Time to read: 4 minutes | Published: March 10, 2025
OEM What is OEM?
An OEM, or "Original Equipment Manufacturer," makes a part or component used in another company's product. For example, Ford uses windshields from PPG, an OEM.
- OEM defined
- Why OEMs?
- OEM Software
- OEM Hardware
OEM definition
An Original Equipment Manufacturer (OEM) makes components of another company’s products. An OEM component might be a part, a subsystem, or software. Examples include operating systems (OS) and microprocessors in computers. Typically, the computer manufacturer makes neither the microprocessor nor the OS. Rather, the computer maker buys these on an OEM basis from other companies. In this sense, OEM can also be used as a verb, as in "to OEM a part" from another business.
Why OEMs?
Working with OEMs can save a company a great deal of time and effort. Instead of developing and manufacturing a component, a business can simply acquire someone else’s design and leverage their expertise and support organization to benefit their own product. OEM relationships enable a business to focus on their core competencies. For the OEM itself, the customer essentially becomes a volume sales channel, e.g., PPG benefits from Ford selling its windshields as built-in parts of their cars.
What is OEM Software?
OEM software refers to software that is sold to hardware manufacturers for bundling with their products, rather than being sold directly to end-users. This type of software is typically pre-installed on devices such as computers, smartphones, tablets, and other electronics before they reach the consumer market.
Benefits of OEM Software:
Cost Savings:
- Lower Costs for Consumers: OEM software usually comes at a reduced price because it is sold in bulk to manufacturers. This cost-saving is often passed on to consumers, making devices with pre-installed OEM software more affordable.
- Volume Licensing Discounts for Manufacturers: Manufacturers can purchase OEM software at a lower price in large volumes, reducing their overall production costs.
Convenience:
- Pre-Installed Software: Since the software is pre-installed, end-users do not need to go through the installation process. This is particularly useful for users who may not be tech-savvy.
- Ready-to-Use Devices: Devices come ready to use out of the box, which improves the user experience and convenience.
Compatibility and Optimization:
- Hardware-Software Integration: OEM software is often optimized for the specific hardware it is bundled with, ensuring better performance and stability. This can lead to a more seamless and reliable user experience.
- Driver and Firmware Compatibility: Manufacturers can ensure that the necessary drivers and firmware updates are included, minimizing compatibility issues.
Support and Warranty:
- Single Point of Support: When OEM software is bundled with a device, the manufacturer typically provides support for both the hardware and the software. This can simplify troubleshooting and warranty claims.
- Extended Support Contracts: Some manufacturers offer extended support contracts that cover both the hardware and the OEM software.
Brand and Marketing Benefits:
- Brand Loyalty: Bundling reputable software with hardware can enhance the brand's image and build customer loyalty.
- Value-Added Services: Manufacturers can offer value-added services by bundling premium software, which can differentiate their products in a competitive market.
Customization:
- Tailored User Experience: Manufacturers can customize the software to better fit their hardware and target audience. This customization can include branded themes, pre-installed apps, and other enhancements that provide a unique user experience.
Examples of OEM Software:
- Operating Systems: Windows pre-installed on PCs, Android OS on smartphones.
- Productivity Software: Microsoft Office pre-installed on laptops.
- Security Software: Antivirus software bundled with computers.
- Utility Software: Device management tools, drivers, and firmware updates.
What is OEM Hardware?
HPE (Hewlett Packard Enterprise) and OEM Hardware:
Hewlett Packard Enterprise (HPE) is a major player in the technology industry, providing various products and solutions such as servers, storage systems, networking products, and software. HPE leverages OEM hardware in several ways to enhance its product lines and support offerings.
1. Component Integration:
HPE often incorporates OEM hardware components into its own products. These components can range from processors and memory modules to storage devices and networking components. By sourcing high-quality OEM hardware, HPE can ensure that its products meet specific performance, reliability, and compatibility standards.
2. Custom Solutions:
HPE develops custom solutions tailored to the needs of specific industries or applications by integrating OEM hardware. For example, HPE might use specialized storage solutions, networking equipment, or processors designed for high-performance computing, big data analytics, or cloud environments.
3. Branded Products:
HPE may rebrand OEM hardware products under its own name and integrate them into its product lines. This allows HPE to offer a broad range of solutions without having to manufacture every component in-house. Examples include rebranded servers, storage systems, and networking equipment.
4. Scalability and Flexibility:
By leveraging OEM hardware, HPE can scale its product offerings more effectively and introduce new technologies faster. This flexibility allows HPE to adapt to changing market demands and incorporate the latest technological advancements into its solutions.
5. Lifecycle Management and Support:
HPE provides comprehensive lifecycle management and support for its products, including those that contain OEM hardware. This includes firmware updates, driver support, and ongoing maintenance. HPE's global support infrastructure ensures that customers receive timely assistance and updates, regardless of the underlying OEM components.
6. Partnerships and Collaborations:
HPE forms strategic partnerships with leading OEM hardware manufacturers to ensure the best possible integration and performance. These collaborations often involve co-engineering efforts to optimize hardware and software compatibility, resulting in enhanced solutions for customers.
