Engineering Software Market Size, Share & Trends Analysis Report By Component (Software, Services), By Deployment (Cloud, On-premises), By Application, By End-use, By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global engineering software market size was valued at USD 33.0 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 18.8% from 2023 to 2030. The market growth can be attributed to the increasing implementation of CAD and CAE software in various industries such as automotive, aerospace, construction, and healthcare, among others. Engineering software includes computer-aided engineering (CAE) software, computer-aided design (CAD) software, and computer-aided manufacturing (CAM) software, among others. The engineering software space is expected to grow considerably throughout the forecast period owing to numerous factors, such as growing pressure on manufacturers to reduce product development costs and time.

Furthermore, the increasing trend of engineering outsourcing, including computer-aided simulations for product testing, is anticipated to drive market demand over the forecast period. The significance of sophisticated engineering software, tools, automation, and digitization is being recognized by industries worldwide. By integrating engineering software, organizations can streamline their operations, automate repetitive tasks, and improve overall efficiency. As a result, errors are reduced, and accuracy is increased throughout the product lifecycle. Businesses that use these solutions more frequently save money by optimizing resource utilization and streamlining procedures.

The significance of sophisticated engineering software, tools, automation, and digitization is being recognized by industries worldwide. By integrating engineering software, organizations can streamline their operations, automate repetitive tasks, and improve overall efficiency. As a result, errors are reduced and accuracy is increased throughout the product lifecycle. Businesses that use these solutions more frequently save money by optimizing resource utilization and streamlining procedures.

The adoption of engineering software such as CAD, CAM, and CAE has been instrumental in meeting the demands of various industries, including automotive, aerospace, healthcare, and construction. These types of software offer customization, support remote work, and optimize designs for sustainability and resource efficiency. Technological advancements such as AI-driven design optimization expand the capabilities of these tools and attract new users, bolstering the market's expansion.

As companies seek efficient and innovative solutions to enhance productivity and reduce costs, engineering software is poised to continue driving growth by revolutionizing product development processes and fostering cross-industry collaboration. However, open-source software is expected to restrain the market's growth over the forecast period. This software is free online; however, the vendors charge for customization, support, and maintenance services.

Linux is one of the top providers of open architecture software. Open architecture software has been a boon for small-scale software providers, affecting the growth of large enterprises. The primary drivers of open-source platforms are the minor bugs and faults that can be tested and rectified instantly. On the other hand, it is difficult for a company to fix errors in a closed-source technology, owing to the limited set of developers and testers.

COVID-19 Impact on the Engineering Software Market

The global spread of the COVID-19 pandemic, starting from China, profoundly impacted industries worldwide, with lockdowns and workforce restrictions affecting industrial operations. Major engineering solutions markets such as the U.S., Canada, UK, Germany, France, Japan, and China were significantly impacted, leading to a decline in demand for engineering software in the automotive and industrial equipment sectors. Despite a history of consistent growth, the engineering software industry experienced a temporary setback in 2020 due to halted operations and decreased new orders.

However, with the transition to a remote work culture, software vendors offered support through discounts, trial extensions, and temporary free access to assist the shift of working models from office to home. For instance, in 2020, Hexagon AB’s manufacturing intelligence business division offered free offline licensing to manufacturing professionals to enable efficient working from home. The company offered free licensing and remote access options for numerous production, metrology, and MSC software range of CAE solutions.

Furthermore, Autodesk Inc. provided free access to its cloud collaboration products, such as Fusion 360 and BIM 360 Design, among others, to provide customers with improved flexibility in the changing work environment. With increasing sales growth from 2021, the market has expanded well, as enterprises adapt to new working methods and contribute to a positive growth trend from 2023 to 2030.

Component Insights

The software segment held the maximum revenue share of 70.2% in the market in 2022 and is anticipated to register the fastest CAGR of 19.1% over the forecast period. The software segment is further divided into computer-aided design (CAD), computer-aided manufacturing (CAM), and computer-aided engineering (CAE) software, among others.

Within the software segment, computer-aided design (CAD) software held the largest market share of 36.77% in 2022. CAD software is dominating the market due to benefits such as enhanced product development processes, cost and time savings, increased efficiency and accuracy, a wide range of applications, integration with PLM systems (Product Lifecycle Management), and ongoing technological advancements such as artificial intelligence (AI) and machine learning (ML).

In terms of components, the engineering software market is classified into software and services. The services segment is further bifurcated into development services and training, support & maintenance. In the service segment, the training, support & maintenance sub-segment is expected to expand at the fastest CAGR of 19.4% over the forecast period. The training, support, and maintenance service segment within the engineering software industry is poised for rapid expansion due to several compelling factors.

