What Is OEM And What is ODM?
OEM Definition & ODM Definition:
OEM (Original Equipment Manufacturer) and ODM (Original Design Manufacturer) are the most powerful company’s tools to brand their products.
The market is led today mostly by software companies, and these software companies can have two options to view their product:
- As a storage/cyber/networking/etc. software solution provider only.
- As a complete solution provider that deliver both software and hardware, aka “BLACK BOX”.
With the right package, the software product’s value can increase.
What Does OEM Stand For:
OEM allows companies to create a “BLACK BOX” solution with minimum risk, no long term commitment, and no quantity commitment. In OEM, manufacturers resell another company’s standard product (COT – off the shelf) under their own name and branding.
While ODM solutions require a level of maturity (that comes with long term commitment and quantity commitment) from the companies, OEM design is the light way to do it.
OEM Is the right and safe step when the hardware requirements necessary are standard, but the branding is important.
Think of ODM as OEM’s Stepsister: ODM is not only branding an existing self-product, but also is changing the product or even redesigning a new product to meet all customer requirements.
ODM’s major benefit is the ability to create a “Design To Cost” product which increases the competitive strength of the product on the market.
First and foremost, the engine that drives the project is costing viability; the question is whether the final product will be attractive enough to be sold, and also how costs can be reduced.
It is important to understand that shelf products are built according to the broadest common denominator.
This means that, most likely, the nearest shelf product to our needs may contain not required abilities and components (things that increase the prices of hardware) or missing features.
Sometimes, therefore, dedicated hardware design becomes a real option.
When the hardware is part of the considerations during software development, the hardware can be optimized to whole system activity. Dedicated hardware design uses only the necessary components on the board, and on the other hand allows existing components run in harmony and help to achieve maximum performance with minimum cost.
It is important to understand that the hardware contains more than a few lines of software code in the BIOS and in the drivers. These code lines have greater significance maximizing hardware performance.
The right choice of your OEM/ODM partner can also provide extra benefit and important services under the OEM/ODM title.
Choosing The Right OEM & ODM Partners
- Software loading and Quality Control for the complete solution (software & hardware compatibility control)
- Logistic handling – shipments, inventory, VMI, etc.
- Configuration control
By Amnon Haine
FAE and Presale