Business models for the Internet of Things

•We present a business model framework for Internet of Things applications.•The framework consists of building blocks and types of options for each building block.•The relative importance of building blocks and types of options is measured through a survey among practitioners.•The value proposition is considered the most important building block of a business model.

The Internet of Things is the connection – via the internet – of objects from the physical world that are equipped with sensors, actuators and communication technology. This technology is looked at by a large variety of domains, such as manufacturing, healthcare and energy, to facilitate the development of new applications and the improvement of existing applications. To also enable the commercial exploitation of these applications, new types of business models must be developed. Frameworks exist to facilitate the development of business models. These frameworks define the building blocks that a business model address. This paper presents a business model framework specifically for Internet of Things applications. Through a literature survey, interviews and a survey among practitioners, it identifies the building blocks that are relevant in an Internet of Things business model, types of options that can be focused on within these building blocks and the relative importance of these building blocks and types. The framework can be used by developers as a starting point for creating business models for Internet of Things applications.