What is OEM (original equipment manufacturer)?

By IBM Services

An integrated support strategy for third party systems, software and components

An original equipment manufacturer (OEM) makes systems or components that are used in another company’s end product. Computer manufacturers, for example, commonly bundle or integrate OEM parts – such as processors and software – into the solutions they sell.

OEMs can save time and money. Third-party components enable an enterprise to focus on its core business instead of having to develop each tertiary part or system.

An end customer, such as an IT department, may handle bundled products and systems involving multiple OEM and third-party vendors. Some form of centralized control is usually required to ensure overall system reliability and availability.


Why OEM is important

By partnering with an OEM, a manufacturer or reseller can reduce costs. Companies don’t need to build manufacturing facilities or handle OEM production in-house. They simply integrate the OEM parts into their system and sell under their own brand name.

OEM products can be cheaper due to economies of scale. “The OEM excels in building one product and one product only, and thrives by building hundreds of thousands, or even millions of those products on a cost-effective, streamlined basis,” says TheStreet.⁽¹⁾

What’s more, OEMs may provide a good return on investment. “OEM parts, components and products extend the life of the partnering company's product, thus maintaining top performance and saving money with replacement parts and increasing the company's financial bottom line.” ⁽²⁾

The cost savings are usually passed along to the customer who purchases the bundled product or system.

For the end customer, managing multiple products, systems and vendors may become a complicated task. As an enterprise adopts new technologies, the technical support and maintenance model grows exponentially. Dozens of OEMs and third-party providers may be servicing their hardware and software products.

Many organizations reduce their OEM and vendor complexity with a centralized support and service model.

“Trying to support IT solutions that include products from several vendors would be like having to manage the roughly 30,000 parts that make up your car,” says David Subia in his IBM blog. “Would you have multiple vendors managing each part, or go to one trusted mechanic to ensure that it performs efficiently, safely and at minimal cost to maintain?” 

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Key features of effective OEM support

An IT support provider offers services to help a customer with its multivendor environment. The provider can manage relationships with multiple OEM and third-party vendors on behalf of the organization – from a single point of contact.

A services partner can support multivendor products, offer simplified invoicing and maintain consistent service levels. As well, the provider handles replacement logistics with suppliers, making sure components or parts are available when required.

The right support partner also uses technology innovations such as artificial intelligence (AI) and analytics to proactively monitor, diagnose and resolve product or system problems.


Product fixes, patches, updates and other functions are often done automatically, without notification to human operators. As part of its service, a support provider will document that the work has been completed. A blockchain can assist the task by providing traceability and accountability across the system.

By embedding blockchain into multivendor support contracts, support services can provide audit-ready transaction data while monitoring service level agreement (SLA) metrics.

Predictive analytics

Predictive analytics extracts insights from data to predict trends and behavior. Cognitive technology (AI) can process questions from hundreds of technical support agents. It analyzes and ranks support solutions using probability scores based on previous fixes, log files and other technical documentation. With these capabilities, an enterprise can identify upcoming hardware failures before they arise and prevent them from occurring again.

Augmented reality (AR)

An AR platform provides visualization tools and 3-D modeling for mobile devices. It allows a technician to capture real-time images of technical issues and share with a remote product specialist. The expert guides the technician to repair the problem using interactive voice and video links.

Giving technicians immediate access to the right knowledge for any situation helps lower the cost of support operations and keeps systems up and running.

Watch the video - IBM Augmented Reality for Technology Support Services



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1. https://www.thestreet.com/markets/commodities/what-is-original-equipment-manufacturer-oem-14696882

2. Ibid.