This document discusses business models and trends in the Internet of Services. It begins by defining business models and distinguishing them from business plans. It then discusses key business model trends like Infrastructure as a Service and Software as a Service. Several example business models are described for companies like Amazon, OnLive, and iTunes. The document concludes by discussing software tools for designing business models.

1. Business Models in the Internet of Services
Business model methods to strengthen innovations
Nico Weiner
Fraunhofer IAO
Competence Center Electronic Business
15. September 2010
Xinnovations 2010, Berlin
© Fraunhofer IAO, Stuttgart

2. Agenda
 Business Models – Between Business Ideas and Business
Plans
 Business model trends in the »Internet of Services«
 Selected use cases
 Outlook on business model management
© Fraunhofer IAO, IAT Universität Stuttgart
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3. Fraunhofer IAO – Ideas for success
 Found in: IAO – 1981
IAT – 1991
 Head of Institute: Prof. Dr.-Ing. Dr.-Ing. E.h. Dieter Spath
 Financial volume: 28 Mio €, davon 35% im Auftrag der Wirtschaft
 Permanent staff: 400 employees
(Data of the year 2009, inclusive IAT of the University of Stuttgart)
Information and communication
intelligent exploitation of the full IT-potential
successfull implementation of process innovation
intuitive design of systems
© Fraunhofer IAO, IAT Universität Stuttgart
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4. Motivation
»Business models are perhaps the most discussed and least understood
aspect of the web. There is so much talk about how the web changes
traditional business models. But there is little clear-cut evidence of exactly
what this means.« Rappa 2001
New product New industry
e.g. Notebook e.g. Netscape,
innovative Google, eBay
Product
Existing industry New business
e.g. various PC- model
existing vendors e.g. DELL
existing innovative
Business model
Kubicek, Brückner, Businesspläne für IT-basierte Geschäftsideen, 2010
© Fraunhofer IAO, IAT Universität Stuttgart
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5. The Business Model-Stack
Osterwalder, Pigneur, Tucci in comm. of AIS (2005)
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6. Business Models as preliminary stage of Business Plans
Business Model Business Plan
Early identification and brainstorming of
Description of all chances, risks and activities
Objective chances, risks and activities
related to an coming or already existing business
to realize a business idea
Target
Business Developer, Partner Investors (Venture Capitalists, Banks ...)
group
Time Usually a snapshot
Shows changes in time and predicts the market
relation at one point in time
Form of
visual textual
presetation
Granularity Reduced to most important facts Many details
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7. Business Model Concept
• Value Proposition describing • Market segments
• Distribution Channel
• Value Intention • Target Customer
• Groupings of
• Customer Experience Customers and
Customers
• Partner Experience • Customer
Relationship
Value Market • Business Web
Perspective
Approach Interface • Partners and Resellers
External
• Business Relationship
Financial Domain • Competition
•Investors & Investment Streams • Competitors
•Revenue Streams
•Pricing
•Costs
Perspective
Internal
• Business Rules • Use Case Scenarios
• Business Processes • Products & Services
Value
Creation & Products &
• Capabilities • Product Offerings
Capabilities Services
• IT-Resources • Service Offerings
• Human Resources • Complementary
Offerings
© Fraunhofer IAO, IAT Universität Stuttgart
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8. Agenda
 Business Models – Between Business Ideas and Business Plans
 Business model trends in the »Internet of Services«
 Selected use cases
 Outlook on business model management
© Fraunhofer IAO, IAT Universität Stuttgart
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9. Side trip – German IT-Vendors and the »Internet of
Services«
 Current german publications »Geschäftsmodelle
im Internet der Dienste« – Aktueller Stand in
Forschung Praxis and Trends und Entwicklungen
auf dem deutschen IT-Markt
 Addresses vendors, scientists and other interested
parties in the area of internet services
 German version free to download at
www.itbusinessmodels.org (Rubric Publications –
English summaries currently only available as
presentations)
© Fraunhofer IAO, IAT Universität Stuttgart
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10. Infrastructure as a Service
An option for German IT-Providers?
 How do you rate the attractiveness of Infrastructure as a Service-Providers
like Amazon EC2, S3 for the operation of SaaS-solutions?
Replies of German IT-Providers; n=114
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11. Responsiblities and Roles to realize SaaS
 How would you realize the distribution of responsibilities and roles within
a partner-network to offer a SaaS-solution?