With the growing integration of sophisticated software solutions like CAD, CAE, and PLM across businesses, the demand for specialized training is surging. This training empowers engineers and professionals to unlock the software's full potential, resulting in heightened efficiency and innovation. Furthermore, as software technologies advance, the need for ongoing maintenance and dependable support becomes paramount. Companies ensure optimal software performance, mitigate risks, and sustain uninterrupted operations by investing in tailored training, responsive assistance, and consistent upkeep.

Deployment Insights

The cloud-based segment is anticipated to witness the highest CAGR of 20.1% over the forecast period. Cloud deployment offers exceptional scalability, allowing businesses to adjust their software resources according to project demands. This elasticity ensures efficient utilization of resources and avoids overprovisioning. Furthermore, cloud-based solutions eliminate the need for complex on-premises infrastructure, reducing capital expenditures and maintenance costs. Also, cloud technology aids seamless collaboration among geographically dispersed teams, streamlining design and development processes.

Based on deployment, the market has been segmented into cloud and on-premise. The on-premises segment held the higher market share of 54.3% in 2022. On-premises engineering software solutions offer greater control and data security, which is crucial for industries with sensitive intellectual property or strict regulatory compliance. Larger enterprises with established infrastructure often opt for on-premises deployments to leverage their existing resources. However, they face challenges related to maintenance, upgrades, and accessibility for remote teams. While cloud-based solutions flourish, on-premises systems still hold a significant share in industries where security, data control, and legacy integration are paramount.

Application Insights

The product design & testing segment dominated the overall market, gaining a share of 31.1% in 2022. The growth of the segment can be attributed to the pivotal role of this process in ensuring product quality, innovation, and time-to-market efficiency. Effective product design software allows companies to create and iterate on designs virtually, reducing the need for costly physical prototypes. This leads to accelerated product development cycles and better alignment with customer needs.

Robust testing solutions enable thorough analysis and validation of product performance, enhancing reliability and minimizing costly errors during the manufacturing phase. As companies prioritize delivering high-quality products while optimizing resources, the demand for product design and testing software continues to thrive. Based on application, the market has been segregated into design automation, product design & testing, plant design, drafting & 3D modeling, and others.

The drafting & 3D modeling segment is poised to register the fastest CAGR of 19.5% over the forecast period. The growth in demand for drafting & 3D modeling can be attributed to its integral role in modern industry design processes. This application enables engineers and designers to create detailed and realistic visual representations of their concepts, aiding in effective communication and collaboration. As industries like architecture, manufacturing, and automotive increasingly rely on immersive 3D models, the demand for robust drafting and modeling tools has surged. Architectural firms use 3D modeling software to present lifelike building designs to clients, while manufacturers use it to simulate product assembly processes, streamlining production and reducing errors.

For instance, Hou-tech, a Japanese manufacturer of storage systems and residential doors, faced challenges in designing intricate custom products while maintaining the efficiency of their standard designs. The company initially used Autodesk Inventor for complex custom products and AutoCAD LT for simpler designs. By integrating Inventor and utilizing the iLogic design automation technology, they streamlined their design process, leading to a 20% reduction in overall process time and improved capabilities in creating unique products based on existing standards.

End-use Insights

The automotive segment dominated the overall market, gaining a share of 30.2% in 2022. The growth of the automotive segment can be attributed to the increasing demand for advanced design, simulation, and optimization tools to develop innovative vehicles, enhance performance, and ensure regulatory compliance. The automotive sector heavily relies on advanced engineering tools and solutions for various stages of product development, from design to manufacturing and testing. The increasing demand for innovative vehicle designs, improved safety features, and enhanced performance drives the need for sophisticated Computer-Aided Design (CAD), Computer-Aided Manufacturing (CAM), and Computer-Aided Engineering (CAE) solutions.

Additionally, the competitive nature of the automotive industry necessitates rapid prototyping and simulation to accelerate time-to-market. Furthermore, the shift towards electric and autonomous vehicles requires intricate engineering simulations, positioning the automotive sector as a significant contributor to the growth of the market. Based on end-use, the market has been segregated intoautomotive; aerospace & defense; electronics; medical devices; architecture, engineering, and construction (AEC); and others.

The aerospace & defense segment is expected to register the fastest CAGR of 19.6% over the forecast period. The increasing complexity of aerospace systems and the need for precise design, analysis, and simulation tools drive the demand for advanced engineering software solutions in this sector. The objective of improved performance, safety, and efficiency in aircraft and defense systems necessitates the utilization of cutting-edge software for design optimization and validation.

