Hardware’s Ideal Employers Face Incredible Pressures

Hardware is a notoriously difficult sub-industry. Some 97 percent of crowdfunded hardware startups implode, and the histories of tech’s largest firms are littered with devices that failed to make any sort of market impact. And even if a company manages to produce hardware that gets traction, that’s still no guarantee of a financial windfall; there are a lot of smartphone manufacturers, for example, but Apple still took 79 percent of the smartphone industry’s profits in 2016.

What makes hardware so, well, hard? It’s a perfect storm of factors. Research and development is painstaking and expensive; the size and complexity of the supply chain often makes margins razor-thin; and customers are a notoriously fickle bunch, meaning a product usually has a very narrow window before it’s ignored in favor of the next big thing.

A similar paradigm applies for enterprise hardware. Whether network switches or sensors for jet engines, the hardware that keeps businesses running is often the result of years of budget-busting research, and the competition is fierce; if a firm spends millions of dollars developing a new server, only to find itself outpaced within months by a competing offering, then its revenues and market-share could take a potentially fatal hit. Although many businesses buy hardware for the long term, procurement managers can sometimes prove as fickle as a teenage smartphone-buyer.

Apple, which headed up the list of our hardware Ideal Employers, has managed to mitigate each of those factors. The company has an enviable collection of in-house designers and developers, with teams often working in close collaboration on the latest products. Tim Cook, who served for years as Apple’s Chief Operating Officer before taking the CEO slot after co-founder Steve Jobs’ death, crafted a supply chain that guarantees incredible margins, with Apple often leveraging its scale to get the best deal from its suppliers. Last but certainly not least, the company’s carefully tuned marketing apparatus ensures that each new product is embraced by a hard core of fans.

With all the buzz around Apple, it’s easy to forget that the company isn’t a pioneer in many of the hardware categories it dominates; rather, it recognized nascent industries and introduced the most refined version of a particular product. There were handheld digital music players before the iPod, smartphones before the iPhone, and “smartwatches” before the Apple Watch; but in each case, Apple analyzed the competition and produced a version that was more refined. If Apple is revolutionary in any sense, it’s in details such as multi-touch gesturing and camera optics, which rivals often attempt to imitate (with varying degrees of success).

Cisco Systems came in second on this list, followed by Dell, Hewlett-Packard, and General Electric. This is an interesting blend of consumer- and enterprise-centric hardware makers, but they all share a couple of things in common: all are attempting to tackle huge problems for big audiences, and all have the capital necessary to provide the high salaries and positive culture that tech pros indicated to us are some of the most important factors in an employer.