service covers business models where the manufacturer or brand owner retains the ownership of an asset and offers it to customers as a service. In this business model, the company offering the product has an incentive to optimize the use and life cycle of the asset.
Proprietary software is non-free computer software for which the software's publisher or another person retains intellectual property rights—usually copyright of the source code, but sometimes patent rights. (from https://en.wikipedia.org/wiki/Proprietary_software)
Open-source software (OSS) is a type of computer software whose source code is released under a license in which the copyright holder grants users the rights to study, change, and distribute the software to anyone and for any purpose. Open-source software may be developed in a collaborative public manner. According to scientists who studied it, open-source software is a prominent example of open collaboration. (from https://en.wikipedia.org/wiki/Open-source_software)
In the same way that software can be developed and commercialized using different business models according to the software ownership, digital platforms could be developed and commercialized using different business models according to the infrastructure ownership. Different infrastructure ownerships can be identified in this chapter and also their business models (like renting, pay per use…)
(From https://en.wikipedia.org/wiki/Business_ecosystem - definition by Moore) A business ecosystem is an economic community supported by a foundation of interacting organisations and individuals - the organisms of the business world. The economic community produces goods and services of value to customers, who are themselves members of the ecosystem. The member organisms also include suppliers, lead producers, competitors, and other stakeholders. Over time, they coevolve their capabilities and roles, and tend to align themselves with the directions set by one or more central companies. Those companies holding leadership roles may change over time, but the function of ecosystem leader is valued by the community because it enables members to move toward shared visions to align their investments, and to find mutually supportive roles.
Which are the target groups? Which new markets and users will be connected?
By definition, by bringing together actors from different sides, platforms are defined by their stakeholders. There are core stakeholders (target customers, core suppliers, value chain partners), but it should not be forgotten that there are also actors with an indirect or external interest in the activities in the platform (competitors, existing customers not addressed through the platform). A platform also defines the relationship with and the channels with the different user groups.
The business ecosystem within a digital platform have to attract, involve and interconnect value creators on both the supply and demand sides. The platform enables the interaction (value co-creation) between two main groups: demand side (target clients = value users) and supply side (value producers).
Network effects of platform has two dimensions: direct network effects explain how a platform attracts other value creators to participate whereas indirect network effects arise from attracting other platforms to contribute.
The rise of the transport cost, the need for higher efficiency and productivity, the customer demand for greener product, the higher instability of raw material and energy prices and the shortening of the lead-time production will push for a more critical assessment of the delocalisation strategy towards low cost countries. Service-led personalised products will require a new paradigm for western countries re-industrialisation (Globalisation 2.0), moving back (re-shoring) manufacturing of selected products.
At the core of all potential industrial use case scenarios of platforms are data. When formerly isolated data are shared, suddenly a new set of factors arises, both in terms of new external factors, but also in terms of business/microeconomic implications. Therefore, at the core of every digital platform must be a legally, organizationally and commercially viable concept for data sharing/trading/exchange.
When shaping this model, the following questions must be answered: