You’ve almost certainly heard the terms OEM and ODM tossed around in the computer hardware business. Defining the initialisms is easy enough. OEM stands for Original Equipment Manufacturer. Over time however, OEM has begun to be used to describe the broader relationship between one company that manufactures a product and one that sells that product under their brand. ODM on the other hand means Original Design Manufacturing and refer to a model where full project specifications are decided by the reseller.
So why are OEM services such an integral part of the computer hardware business, what do these OEM computer services provide, and how do Original Design Manufacturing (ODM) services differ?
Who is the OEM?
Originally, OEM only referred to the manufacturer supplying materials to other companies to incorporate into their products or rebrand as their own. Confusingly however, OEM is now also often used to describe the company acquiring and re-selling products to an end user. These type of companies are also sometimes referred to as Value-added Resellers (VARs).
In the tech industry, a company that purchases a computer from OnLogic and packages it with their own specialized software would, by definition, be a VAR. However, the industry often refers to these types of businesses as OEMs because their customers are largely unaware that OnLogic manufactured the hardware before it was rebranded and sold. Regardless of the terminology, here at OnLogic, we understand the challenges that end-to-end hardware providers face, which is why we offer a wide range of OEM services.
ODM, or Original Design Manufacturing, refers to a producer/reseller relationship in which the full specifications of a project are determined by the reseller, rather than based on the specs established by the manufacturer. The ODM model is most typically used in international relationships where an overseas design firm might use a domestic company to manufacture products to their specifications. Once again, originally ODM would refer exclusively to the product manufacturer, however in the tech industry ODM has also begun to be applied to either party in the relationship.
In many instances these fully custom projects are handled by a dedicated account manager who can assist resellers throughout the process, from initial needs assessment to shipping, logistics and supply chain maintenance. The differences between OEM and ODM manufacturing relationships can be challenging to understand, particularly in the computer hardware space, and especially with the ongoing conversation about whom the OEM/ODM company in the relationship truly is.
OEM computer services have become big business for hardware companies with the capabilities to produce custom solutions. Why? Quite simply, businesses utilizing OEM services benefit by leveraging the manufacturing capabilities of the hardware provider without the need to concern themselves with product assembly and logistics. They get a custom appliance, built to their specs, that boosts their brand. OEM/ODM production can take place at both the board level, with the customization of mainboard layout and performance, and at the system level where the overall design and specifications can be manipulated to meet end user needs.
Services, Process, and Flow
Companies offering the full spectrum of OEM services can provide products that fulfill the needs of a wide range of resellers. Want a standard system that simply features your logo? Need to utilize a different motherboard or specialized I/O? Light customization is part of the OEM service offering.
In instances where a project requires a fully customized appliance, OnLogic offers a full suite of OEM/ODM services including:
Beyond the Initial Purchase
OEM/ODM services may also extend well beyond the initial purchase. The manufacturer may offer additional vendor interaction, logistics oversight, technical support and component end of life support. Cultivating this ongoing relationship also helps to ensure that if products need to be redesigned to adapt to a changing marketplace, both the reseller and the hardware manufacturer are in a position to react quickly.
Designed To Be Redesigned: Modularity in OEM Solutions
Some companies offer designed-to-order services that can take months or even years to deliver a product to market. Here at OnLogic we provide a range of OEM/ODM services designed to provide a cost effective and production-efficient solution to clients interested in making our systems part of their own branded lineup. Our program can take an off-the-shelf system and turn it into branded custom hardware that is customer ready out of the box in only 90 days. For more information about how we can help your business turn your hardware vision into a reality, visit or www.onlogic.com/services.
Note: This blog was originally posted on May 22, 2014. It was updated for content on August 2, 2020.