Background and purpose: Digital technologies are enabling the transformation of manufacturing companies from being a product provider to a service provider, a trend that is referred to as ‘digital servitization’. Providers typically adopt a digital servitization strategy to differentiate themselves from competitors, create new revenue streams, and unlock new value creation opportunities for their industrial customers. Though, for realizing the benefits of digital servitization, a key challenge is related to adapting industrial relationships to a state where value is increasingly created by digital rather than physical component. However, current knowledge about this is lacking. More specifically, there is a need to investigate how provider-customer relationships are transformed, as a shift from transactional to relational interaction is needed. A further complicating factor that emerges in digital servitization is that relationships tend to extend beyond provider-customer relationship and spreads across ecosystems of multiple actors, including equipment providers, digitalization partners, besides customers. This creates various challenges, as providers have to secure their roles in an ecosystem where they may have to simultaneously cooperate and compete. Therefore, there is a need to investigate how ecosystem relationships are configured. This thesis adopts the theoretical lens of the relational view (Dyer et al., 2018; Dyer & Singh, 1998) to advance understanding of how industrial relationships develop for digital servitization. More specifically, the purpose is divided into two research questions: 1) How can provider-customer relationships be transformed for digital servitization?, 2) How can a provider configure ecosystem relationships for digital servitization?. 

Research methods: A qualitative case study methodology was adopted, and cases were selected based on theoretical sampling. Data was mainly collected through semi-structured interviews with company informants, supplemented by secondary data. Data was analyzed following the method of Gioia et al. (2013).

 Findings: The thesis integrates the findings of five papers into a ‘relational framework for digital servitization’. The framework draws on the relational view theory, which suggests four determinants of inter-organizational competitive advantage: complementary resources and capabilities, relation-specific assets, knowledge-sharing routines, and effective governance (Dyer et al., 2018; Dyer & Singh, 1998). The four determinants are conceptualized for the context of digital servitization and used as theoretical lens to synthesize the findings into two layers. First, from a provider-customer perspective, the findings show that it should transform to one that is based on co-creation logic with a long term-perspective, and the framework underlines four principles in this endeavor. From an ecosystem perspective, the findings show that the ecosystem should be centered on a focal value proposition (digital service) targeted at a specific industrial customer, and providers need to align activities for interdependent value creation with other actors. The framework suggests four principles to that end. 

Contributions and implications: This thesis contributes to the emerging literature on digital servitization by developing processes and overarching principles for transforming provider-customer relationships. The thesis also contributes to the growing body of literature on innovation ecosystems by demonstrating the central role of ecosystem alignment in digital servitization and suggesting frameworks and principles for configuring ecosystem strategies based on assessing the context. Furthermore, the thesis contributes by emphasizing the interplay between technology development, ecosystem configuration, and business model design in digital servitization. Besides its theoretical contributions, this thesis has implications for managers who are active in digital servitization efforts in manufacturing firms and digital services providers, in addition to managers in firms pursuing the procurement of digital services. 

Digital technologies are enabling the transformation of historically product-centric companies to become service providers, a trend referred to as ‘digital servitization’. By embedding digital components into physical products, industrial providers can offer digital services such as fleet or site optimization to improve their customers’ operation processes. However, digital servitization is a challenging undertaking, as it tends to disrupt and radically change the traditional business logics of product providers, and a key challenge has to do with capturing the value created from digital services. Further, digital servitization requires an extensive transformation of the provider–customer relationship toward a co-creation logic and relational interaction. Furthermore, few single providers have all the capabilities needed to create and deliver digital service thus, stressing the need for multiple partners to work together in so called ecosystems, to realize the benefits from digital servitization. Despite the growing interest in digital servitization in research and practice, knowledge of how to go about this transformation is still lacking. Therefore, the purpose of this thesis is to advance the understanding of how digital servitization unfolds for industrial providers.

Comprised of a cover story and four separate but interrelated articles, this thesis explores the transformation of historically product-centric companies into digital service providers. Adopting a qualitative and inductive research approach, this thesis is empirically based on four multiple case studies, including 150 interviews with 21 industrial providers, their customers, and the extended ecosystem of partners.

This thesis mainly contributes to the emerging literature on digital servitization by proposing a framework for how digital servitization unfolds for industrial providers. The framework presents three categories of activities that the digital service provider performs 1) internally toward developing the digital service offering, 2) toward transforming the customer relationships, and 3) toward orchestrating the ecosystem partnerships. Thus, it extends the discussion on how companies go about the transformation of digital servitization, how the relationship with customers is transformed, and what capabilities are needed to orchestrate ecosystem partnerships.