Product versus Service Business – Service Economies and the Internet

A paper by my SAP colleague Andreas F. promotes the research discipline „Service Science“. His (well-known) point is that modern economies turn into service economies by market forces. So what distinguishes „services“ from „products“ and what are explicit/implicit features of „service economies“. But this what „Service Science“ is all about, right?

An interesting and valid observation especially exemplified in the telecom and software industry. Just watch the statement of NSN in an earlier blog post. It claims that „50% of NSNs business is operating networks“ (network-as-a-service). The same applies to Ericsson, Huawei, Alcatel-Lucent, and others with only the actual ratio different.

The question to therefore not whether „servicefication“ is a valid observation but rather a.) „What is the right strategy for the sector and b.) which role the Internet may hold (technology and business).

SAP Research has a long track record in investigating these questions under the umbrella-term „Internet-of-Services“. Essentially the idea is to extend the current Internet into a „Global Service Delivery Framework“ that supports „service-based economies“ that then turn into „web-based service economies“. This is a bold statement and no economy will turn fully web-based, definitively. But the broader concept is valid. Personally I favor the term „Internet Business Platform“, mostly since „Service Delivery Platform“ is associated with a long-lasting concept in the telco domain.

For more about SAP Research „Internet-of-Services“ check the IoS-Portal.

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