Traditional strategy in existing markets or product classes typically involves reducing costs, improving quality, or incremental innovation, which leads to increasingly dense competition with little room for maneuver. In order to compete in a digital era, traditional companies have to reinvent themselves by reallocating their resources and business processes to offer a new service value proposition in parallel to the legacy one. This thesis investigates the business model restructuring of companies in terms of service-oriented value innovation as a new business model woven in an established product-oriented company. Johnson’s business model framework, with its four interlocking building blocks, provides the basis for qualitative research exploring how companies reinvent themselves to foster radical service innovations. The research approach includes three case study companies in the business-to-business sector, each of them representing the key actors in their industry. Research was conducted through 31 semi-structured interviews over more than a four-year period. The research helps unpack the evolutionary process of the new service business model, illustrating how companies manage the steps from a single project base to a service value proposition suitable for the mass market. While existing theory already provides an understanding of what a business model is and which single elements might be involved in an innovation process, the research extends this to explore how the elements of a service-based business model innovation affect each other in an activity system and how they become relevant in the course of the evolutionary process. The core findings also expand the business model approach in terms of an ecosystem perspective, which plays a decisive role in the innovation process in terms of newly established partnerships for the new service value proposition but has remained hitherto underexplored.