Engineering Software Market Size, Share & Industry Analysis, By Application (CAD, PDM, PLM, and Design Quality), By Deployment (Cloud and On-premises), By Industry (Automotive, Aerospace and Defense, Manufacturing, Healthcare, Semiconductor and Electronics, Retail, and Others), and Regional Forecast, 2024-2032

The global engineering software market size was valued at USD 44.22 billion in 2023. The market is projected to be worth USD 48.38 billion in 2024 and reach USD 105.30 billion by 2032, exhibiting a CAGR of 10.2% during the forecast period.

Engineering software fulfils engineering and other operating users' requirements to perform enterprise-specific operations. Such software is designed for explicit applications using techniques, formulae, and standards related to a particular field.

Various emerging technologies, such as augmented reality (AR)/VR, digital thread, SaaS-based cloud engineering, and many others, contribute to the development of this market. Hence, prominent market players are enhancing their offerings with innovations, strategic collaborations, product upgrades, and mergers and acquisitions. For instance,

• In January 2024, Siemens, an Engineering software developer, collaborated with Sony to build an extended reality (XR) headset for a 3D designer named NX Immersive Designer. The NX Immersive Designer will combine Siemens’ NX software and Sony hardware for immersive design and collaborative product engineering capabilities.

In the scope, we have considered engineering software, such as CAD, PLM, PDM, and design quality, to help users accomplish enterprise-precise tasks across various industries.

The COVID-19 pandemic stimulated enterprises to implement IT software driven by digital technologies to simplify and rationalize their operations. Moreover, the requirement to innovate products, real-time performance, and customer requirements with engineering software, such as PLM, CAD, and QMS essential solutions across various industries, helped boost market growth.

Engineering Software Market Trends

Increasing Use of SaaS-based Cloud Engineering Software Contributes to the Market Expansion

Engineering software solutions enable engineers, designers, and manufacturers to develop in-detailed models, analyze and simulate product performance and activities, and create crucial engineering documentation.

As cloud-based solutions are accessible to users through a web browser, team members can work distantly from their choice of device. Hence, enterprises can minimize hardware costs and upgrade expenses without losing computing functionality or power. For instance,

• In April 2023, ETQ announced the acceleration of cloud-based QMS implementation across leading brands worldwide. The company continued the expansion of ETQ Reliance QMS with present customers as well as improved functionalities of QMS.

In addition, Software as a Service (SaaS), also called software in the cloud, is progressively penetrating the tech industry. Numerous enterprises are implementing SaaS-based solutions for better outcomes across various industries. The design software is not excluded and these advances are expected to bring changes in deployment and licensing.

According to PTC CAD Software Trends 2023, over 50% of all companies' application spending will be on SaaS-based applications. As they continue investing in the cloud and SaaS, they expect software vendors to also capitalize on cloud and SaaS functionality.

• In May 2023, PTC announced the 10th version of Creo+, Software as a Service CAD solution. Creo+ combines Creo's proven functionality and power with advanced cloud-based tools to enrich design collaboration and streamline CAD administration. With the new version, customers would be empowered to design more easily, quicker, and collaboratively than before.

Such advancements and increasing cloud implementations by enterprises enhance the growing demand and new prospects for cloud-based solutions.

Engineering Software Market Growth Factors

Increasing Adoption of High-tech Technologies, such as 3D Modeling and Digitization, to Boost Market Growth

Enterprises continuously seek ways to maximize productivity and effectiveness while decreasing the project design to introduce their products to market in the minimum time possible to stay ahead of the competitors. Hence, several companies have moved from 2D technologies to 3D transformation.

3D technology helps designers visualize the final product and its components. This allows design faults to be identified quickly, limiting the design process, lowering the cost, and reducing the project's overall time. The increasing adoption of DevOps and Agile practices in software has accelerated the delivery of quality, customer-focused software solutions. It has become a key aspect of business maturity in digitally transforming businesses.

Hence, these advanced technologies are being widely used by enterprises across different industries, such as manufacturing, construction, electronics, and others. For instance,

• According to industry experts, over 80% of CEOs are augmenting their investments in digital technology to counter present economic conditions, including scarce talent, inflation, and supply limitations.

Thus, various global and regional players expand their product offerings with innovations and upgrades in 3D technology that can be implemented across various industries worldwide. 

• In March 2023, PLM Group partnered with PostProcess Technologies to expand its offerings and provide efficient, automated 3D print processing solutions that address challenges and enable scalability in the Nordic region.

Furthermore, advancements in generative AI have ushered in CAD providers to redevelop their traditional software by adopting artificial intelligence, allowing designers to create complex design concepts with minimal interference. The adoption of AI-driven technology can advance the drafting process by enabling designers to generate and improve designs based on specific parameters, such as size, weight, cost, or materials. For instance,

• In February 2024, polySpectra, a 3D printing materials producer, launched neThing.xyz, a new software. The neThing.xyz software aims to create 3D CAD models by leveraging generative AI design that is accessible to designers, engineers, and enthusiasts with a tool for new dimensions of digital models into physical reality.