 Almost similar results for cooperative outsourcing of »Software-
Customization«, »Software-Integration« and »Training of the customer«
Replies of German IT-Providers; n=114
© Fraunhofer IAO, IAT Universität Stuttgart
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12. Software as a Service
Pricing criteria
 What are the criterions for your pricing?
Replies of German SaaS-Providers; n=89
© Fraunhofer IAO, IAT Universität Stuttgart
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13. Agenda
 Business Models – Between Business Ideas and Business Plans
 Business model trends in the »Internet of Services«
 Selected use cases
 Outlook on business model management
© Fraunhofer IAO, IAT Universität Stuttgart
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14. Excerpt of the Amazon business model
Market Value Approach
Products & Services
Interface
Anwendungen Corporate Accounts (Unternehmensrabatte)
Unternehmens- Value Creation &
und Dienstleist- kunden (Käufer) Ausbildungsmaterial für Schulen zu speziellen Konditionen Capabilites
ungen Amazon Visa Karte
AmazonPrime-Mitgliedschaft (kostenloser Financial Domain
Express/Premiumversand) Kindle & eBooks
Privatpersonen IMDb (Filmdatenbank)
(Käufer) Soziales Netzwerk: Author Fresh
Multimediainhalte (verderbliche
Empfehlungen, Kommentare, (MP3, Video on
Wunschliste, die persönliche Produkte)
Demand)
Seite, Foren
Amazon Produkte &
Author Blogs
Privatpersonen AuthorsCentral/Connect Dienste (z.B.
(Verkäufer) Fotobücher)
AmazonAdvantage
(Selbstverlag)
Fulfillment by Amazon Amazon WebStore
(Auftragsbearbeitung inkl. (angepasster Webshop mit
Lagerung und Versand) eigenem Branding)
Unternehmens- Amazon Cloud Front (Bereitstellung von
Plattform-Dienste kunden Inhalten, z.B. Medieninhalten)
(Verkäufer) & Amazon FWS, FPS, DevPay (Dienste
Entwickler zur Abwicklung und Abrechnung) Amazon SimpleDB, SQS, SNS,
Amazon Elastic Compute CloudWatch (Bereitstellung von
Infrastruktur- Cloud (Rechenleistung) technischen Diensten)
Dienste
Amazon S3 (Speicherung von Inhalten)
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15. OnLive - revolution in entertainment?
Playing modern games
restricted by almost no
hardware-requirements Target customers Telecommunication-
providers /
Using the service Infrastructure-providers
everywhere (?) Publishers
Hardware-providers
"Free the user" of storage
and performance Value Market
Approach Interface Competitors (?)
Financial Domain
fixed one-time + monthly fee
High bandwidth
(5Mbit) Value
MicroConsole adapter
Creation & Products &
Multiple server-farms Capabilities Services
in many locations (~600 Game Service
km to customer)
High server- Game Management (online-
performance profiles and storage)
requirements
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16. The business model of the iTunes-offering
Hardwaredesign
Software developers Target Customers
High End Products
Content-providers - Payment-providers -
Image & Lifestyle
Music Labels Click&Buy
AllInOne-Funcationality
(apps, movies, pictures, Value Market Hardware-providers
music, contacts ...) Approach Interface
"Green" Products Competition in different areas - microsoft,
amazon, maxdome
Financial Domain
Content
Server infrastructure Value iTunes-Software
Creation & Products &
Software-Engineering Capabilities Services "iTunes-aware" Hardware -
iPod, iPhone, iPad, AppleTV
Hardwaredesign
Integration of Hard- and Apps- and 3rd-Party Apps
Marketing and PR
Software
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17. Agenda
 Business Models – Between Business Ideas and Business Plans
 Business model trends in the »Internet of Services«
 Selected use cases
 Outlook on business model management
© Fraunhofer IAO, IAT Universität Stuttgart
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18. [moby:designer]
Software-supported Business Model Design
© Fraunhofer IAO, IAT Universität Stuttgart
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19. Thanks for your time!
Nico Weiner
Dipl.-Wirt-Inf.
Competence Center Electronic Business
Fraunhofer Institute of industrial engineering IAO
Nobelstrasse 12 | 70569 Stuttgart, Germany
Phone: +49 711 970-2170
nico.weiner@iao.fraunhofer.de
Download of publications and presentations at
www.itbusinessmodels.org/?q=content/publications. (partially german)
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