The business of manufacturing companies is evolving towards knowledge-intensive industrial services. It is important to stay as near to the customer process as possible in this evolution to enable the growth of efficiency of customer business over the life cycle. In this type of business, in addition to managing material and financial flows, information and knowledge flows have to be managed much better. However, complexity is also increasing because of the new offerings and the need to network all operations and manage distributed information and competence. It is obvious that the business model and other supporting business structures of partners in the value network are in constant transition. It is thus important to master innovation in the customer process over its life cycle. The objective of this article is to introduce a concept of integrated service and product development during various types of innovation in life cycle business evolution routing. When business is changing, various types of innovations tackle it: business, market and life cycle innovation. Knowledge intensive service innovation needs open semantic infrastructure with master data structures provided by life cycle management architecture. The balance in running business comes by synergy management. The hybrid innovation model is been developed as a joint initiative between research institute experts and various international companies and was applied to individual enterprise strategies in order to validate how synergy management by hybrid innovation can be used to drive business value through creation of new services. Insight into one participant case study is provided to substantiate breadth of applicability and ease of use.