IoT Value Proposition 2018-06-07T09:16:21+00:00

Hybrid Value Proposition


At a very abstract level, the value proposition of an Internet of Things solution can be reduced to a simple formula: Overall value proposition = value obtained from the physical thing + value obtained from digital services (Fleisch et al. 2015; Leimeister and Glauner 2008). A classical non-connected product is upgraded with connectivity and IT. The value of this enrichment is experienced as benefits from the physical product and the digital services associated with it. That process results in a whole that is more than the sum of its parts, building on the original product – in particular due to the simple ability at relatively low cost to combine it with proprietary and external digital services. The connected light bulb, is still a light bulb, even if it includes a motion sensor and is remotely accessible via its own app. The physical and local usefulness remains – providing light. Beyond that, it also allows for a variety of new digital services enabled through sensor and actuator technology. Examples include motion detection, alerts in case of intrusion or presence simulations (Comfylight 2016). The potential of such a hybrid value proposition combined with a growing number of connected objects convince more and more companies to recognize the IoT as a game changer within their industries.


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Dominik Bilgeri
Dominik BilgeriPh.D. candidate and doctoral researcher
Ass. Prof. Dr. Felix Wortmann
Ass. Prof. Dr. Felix WortmannScientific Director Bosch IoT Lab
Timo Gessmann
Timo GessmannDirector Bosch IoT Lab