Additionally, stringent regulations and standards in the aerospace and defense industry compel companies to adopt robust software tools that ensure compliance while accelerating the development timeline. Furthermore, the trend towards digital transformation and Industry 4.0 practices in this sector further fuels the adoption of engineering software for streamlined collaboration, data-driven decision-making, and overall operational excellence.

Regional Insights

North America dominated the overall market with a revenue share of 33.1% in 2022. The region has prominent market players such as Altair Engineering, Inc., ANSYS, Inc., Autodesk, Inc., and Bentley Systems, Inc., among others. The region is home to a robust and mature industrial landscape, including aerospace, automotive, and electronics sectors, which heavily rely on advanced engineering solutions for design, simulation, and analysis. Secondly, strong research and development activities and a culture of innovation in the region drive the demand for cutting-edge solutions in engineering processes.

For instance, in August 2022, RoboDK and BobCAD-CAM collaborated to launch a plugin that enabled machinists to program robots rapidly and easily for machining applications. With the help of this new tool, robot machining became more practical for machinists, ushering in a flexible machining era for various businesses. Additionally, North America's emphasis on technological advancements and its early adoption of Industry 4.0 principles have led to a higher adoption rate of CAD, CAM, and CAE solutions among companies seeking to enhance productivity and stay competitive.

The Asia Pacific regional market is expected to witness the highest CAGR of 19.4% over the projected period. Rapid industrialization and urbanization in countries such as China and India are driving the demand for engineering solutions across various sectors in the Asia Pacific. The increasing investments in infrastructure projects, such as transportation, energy, and construction, propel the need for advanced engineering solutions. Additionally, the growing focus on technological innovations and digital transformation in manufacturing, aerospace, and automotive industries is fueling the adoption of CAD, CAM, and CAE software in the region.

For instance, in September 2021, India’s National Aerospace Laboratories (NAL), a member of the Council of Scientific and Industrial Research (CSIR), worked with Dassault Systèmes to use the latter's 3DEXPERIENCE platform for designing civil aircraft in the nation. Moreover, NAL uses DraftSight, a fully featured 2D and 3D CAD system from Dassault Systèmes, for standardizing 2D design in civil aircraft production. NAL has increased its use of technology products from Dassault Systèmes by embracing these solutions and substituting DraftSight for outdated 2D CAD tools.

Key Companies & Market Share Insights

The market is competitive and is characterized by the presence of various major players. These players are adopting strategies such as partnerships and collaborations to gain a competitive edge. For instance, in February 2022, Dassault Systèmes announced its partnership with Cadence Design Systems, Inc. The companies have integrated the 3DEXPERIENCE platform from Dassault Systèmes with the Cadence Allegro platform. This combined solution empowers companies to excel in multidisciplinary modeling, simulation, and optimization of intricate and interconnected electronic systems.

Through this innovative approach, businesses can expedite their entire system development lifecycle while refining their designs to achieve heightened performance, dependability, manufacturability, supply robustness, adherence to regulations, and cost efficiency.Some of the prominent players in the global engineering software market include:

• Altair Engineering, Inc.

• ANSYS, Inc.

• Autodesk, Inc.

• Bentley Systems, Inc.

• Dassault Systèmes, Inc.

• ESI Group

• Siemens

• 3D Systems Inc.

• PTC

• Mastercam

• Hexagon AB

• ZWSOFT CO., LTD.

Engineering Software Market Report Scope

Global Engineering Software Market Report Segmentation

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2017 to 2030. For the purpose of this study, Grand View Research has segmented the global engineering software market report based on component, deployment, application, end-use, and region:

• Component Outlook (Revenue, USD Million, 2017 - 2030)

  • Software

    • Computer-Aided Design (CAD) Software

    • Computer-Aided Manufacturing (CAM) Software

    • Computer-Aided Engineering (CAE) Software

    • Others

  • Services

    • Development Service

    • Training, Support & Maintenance

• Deployment Outlook (Revenue, USD Million, 2017 - 2030)

  • Cloud

  • On-premises

• Application Outlook (Revenue, USD Million, 2017 - 2030)

  • Design Automation

  • Product Design & Testing

  • Plant Design

  • Drafting & 3D Modeling

  • Others

• End-use Outlook (Revenue, USD Million, 2017 - 2030)

  • Automotive

  • Aerospace & Defense

  • Electronics

  • Medical Devices

  • Architecture, Engineering, and Construction (AEC)

  • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • UK

    • Germany

    • France

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

    • Australia

  • Latin America

    • Brazil

    • Mexico

  • Middle East and Africa (MEA)

    • Kingdom of Saudi Arabia (KSA)

    • UAE

    • South Africa