To digitize, as it refers to embroidery digitizing is defined as "taking an image and using an embroidery programs to turn it into an digitizing embroidery designs a computerized machine can read and sew". Before computers, embroidery was performed by punching the design into paper tape and using a mechanical embroidery machine. It was a very inefficient method for embroidering. Now there are several software programs that digitize logos for embroidery.
Software programs are quite expensive because they provide a lot of functionality, allowing the embroiderer to also edit the design and colors. The colors may need to be changed, or the design optimized in order to have a good looking result. Embroiderers must have years of experience with these programs to produce a good looking product. There are several inexpensive programs that offer "scan and stitch" methods, but the result is very poor. Digitizing is typically a one time fee paid to embroiderers, and though the cost is high, the company is usually not making money off the service.
Be prepared to let the embroidery companies do their job when turning in a logo for digitizing. There are several design elements that may look good on paper, but simply don't work in embroidery. Avoid things like thin lines and color blending in your logo for the best appearance.
By using years of digitizing experience, embroiderers can turn your logo into an embroidery ready piece of art that can be used for all items to come.