Commoditization in IT markets poses a growing concern for IT firms as it might negatively impact their business performance. To investigate the relations between IT product innovation strategies, commoditization of IT markets and the business performance of IT firms, a survey was developed and 248 business managers responded. This was done to assess the IT firms' business performance impact of different IT product innovation strategies in relation to the commoditization level of the IT market that they operate in. This study confirms that different types of innovation in IT products have a direct positive impact on IT firms' business performance. The commoditization level of IT markets acts as a moderator dampening this positive relationship. This implies that IT firms should take existing commoditization levels as well as a mix of IT product innovation types into account as part of their innovation strategy.