[White paper] How the IoT will impact business models

There are many papers, articles, and posts (including here, on this blog) on business model innovation and the Internet of Things (IoT). They share a common consensus that the IoT will enable companies to create new business models.

But what is the basis for these new business models? How will the IoT provide us with these many business opportunities?


We at the Bosch IoT Lab at the University of St. Gallen think that the IoT will impact business in at least two ways.

First, it enables connected things to include new IT-based services that enhance the original function of the object in question.

For example, a light bulb with inbuilt presence sensor that is connected to the internet can act as a security device within a smart home. A watch that features a speaker, microphone, and GSM module can be used as an emergency call device. It all boils down to the following equation:


Source: Bosch IoT Lab, 2014

Second, by introducing connected sensors to the physical world, the IoT bridges the gap between the physical and digital worlds.

Information about the physical world that was far from straightforward to collect in the past can now be retrieved at zero marginal cost. By way of example: Stock taking is usually done only once a year, which leaves managers with some degree of uncertainty about the actual quantities of raw materials available. IoT technology enables automated stock taking to take place every second, which, according to the well-known saying that “we can only manage what we can measure”, helps make management more effective. The measurement capabilities the IoT affords will allow companies to manage in a totally new way.

Where does this all lead? How can we build on these initial effects?

Please refer to our new Bosch IoT Lab white paper to learn more (no registration required). We look forward to receiving your feedback!

White paper download


Still got questions? Take a few minutes to find out more by watching our latest video clip on business models and the Internet of Things.



About the author

Markus Weinberger

Markus Weinberger

I am Professor for "Internet of Things" at Aalen University. Before I have been Director of the Bosch Internet of Things & Services Lab at the University of St. Gallen. During the almost 15 years at Bosch I gained experience in such different fields as driver assistance systems, internal auditing and engineering services. I had the opportunity to work in areas like ergonomics, calibration of electronic control units, project management, process management and Enterprise 2.0. I hold a Ph.D. in Engineering from the Technische Universität München. I studied mechanical engineering in Munich and Trondheim, Norway.