Hacker News Reader

Comment by MontyCarloHall | Hacker News Reader

>EE salaries are sadly lower than they rightfully should be.

Profit margins of an EE will almost always be lower than profit margins of a software engineer. A team of software engineers can quickly scale to selling to millions of users (and collect nearly 100% of the resulting revenue as pure profit), whereas a team of EE's cannot a) scale their customer base as quickly, since scaling up manufacturing takes time and b) realize a profit anywhere close to 100% of revenue, since much of their revenue goes towards manufacturing and distribution costs.

In other words, the marginal cost of selling one unit of a physical product is always nonzero, whereas the marginal cost of selling one unit of software is often (very close to) zero. That differential goes towards higher salaries for the software engineer.

View on HN

In the long run, yes.

There are shorter term effect where for at least a generation there's been too many new grads able to design hardware I2C devices, resulting in too many new grads also able to write I2C driver software as a backup career, resulting in low pay across the board for both fields.

Just because a student likes the field, and can pass the ever more difficult filter classes along the way, doesn't mean there's a job waiting after graduation in that field. For some reason students keep signing up for an EE education even though the odds of them getting an EE job after graduation are very low. The odds of them getting any job, even a high paying one, are good because the majority of the graduating class goes into software development, mostly embedded, but most kids who can, like, bias a class-C amplifier transistor, will never have a job doing EE stuff, there's just too many EE grads for too few EE jobs.

As another example of that effect, see also K-12 education where for at least one generation, the bottom half of the graduating class was never employed in the field, at least in my state. Enrollment for K12 has absolutely cratered in recent years, and now most grads have a reasonable chance of getting a job in their field.

I understand this but I think the biggest driver for software salaries is the sheer number of companies that are interested in hiring software engineers. Plenty of hardware companies are very profitable but do not raise their salaries because there is no market pressure to do so as the more limited job market means EEs/embedded engineers do not switch companies nearly as frequently and switching companies is generally the best way to get a substantial salary increase.

Which hardware companies have SaaS margins? I think 10% margin is very good for a hardware company. A software company would aim for multiple times that.

Yeah. For giant majority of applications and compankes the hardware exists already. Servers, phones and personal computers.

Reply on news.ycombinator.com