Such product enhancements and technological advancements contribute toward digital transformation and propel market development in these regions.

RESTRAINING FACTORS

Complexity of Engineering Software and Lack of Standardization May Impede the Market Progress

CAD, PLM, PDM, and design quality software come with a variety of features and tools, and with various integrating technologies, the software becomes complex to use. The complexity of such software can be challenging to users, especially those who are new to using the software.

Several engineers and designers look for feature improvements that offer superior individual productivity as well as progress their engineering design procedure proficiency.

However, intricacy makes the software difficult to learn and use for new beginners or people who do not have enough time to learn or enough resources to invest in training. 

This complex software requires a high-end computer with high storage capacities and memory space. This makes the software less portable and compatible with low-power devices such as tablets and laptops.

With increased model complexity, the program needs more computer resources to operate properly. This could be a negligible error for users with high-performance systems, but the vast mainstream could result in the program crashing or interpreting the program as unusable.

Complexity makes the software less user-friendly due to the steep learning curve, increasing user difficulties. It also leads to generating more errors, which eventually costs a waste of resources and time as well as the potential of high-cost errors.

Such difficulties with less standardization require users to learn the software's operations and tools more thoroughly. Hence, enterprises need to spend an extra cost for the training of employees.

The complexity of such software leads to various issues, such as system difficulties in user operations, storage issues, high-cost errors, and others, thereby hampering overall software usage and development.

Engineering Software Market Segmentation Analysis

By Application Analysis

Rising Progress in Product Management Procedures to Fuel PLM Software Segment Growth

Based on application, the market is segmented into CAD, PDM, PLM, and design quality.

In 2023, the PLM segment accounted for the highest share in the market. This comes as the growing complexity of product portfolios significantly favors software adoption. The demand for constant progress in new product expansion and management procedures across various industries contributes toward software advancements. Moreover, the integration of digital twin concepts into PLM applications enables businesses to optimize designs, simulate and analyze product performance and predict maintenance requirements. In addition, cloud PLM allows real-time collaboration among teams by simplifying access to data, reducing infrastructure costs and optimizing operations across the entire product lifecycle.

By Deployment Analysis

Rising Implementation of Cloud-based Deployments with Enhanced Flexibility and Reduced Costs to Propel the Product Demand

Based on deployment, the market is bifurcated into cloud and on-premises.

The cloud segment accounts for the maximum market share and is expected to grow with the highest CAGR over the forecast period. The post-pandemic impact contributed to the faster adoption of cloud-based solutions across various sectors in the market. For instance, according to the industry experts’ report on cloud (Accenture), 36% of workloads in Europe have shifted to the cloud, whereas 31% of the workforce in the U.S. have moved to cloud-based solutions. Cloud-based solutions also aid enterprises in saving operating costs and increasing flexibility. Such growing adoption of cloud-based solutions has boosted the usage of cloud-based engineering software across different industries.

By Industry Analysis

Automotive Segment to Exhibit the Highest CAGR Owing to Presence of Sophisticated Global Production Network

Based on industry, the market is divided into automotive, aerospace and defense, manufacturing, healthcare, semiconductor and electronics, retail, and others.

The automotive segment is estimated to have the highest CAGR during the forecast period as the industry shows considerable growth potential across the U.S. and Western Europe. Further, the industry has a concentrated and sophisticated global network of production, joint ventures, cooperatives, and assembly plants, which creates various opportunities for advanced solutions in the market.

The manufacturing segment accounted for the highest engineering software market share in 2022, owing to increased technological infrastructure, economic shifts, and rising investments, eventually aiding new product inventions and maximizing profitability, margins, and quality standards in the sector.

The demand for this software also gains traction across other industries, such as semiconductor and electronics, automotive, and construction, among others, with its new modernizations and upgrades.

REGIONAL INSIGHTS

Geographically, the market has been studied across North America, South America, Europe, the Middle East & Africa, and Asia Pacific.

North America accounts for the maximum revenue share during the forecast period. Prominent players in the North America engineering software market are consistently advancing their modeling systems. The enhancement and expansion of the existing product portfolio uplifts the position of vendors in the region. Hence, key players are enhancing their solutions by engaging in innovations, partnerships, mergers, and acquisitions in the region. For instance,

• In July 2023, Oracle introduced Agile RUP (Release Update Packs), which included various advancements of Oracle Agile, containing Oracle PLM Framework types 9.3.5.0 and 9.3.6.0. These new versions allowed customers to plan and install them frequently to get the latest issues and not wait for yearly scheduled releases.

The report specifies that Asia Pacific will witness the highest CAGR during the forecast period. The augmented investment by government and private companies’ acceleration in AI and cloud adoption across Asia Pacific escalates the demand for these software solutions. Numerous initiatives, such as the Southeast Asian Manufacturing Alliance (SMA) and the Regional Comprehensive Economic Partnership (RCEP), associate businesses with trusted partners to navigate and progress the diverse Southeast Asian region positively. Such factors contribute to the growth of the engineering software market in the region.

