Three Ways Industrial Companies Organize for Software

Every industrial company is on the journey from hardware to software.

The organizational question is simple but strategic: Where should software live? 

Across the industry, three archetypes have emerged:

1️⃣ Corporate SaaS Business

Software is built and sold as a separate business with its own P&L, sales force, and portfolio logic.
👉 This model enables scale, clear accountability, and a pure-play valuation narrative — but risks losing touch with hardware-driven customer intimacy.

2️⃣ Divisional SaaS Business

Software sits inside or alongside the operating divisions.
👉 It benefits from domain proximity and existing customer relationships, but integration friction and split incentives often limit speed.


3️⃣ Hardware-Embedded Model

Software remains fully tied to hardware and services — treated as an enabler, not a business.
👉Execution is tight, but growth and valuation multiples stay constrained.

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Each model reflects a different strategic answer to the same question:

𝘚𝘩𝘰𝘶𝘭𝘥 𝘴𝘰𝘧𝘵𝘸𝘢𝘳𝘦 𝘢𝘮𝘱𝘭𝘪𝘧𝘺 𝘵𝘩𝘦 𝘤𝘰𝘳𝘦, 𝘰𝘳 𝘴𝘩𝘰𝘶𝘭𝘥 𝘪𝘵 𝘣𝘦𝘤𝘰𝘮𝘦 𝘵𝘩𝘦 𝘤𝘰𝘳𝘦?