Designing a Subscription Business Model for Industrial Goods: Distinctive Features and Industrial Subscription Ecosystems

Industry 4.0 is changing business models and their ecosystems. While a few pioneers have started implementing subscription business models for industrial goods, a growing number of companies are observing these pilot projects and still contemplating whether to offer subscription business models. First movers’ business models are so complex and multilayered, though, that they cannot be transferred to other companies one-to-one. The literature largely describes subscription business models so generally that any distinctions between them are glossed over. Little is known about these distinctions’ impact on the capabilities a company needs to develop and implement its very own subscription business model. In this study, we crossanalyze six in-depth case studies from different industries and add additional information from ten in-depth interviews with experts. The relational view serves as the guiding theory. We define three distinctive features that typify industrial subscription business models: terms of the offer, output co-creation and billing logic. We show how these features help establish capabilities to collaborate with partners in an industrial subscription ecosystem. This article is intended to help practitioners and researchers design specific subscription models, define the requisite capabilities and to create an industrial subscription ecosystem with the assistance of potential partners.