This has nothing to do with James' role but with economy of scale.

If James works on an IOT widget the company will probably manufacturer a few hundred thousand devices and hopefully profit a few million.

If Steve is working for Spotify, with 130 million MAU, whatever Steve produces is not linearly scaled with the physical manufacturing of a widget.

Arguably operational costs go up with number of users but the cost is much more invariant in it's relation to total MAU.

This means that whatever Steve decides to charge Spotify, will always be a literal drop in a bucket for their budget.

It's the same reason VC's pour money into SaaS and social media apps but tread very carefully before investing in companies making physical things.

Thank you, that was a pretty clarifying explanation.

Hi, I am James, and I do in fact get paid. That being said: I do this as a consultant, and my official job title has never been "system engineer" (usually some flavor of software engineer).