Chapter 3: Digital Business Models

This chapter addresses the relationship between digitalisation and business models, shedding light on how digital technologies can foster successful business models. To do this, a clarification needs to be made. In a very roughly way, businesses around the globe can be classified into two types: those born in the digital era and those born before. More specifically, businesses can be classified as traditional or digital. According to Gartner, digital businesses are defined as ‘organizations founded after 1995, whose operating model and capabilities are based on the exploitation of information from the internet age and whose digital technologies are considered a main competence’. Given this definition, many ‘traditional’ companies are closer to being ‘digital’ than they think they are. Accordingly, it is very hard to precisely define whether a business is traditional or digital. A traditional company may have developed digital business models, processes, or activities, as we will see within this chapter.