Product Performance Based Business Models: A Service Based Perspective

The migration to a service based economy has led many firms to emphasize the service component of their product offerings. This shift has led to the emergence of a business model based on value creation through product utilization, where products are sold as a service, (often referred to as "Servicization" or product-service systems) The Servicization business model can be applied to both tangible and intangible, information intensive, products and is based on aligning customer and supplier incentives.A shift to a service based model leads to a variety of managerial questions that concern performance metrics, customer supplier relationships and contracting and resource optimization. The paper will review how current research on Servicization relates to these questions. We will also consider the implications of the Servicization paradigm for areas in information management such as cloud computing and decision support systems.