Due to the presence of prominent players in Europe, such as Siemens, Dassault Systèmes, SAP SE, and Hexagon, among others, the region has seen substantial progress in the market. Industry 4.0, a national strategic initiative of the government and the Ministry for Economic Affairs and Energy (BMWI), highlights digitization, product interconnection, value chain, and business models. These factors are projected to increase different roles in smart manufacturing factories in the region.

The Middle East & Africa market is projected to showcase moderate progress during the forecast period. The increasing adoption of AI and IoT devices is anticipated to provide lucrative growth opportunities in the regional market. The region also has maximum adoption of this software across manufacturing and automotive, with increased technological infrastructure, economic shifts, and rising investments contributing to the rising demand for such software.

In South America, there is growing acceptance of digital technologies in both corporate and government sectors, such as healthcare, construction, manufacturing, and others. In the e-health sector, medical big data and AI are used to develop predictive models and new drugs. The adoption of cloud technology in various industry verticals is growing with the boom in the region. Governments in South America are investing in digitalization and encouraging companies worldwide to partner with enterprises across the region. All such factors aid the software demand in the region.

List of Key Companies in Engineering Software Market

Key Players Focus on Global Expansion to Strengthen their Market Positions

The key players of engineering software are keen on developing engineering solutions in numerous industries, such as manufacturing, retail, automotive, construction, semiconductors, and electronics. Securing funds to upgrade solutions with new technologies is one of the key approaches enterprises implement. Likewise, market players strategically form alliances and collaborate worldwide for global expansion.

List of Key Companies Profiled:

• Autodesk Inc. (U.S.)


• Dassault Systèmes (France)


• PTC (U.S.)


• Siemens Ltd. (Germany)


• SAP SE (Germany)


• Aras (U.S.)


• Centric Software, Inc. (U.S.)


• Oracle Corporation (U.S.)


• Hexagon AB (Sweden)


• ComplianceQuest (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• January 2024: Esri announced a partnership with Autodesk with the aim of integrating ArcGIS Living Atlas of the World layers and ArcGIS Basemaps into Autodesk's products. The ArcGIS Living Atlas of the World layers and ArcGIS Basemaps will be available in the Autodesk product suite to provide geospatial data from the foremost collection of global geographic information.


• December 2023: JSOL Corporation partnered with Hexagon's Manufacturing Intelligence division to develop the virtual prototype of electrified powertrains through multi-physics simulation. The partnership aims to offer global customers highly productive and accurate virtual prototypes of difficult electro-mechanical systems.


• December 2023: Aras and AVEVA, an industrial software company, collaborated with McDermott, a construction and engineering procurement company, to assess a new asset lifecycle management (ALM) and PLM tool for the oil & gas, energy, and nuclear divisions. The aim of testing the ALM software is to limit the risks and costs of the project's lifecycle by improving traceability, decision-making, and collaboration in an industrial environment.


• October 2023: PTC collaborated with Volkswagen Group to integrate PTC's Codebeamer, an application lifecycle management (ALM) solution, to adopt the software from the Volkswagen Group for the next-generation electric vehicles.


• October 2023: Autodesk acquired FlexSim, a simulation technology provider, by integrating FlexSim’s factory simulation technology with Autodesk’s factory design solutions and providing layout scenarios, in-depth model analysis, and process simulation to users that enable factory and logistics center operators to improve their processes. Through the acquisition, FlexSim will integrate Autodesk Fusion, which includes CAD, CAM, PLM, CAE, PCB design, and MES software, into a single, cloud-based solution.

REPORT COVERAGE

The report provides an in-depth analysis of the market and emphasizes key aspects such as product/service types, leading companies, and prominent applications of the product. Besides, the report offers insights into the market trends and highlights vital industry developments. In addition to the factors mentioned above, the report incorporates several factors that contributed to the market growth in recent years.

Report Scope & Segmentation

ATTRIBUTE	DETAILS
Study Period	2019-2032
Base Year	2023
Estimated Year	2024
Forecast Period	2024-2032
Historical Period	2019-2022
Growth Rate	CAGR of 10.2 % from 2024 to 2032
Unit	Value (USD Billion)
Segmentation	By Application CAD PDM PLM Design Quality By Deployment Cloud On-premises By Industry Automotive Aerospace and Defense Manufacturing Healthcare Semiconductor and Electronics Retail Others (Construction and Media and Entertainment) By Region North America (By Application, By Deployment, By Industry, and By Country) U.S. Canada Mexico Europe (By Application, By Deployment, By Industry, and By Country) U.K. Germany France Italy Spain Russia Benelux Nordics Rest of Europe Asia Pacific (By Application, By Deployment, By Industry, and By Country) China Japan India South Korea ASEAN Oceania Rest of Asia Pacific Middle East & Africa (By Application, By Deployment, By Industry, and By Country) Turkey Israel GCC North Africa South Africa Rest of MEA South America (By Application, By Deployment, By Industry, and By Country) Brazil Argentina Rest of South America