The Internet of Things in a Business Context: Implications with Respect to Value Creation, Value Drivers, and Value Capturing

The Internet of Things (IoT) is a network that connects devices and everyday objects to exchange data. IoT solutions consist of two elements, namely, the “thing” itself and its digital addition. Thus, these solutions deliver value based on a physical “thing”-based function and on a digital, connected IT-based function. Due to this hybrid nature of the IoT construct, firms have to rethink how to create and capture value. However, we still know very little about the influence of the IoT on value creation, value drivers, and value capturing in a business context. We conceptually analyzed the potential impacts of the IoT on value creation, value drivers, and value capturing. With regard to value creation, we suggest that the characteristics of IoT solutions (the independence of the information stream and its accessibility) result in new possible ways of creating value and in specific drivers of value creation in IoT environments, namely, efficiency, network effects; customization, servitization and value co-creation, shared value drivers, and novelty. With regard to value capturing, we suggest that the hybrid value construct enables the value stream of digital information to be independently marketed, thereby allowing for completely new ways of capturing value in the IoT context.