Turning products into services and services into products: Contradictory implications of information technology in the service economy

Neil C. Ramiller, Elizabeth Davidson, Erica L. Wagner, Steven B Sawyer

Research output: Chapter in Book/Report/Conference proceedingConference contribution


Service industry sectors of modern economies are growing rapidly, in absolute size and in comparison to the manufacturing, agriculture, and other economic sectors. Implicit in the dramatic proclamations that have accompanied this worldwide shift to the service economy is a subtext about the displacement and subordination of products. The notion of displacement speaks, in a straightforward way, to the diminishing relative importance that material products play in production and consumption and, hence, in providing opportunities for employment. That information and communication technology (ICT) enabled innovation has played a crucial role in the emerging dominance of services is well known, for example, in all aspects of financial service sectors. Subordination is more interesting because it has to do with the changing and unsettled relationship between products and services and, indeed, ambiguity in the very definition of "service" itself. This subordination has taken a variety of forms: Producers and purveyors of products add information-intensive service dimensions in order to enhance relationships with customers and, in some cases, to generate network effects among the customers themselves (e.g., Amazon.com's online customer reviews of books and data-based book recommendations). Products themselves have become servicitized in the sense that a product comes with a service component that is crucial in fully constituting the product as a meaningful "solution" for the purchaser (Vandermerwe and Rada 1988). The delivery of these components is often ICT-enabled (e.g., call centers in support of consumer electronic products). We witness the servicitization of products in an alternative sense, where the purchaser never takes possession of the material product but rather subscribes to the service that the product provides, with the purveyor maintaining ownership of the physical asset (e.g., ASP models of computer or software use and outsourcing of certain other kinds).

Original languageEnglish (US)
Title of host publicationIFIP International Federation for Information Processing
Number of pages6
StatePublished - 2008
Externally publishedYes

Publication series

NameIFIP International Federation for Information Processing
ISSN (Print)15715736


ASJC Scopus subject areas

  • Information Systems and Management

Cite this

Ramiller, N. C., Davidson, E., Wagner, E. L., & Sawyer, S. B. (2008). Turning products into services and services into products: Contradictory implications of information technology in the service economy. In IFIP International Federation for Information Processing (Vol. 267, pp. 343-348). (IFIP International Federation for Information Processing; Vol. 267). https://doi.org/10.1007/978-0-387-09768-8_25