ODM vs OEM Services: What’s the Right Hardware Manufacturing Strategy for You?

OEM vs ODM services

With the race to get products and solutions to market only becoming more and more intense as we move into the age of 5G and software defined infrastructure, choosing a reliable hardware partner to commercialize your solution on a fast track is critical to stay in business. OEM or ODM Services are two flexible hardware manufacturing models that can facilitate launching new products with high quality hardware platform, production of which can be scaled as desired.


In order to beat the competition and get a product worth buying onto the market, companies need to be aware of their own strengths and weaknesses, including their ability to conceptualize, design, research and development, and manufacture their solution.

When it comes to network appliances, OEM and ODM services are two flavors that most hardware manufactures offer as options. For most software-based solution developers it’s a no brainer to source expertise of a specialist hardware manufacturing company. However, decision that requires much deliberation is whether to go with an OEM customization service that offers management of hardware lifecycles with pre-validated, re-branded platforms, or invest in a completely new platform design using ODM (Original Design Manufacturer) services of the manufacturer. Whether to choose OEM customization or go with ODM is a decision that requires careful consideration and evaluation of resources.

In this article, we’ll be looking at what exactly OEMs and ODMs are, what the differences are between them and how best to decide which one is the right model to deliver your solution. So, let’s jump straight in.

What are OEM Services?

OEM Customization means offering pre-validated and tested hardware product lines for different application verticals. Customers can select from the range of current SKUs and get them re-branded or further customized as needed, get them built in high volumes on relatively short time-frame and avail discount pricing. OEM hardware builders invest heavily in design and engineering of these standard off the shelf products, using their knowledge and experience working with number of applications and use case scenarios. ODM hardware providers such as Lanner offer OEM services to facilitate customers who prefer this model for productizing their software based solution.

There are a number of benefits to using OEM customization strategy for providing your own software-defined solution.

Examples of OEM Service Advantages

Time to Market

ODM Hardware manufacturers such as Lanner also offer OEM customization services for companies that require a standard platform with minimal customization. A key benefit of using OEM model as opposed to an ODM model, is that it allows smaller companies and startups to launch their solutions in high volume within a short timeframe leveraging mass-production capacities of ODM/OEM hardware manufacturer. Once your solution is past the testing phase and is ready for commercialization, OEM services from a network appliance manufacturer will be your quickest route to market. OEM hardware builders offer dozens of off-the-shelf appliances that have been built and tuned for specific application verticals. They have already invested in application-specific design and engineering of their existing products. They can share valuable knowledge gathered from a number of other similar use cases and ensure you get a platform optimized for your solution.

Cost-effectiveness

As an Independent Software Vendor (ISV) or a software-defined network solution provider, your main investment and focus has to stay around R&D. Working with OEM hardware manufacturer with a strong focus in your industry, can be very cost saving due to their familiarity and expertise with hardware for your industry applications.

Easier Process

Compared to ODM, OEM customization offers a shorter process. ODM service extends across various phases that create a perfect, fully customized platform purpose-built for the application. It includes various stages, from design to hardware engineering, prototyping, performance benchmarking, testing, certification, branding and production. ODM program stages requires a prolonged engagement of the whole engineering organization. OEM services on the other hand leverage existing validated platforms to fast track to testing phase.

What is ODM and Who is it for?

Companies dealing in volumes to the tunes of 1000’s a year may most likely find ODM as the way to go. ODM service involves an extensive process of design and engineering of a next-gen product on client´s roadmap, that will be engineered to specific needs and mass-produced with latest generation components to ensure longevity of the design. This is something that benefits companies of large scale, who invest considerable amounts in marketing, logistics and channel to launch their solutions to a broad territory. Hence products must offer long term lifecycle support as well a lasting competitive edge on basis of proprietary design.

ODM is also becoming a popular hardware manufacturing model among the IoT and AI startups. It allows the flexibility for the startups to create their solutions freely and have the hardware builders provide them with a fully customized platform, engineering, designed and branded for them.

One of the biggest benefits to using ODMs is that they can take a significant amount of strain off of your business when it comes down to both designing and manufacturing your solution. Taking this approach can help you focus on the things your business does best, while at the same time letting the ODM do what it is they do best for you.

Which Strategy is Right for You?

Deciding either an OEM model or an ODM model is largely a question that would need to be considered on a case by case basis. The very existence of these two different models demonstrates how there is no “one size fits all” answer to the challenges of designing and manufacturing and choosing which model would be most appropriate for you can depend on a number of different factors.

One of the biggest factors in this decision would no doubt be resources. Does your business have the resources to both design AND manufacturer your product to the level you require? Will you be able to get the right number of products to market in a suitable time period? What roadblocks could lay ahead for a company like yours when choosing to complete the entire process in-house?

The answers to these questions could well depend on how well resourced your company is. Usually, industrial conglomerates are well-resourced in every way to take up R&D and for most part the manufacturing of some of their product lines. However, it often makes sense for them to work with specialized ODM vendors to develop a cutting edge solution and keep it cost effective. Startups will often need to find someone to assist them in both the design and manufacturing aspects and they may see OEM model a better fit.

Mostly, however, companies will need to understand where their own strengths and weaknesses lie in order to make the most informed decision about whether to use OEM customization or ODM services.

ODM vs OEM Services: What’s the Right Hardware Manufacturing Strategy for You? was last modified: November 11th, 2019 by LEI Technology
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