The Internet of Things (IoT), as a vital component of China's strategic emerging industries, is increasingly playing a key role in accelerating economic growth, driving industrial transformation, and enhancing people’s daily lives. With widespread applications in consumer IoT, industrial IoT, and automotive networking, the sector is creating new opportunities for innovation and development. The “International Symposium on Core Technology and Applications of the Internet of Things in 2017,†held in Shenzhen on September 5, 2017, brought together leading experts from around the world to discuss cutting-edge trends and latest technological advancements. Mr. Zhou Ligong delivered a speech titled “Platform as a Service,†highlighting the importance of platform-based solutions in modern technology.
A question that often arises is: why do some products have low BOM costs but high gross margins, yet listed companies still struggle to generate sufficient annual profits? Who ultimately ends up buying these products, and what are the real challenges behind this phenomenon?
**Revisiting the Cost Structure**
Many managers and developers focus only on the BOM cost, often underestimating the hidden expenses that significantly impact profitability. When asked about product launch timelines, the usual response is “almost ready.†But why does this happen? These hidden costs are often the main source of profit loss. Understanding and managing these costs is essential for long-term success.
**Where Does Profit Come From?**
In the early days of entrepreneurship, seizing an opportunity, attending trade shows, and advertising were enough to ensure success. However, in today’s competitive landscape, it’s harder than ever to stand out. As competition intensifies, the pressure to reduce prices grows, and the era of easy profits has passed. Companies like Apple succeeded not just by selling products, but by delivering exceptional user experiences and leveraging reusable core knowledge to keep costs low.
According to structured design principles, software should be designed with cost efficiency in mind. Maintenance costs often exceed initial development costs, making it crucial to build systems that are easy to maintain and scale.
**The Importance of Reusable Knowledge**
Programmers spend more time reading code than writing it. This means that the cost of modifying software can be much higher than the original development effort. To reduce these costs, it’s essential to think critically and develop reusable models and methodologies. This is where true innovation lies.
Managers must understand the profit equation: profit = demand – design. Demand refers to how well a product is sold, while design relates to cost control. If either side is mismanaged, profits suffer.
**Eliminating Unproductive Effort**
One of the most important steps is to remove inefficiencies—those who lack creativity or fail to contribute meaningfully to the company. Many employees add unnecessary costs without adding value. For example, developers who simply copy demos instead of designing cost-effective solutions may not bring real value to the table.
**Thinking Differences and Benefits**
Financial data often reveals that early decision-making errors and a lack of systematic engineering methods lead to long development cycles, technical difficulties, and poor returns. Software that isn’t reusable or scalable increases development costs and reduces competitiveness.
Even though many developers are hardworking, their focus is often misplaced. They prioritize learning basic skills rather than understanding user needs or collaborating with marketing teams. This misalignment leads to wasted energy and missed opportunities.
From a software and hardware development perspective, the difference between disciplines lies in human factors. Engineering is closer to economics than pure science, and changing our mindset is key to building products that are both profitable and efficient.
**Core vs. Non-Core Domains**
A software system consists of multiple domains. The “core domain†represents the system’s unique competitive advantage, while the “non-core domain†includes generic components such as drivers, operating systems, and libraries. While improving non-core areas is necessary, true differentiation comes from deep investment in the core domain.
To achieve effective reuse, it’s important to separate core and non-core domains. Mixing them too early adds complexity and hinders progress. As problems grow, dividing knowledge into manageable parts becomes essential.
**Platform Wins**
Code quality directly affects software quality and cost. Maintenance costs often outweigh development costs, yet many projects still rely on brute-force development, leading to wasted resources and inefficiency.
Why not abstract complex technologies and let professionals handle what they do best? That’s where AWorks comes in. By incorporating advanced software engineering techniques, AWorks allows developers to focus on core competencies rather than getting bogged down in non-core tasks.
Developers dream of reusing code across platforms, but in reality, it’s often impractical due to varying chip architectures and operating systems. However, with high abstraction, AWorks enables cross-platform compatibility. Whether using ARM, DSP, Linux, or any RTOS, AWorks ensures consistent performance and flexibility.
**Conclusion**
ZLG (Guangzhou Zhou Ligong SCM Technology Co., Ltd.) continues to evolve rapidly, driven by a shift in thinking and strategy. By focusing on the right ideas and methods, the company prioritizes solving the challenge of “how to sell products†through innovation, while also addressing “how to reduce costs†to maximize profits.
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