Takeaways!

You will be able to understand the Digital Business Model, its importance,
types, and characteristics. In addition, you will also be able to identify and analyze the
DBM of a company.
Digital Business Model

• The term business model is probably one of the most abused, misused and
misunderstood terms in the recent history
• It has been used to refer to anything ranging to simple canvases with a few catchy
bullets to stuffy, corporate-speak laden business plans that take an afternoon to
read and might be summed up with “build website, get people, sell ads, sell out!”.
• Things get even more ambiguous once we start looking at digital business models,
since most available content and information pertains to SaaS (software-as-a-
service) or e-Commerce. Even worse, digital business models are at times
conflated with digital product or service creation, ignoring fundamental
components such as revenue generation models or value proposition models.
A digital business model is a framework for creating,
distributing and capturing value through digital
technologies.
Digital Business Model
• Digital Business Model is primarily a framework we
can tweak and adapt in order to build a
sustainable, scalable and ultimately profitable
online business:
• We can look at digital business models as a:
• Framework for building, growing or transforming
your business using digital technologies.
• Framework on which you can create, deliver &
capture value in digital environments.
• Framework you can adapt & refine in search of
a sustainable & scalable revenue generating
model.
 Why is a Digital Business Model Important?

THEY PROVIDE A COHERENT THEY REDUCE THE RISK OF THEY REDUCE THE RISK OF THEY’RE AN AMAZING TOOL THEY HELP KEEP BUSINESSES
VISION ON VALUE CREATION, RUNNING OUT OF CASH IN PRODUCT-MARKET FOR RAMPING UP ON TRACK.
DISTRIBUTION & CAPTURE. EARLY STAGES. MISALIGNMENT. INNOVATION.
Platform Type Common Examples
Google Workspace, Dropbox, Salesforce,
SaaS
Cisco WebEx, Concur, GoToMeeting
Windows Azure, Force.com, Google App
PaaS
Engine, Apache Stratos, OpenShift

Platform as a service (PaaS) or application platform as a service (aPaaS) or platform-based service

is a category of cloud computing services that allows customers to provision, instantiate, run, and
manage a modular bundle comprising a computing platform and one or more applications,
without the complexity of building and maintaining the infrastructure typically associated with
developing and launching the application(s); and to allow developers to create, develop, and
package such software bundles.

Software as a service (SaaS) is a software licensing and delivery model in which software is
licensed on a subscription basis and is centrally hosted. SaaS is also known as "on-demand
software" and Web-based/Web-hosted software. SaaS is considered to be part of cloud
computing, along with infrastructure as a service (IaaS), platform as a service (PaaS)

Infrastructure as a service (IaaS) is a form of cloud computing that provides virtualized computing
resources over the internet. IaaS is one of the three main categories of cloud computing services,
alongside software as a service (SaaS) and platform as a service (PaaS).
Examples: Amazon web services, Google computing engine(GCE), Microsoft Azure
Source: www.garyfox.co/digital-business-models/
Nine Disruptive Digital Business Model

Freemium

Free
Subscription
Offerings

User
Marketplace experience
Digital premium

Business
Models

Sharing Hidden
Economy Revenue

On-demand Ecosystem
 It describes a pattern for business models in which part of the product is accessible for free. As a rule,
these are basic functions
Freemium Digital Business Models

Either only basic functions are offered and for premium functions, no branding or extension of the
services, the customer must then pay.

This model is especially applicable for products or services that have low marginal costs (additional costs
per additional customer) or where marketing and customer information has a higher value than the
operating costs

Typical examples: Spotify, LinkedIn, Canva.com, Hotstar etc

1. Subscription Digital Business Models

• Products and services can usually also be offered as subscriptions

• The advantage of a subscription is that customers get used to the service and are
reluctant to give it up if they get a lot of added value from it
• The customer pays a constant amount to the seller of the product or service on a
regular basis (e.g. monthly). In recent years, many new digital business models based
on the subscription model have emerged – and changed entire industries in the
process
• Prominent examples here are Spotify (music) and Netflix (video). Amazon is
represented in several categories at once: music, videos, audio books, and eBooks.
Increasingly more software solutions are also being offered as subscriptions
 • This model offers free
offerings of certain products
to the customers
2. Free Offerings Digital • This model usually evaluates
customer data for
Business Models advertising or personalized
offers
• Typical examples: Google,
Facebook
3. User Experience Premium Digital Business Models

• It is a model that offers user experience to the customers. This experience from loyal
customers will be improved and the premium will be charged in the later stages
• Typical examples: Apple and Premium-Brands
 In this business model, it provides a digital marketplace to
connect with buyer and seller on a common platform.

4. Marketplace Money is usually generated via brokerage fees, commissions, or

fixed transaction costs.
Digital
Business However, it is also possible to use membership fees on the
platform or to generate money through advertising/premium
Models positioning services.

Typical examples: Amazon, Alibaba, Uber, eBay

 • The sharing economy is referred to as
letting. Goods or services can only be
purchased or made available to another
person for a limited period of time
5. Sharing • The car is made available for a certain
period of time and a number of km for
Economy Digital another person against the payment
Business Models • In general, this can be applied to all
products, whether from private
individuals or companies, real estate, or
intangible assets.
• Typical example: Airbnb
6. On • Time is money, that is the structure of this
business model
Demand • The immediate access is sold or also the
Digital premium access to “time”
Business • The delivery, the product, or the service can
be called up at a certain point in time
Models • Video-on-demand, taxi (over) on-demand,
and many other systems are good examples.
• Typical examples: Amazon Prime, Uber,
Cloud Services
7. Digital Ecosystem Business Models

• Digital ecosystems are currently one of the most complex yet robust digital
business structures.
• This business model binds customers to an ecosystem.
• For example, if you have a mobile phone from Apple or with Android, you
are probably included in this ecosystem.
• You buy the hardware and use software that may only be compatible with
the same system. This makes the change difficult and also prevents new
competition from gaining a foothold
• PayPal is an excellent example of a modular supplier. It allows for
frictionless payment across various digital business models and
ecosystems.
• Typical examples: Apple, Google
• It is not only the direct transactions with customers that
bring in revenue
• Even if you are the operator of a service or platform that
is free of charge for the end customer, income can be 8.Hidden
generated
• This is done by generating income streams based on user Revenue
data
• This highly relevant targeting option is worth a large
Business
budget to advertisers as can clearly be seen in the sales
figures of Facebook and Google. Spotify also uses the ad Models
model to finance its free memberships.
• Another way to monetize user data is the affiliate model.
Here, the advertising or mediating platform receives a
commission when customers buy the product.
A peer-to-peer (P2P) service is a decentralized platform whereby two individuals interact directly with
each other, without intermediation by a third party. Instead, the buyer and the seller transact directly
with each other via the P2P service. Example: Azureus(Vuze), DC++
Cloudflight(2022):https://www.cloudflight.io/en/blog/7-patterns-of-digital-business-models/
Case Analysis on Uber
e-Bay Case study Analysis
e-Bay- Business Model
Analysis- Strategic Orientation of e-Bay
Case Analysis- Google’s Business Model
Source: Wirtz (2010, 2018)
Source: Wirtz (2010, 2018)