Software-Based Product Development - COTS or Custom-Made?

Engineering teams face a crucial question, especially in software-based product development – whether to opt for standard Commercial Off-The-Shelf technology (COTS) or custom-made solutions tailored to their technological needs.

In most cases, software development significantly precedes the selection of the computing platform on which the software will run. Sometimes, however, the choice of computing platform is postponed until the final stages of development due to various considerations. Identifying and choosing the optimal technological solution as early as possible is critical and can significantly save on resources and budget.

Companies in medical devices, cybersecurity, semiconductors, and others often work with integration partners who are crucial in turning an idea into a product. They support the company from the concept stage through development and up to the point of distribution to international markets. This resource allows tech companies to focus on developing their Intellectual Property (IP) and software. At the same time, their integration partner handles everything outside the product’s core development, including hardware selection, supply chain management, and global logistics. Choosing the right integration partner is critical to the product’s success in terms of global accessibility, pricing, availability, and service quality for the end customer. All of this is aimed at reducing time-to-market and saving valuable resources.

Commercial Off-The-Shelf

COTS computing refers to hardware developed and produced for general use without specific consideration for its particular application. It usually has a predefined, short lifespan and is designed based on the broadest common denominator. It requires no particular certifications or components and is generally cheaper, allowing quick market entry with an attractive price for the end customer, supported by international service availability. However, COTS hardware also has significant drawbacks: once the customer defines the hardware configuration, it may include unnecessary features that increase costs. On the other hand, it may lack essential features that could significantly impact performance. In such cases, the integration partner might need to adapt the existing standard hardware, such as turning off unnecessary functions, which can result in a product that is too complex or oversized.

Custom-Made

Custom-made computing refers to hardware – either components or a complete system – developed and produced to meet the specific needs of its application. It is designed based on a technical specification usually defined by the company’s product development team. Some of the key benefits include:

1. High Flexibility – This involves the freedom to choose components, providing specific solutions for processors, memory, storage, and network needs. The integration partner is usually involved early in the process, defining the hardware architecture and understanding software bottlenecks. This upfront collaboration prevents mistakes and significantly streamlines the product development process, empowering the team with control over the product’s design and performance.
2. Long Lifespan – Custom hardware is designed with long-term use in mind, supporting future product iterations and preventing unexpected supply shortages – this is crucial for long-term projects. Many tech companies have realized that investing in tailored solutions is worth it because of the extended lifespan of such products, sometimes up to 15 years. Developing the hardware and software in parallel ensures long-term compatibility, preventing the need for frequent re-certifications or costly delays. For example, medical devices or defense products often have long product development cycles, require specific certifications, and involve significant financial and time investments. Custom hardware can provide consistent, reliable products over many years, eliminating concerns about obsolescence every two to three years.
3. Improved Performance – Custom hardware can offer optimized performance for a wide range of workloads, including high-computing-power applications or specific needs for graphics processing. This results in maximum performance at minimal cost.
4. Branding and Presence – Another advantage is the ability to tailor the hardware to the company’s branding, providing exposure and enhancing its reputation, which can translate into a competitive advantage.

However, custom hardware also has its downsides. If sales volumes are small and the number of units needed is relatively low, investing in specialized hardware may not always be justified. For instance, it might be more cost-effective to start with off-the-shelf solutions in a start-up environment where resources are limited. Additionally, some tech companies prefer external global service support, making it challenging to manage custom hardware alongside third-party field technicians.

A Holistic Solution – The Key to Success

The challenges tech companies face during the product development process are numerous and complex. Overcoming these requires extensive experience and a diverse set of capabilities. Here are five key factors to consider when selecting a partner to help develop a product that will succeed on the global stage:

1. Technological Expertise – The computing world – storage, communication, cybersecurity, virtualization, AI, and more – is vast and complex. Ensure your partner has the technical and engineering resources to support you for years. Ideally, the integration partner should have proven IT industry experience, including hardware architecture and software expertise, which is essential for understanding bottlenecks in your application and making informed decisions on the right solution.
2. Product Development and Manufacturing Capabilities – The ability to develop, manufacture, assemble, integrate, and provide end services in major global markets is essential. Solutions of this nature require the capability to produce large quantities at high quality and a proven track record of delivering consistent products, often over many years.
3. Operational Strength and Global Supply Chain – Everyone wants to operate globally, and your partner must have a global operational infrastructure across various continents. Today, customers expect fast delivery from local inventory and geographically close post-sale support.
4. Partnerships with Leading Hardware Manufacturers – The range of available technologies is vast and constantly evolving. Established, long-term partnerships with multiple technology manufacturers allow for flexibility in solution design, ensuring that the customer receives the best long-term solution. Access to these manufacturers’ future roadmaps is also critical.
5. Support and Logistics – After product development, continuous support throughout its lifecycle is vital, including professional logistics management to ensure global and local production.

In conclusion, whether developing medical imaging machines, complex military systems, or cybersecurity solutions, an integration partner with these capabilities will provide significant added value. This will allow tech companies to focus on their core activities and give them peace of mind as they implement the optimal solution and deliver it globally for years.