Global Industrial Software Market: Analysis By Platform, End User, Region Size, Trends and Forecast up to 2029

Industrial software is a collection of application programs, processes, methods, and functions that can help with data collection, manipulation, and management on a large scale. Industrial software is used in a variety of industries, including operations, manufacturing, design, construction, mining, textile mills, chemicals, food processing, and service providers. Industrial software is used to manage the overall industrial process. The global industrial software market was valued at US$110.52 billion in 2023 and is expected to be worth US$189.68 billion by 2029.

The global industrial software market has been positively growing over the period as a result of positive shift towards automation, rising adoption of smart manufacturing practices, rapid industrialization in emerging economies, growing demand for qualitative & reliable manufacturing, increased need for mass production with reduced operation costs, emergence of Industry 4.0 technologies, and increasing complexity of industrial operations across various end user industries. Also, factors like rising acceptance of cloud-based industrial software solutions, growing emphasis on cybersecurity, emergence of digital twins, and growing demand for predictive analytics and AI-based solutions will continue to boost the growth of global industrial software market in the forecasted period. The market is expected to grow at a CAGR of 9.42 % over the projected period of 2024-2029.

Market Segmentation Analysis:

By Platform: The report provides the bifurcation of the global industrial software market into two segments on the basis of platform: on premise and cloud. The on premise segment held the highest share in the market. The increasing concern over security and the problem of transferring data in the cloud, especially when companies are dealing with big data are the contributing factors supporting the on-premise industrial software market growth. On the other hand, cloud segment is expected to be the fastest growing segment in the forecasted period. Factors such as need for agility and flexibility, real time information and customer behavior have supported the growth of the market in the past few years. Most of the industrial software and solutions are going cloud-based as they cost less and are easy to manage. Moreover, a cloud-based industrial software allows the user to access data from any device. These benefits would surge the adoption of cloud-based platform in the industrial software market.

By End User: The report has segmented the global industrial software market into eight end users, namely, BFSI, IT & telecom, manufacturing, government, healthcare, retail, aerospace & defense and others. BFSI segment held the highest share in the market in 2023. BFSI software serves as a means of communication between a bank and a user. Its purpose is to improve the workflow within the company and its branches, to facilitate investment policies, and to provide services that meet the needs of the users. Easy data access, digital banking, and fintech startups are driving the growth of the BFSI industrial software market. In addition, others industrial software market is expected to be fastest growing segment of the market. The primary goal of educational software development is to improve the learning experience of students while also improving training for administrators, educators, and anyone else involved in the school management process. The numerous benefits associated with industrial software such as efficiency, scale and low cost, could bring in more transparency, visibility & cost efficiency to advertising agencies in advertising and design sector.

By Region: The report provides insight into the global industrial software market based on regions namely, North America, Europe, Asia Pacific, and rest of the world. North America held the dominant share in the global industrial software market in 2023. Due to the increasing adoption of electronic health record, cloud services and presence of advanced healthcare facilities and IT companies, North America market has witnessed a significant increase in the adoption of industrial software solutions. Furthermore, North America is occupied with leading industrial software market players, who continue to drive innovation in their software solutions by introducing new features. Due to the rising trend of automation and increasing deployment of industrial robots, the need of industrial software to manage complex operations is rising and thereby is likely to propel the growth of the industrial software market in North America in coming years.

Asia pacific is the fastest growing region of the global industrial software market, driven by an increase in demand for operational efficiency and transparency in business processes, the adoption of cloud and mobile applications, and an increase in demand for data-driven decision-making. Factors such as increased emphasis on improving process efficiencies and lowering production costs across various industry verticals is expected to continue to augment market growth in the forecasted period. China remains the largest market in the Asia Pacific. China's society and economy have been transformed by dramatic expansions in manufacturing capabilities and rising consumer consumption. China is a major producer of industrial and consumer goods in the world. China’s robust manufacturing sector, which is one of the largest in the world, continues to expand and upgrade. The need for automation, efficiency, and innovation in manufacturing processes drives the demand for industrial software solutions such as MES, PLM, and ERP.

Market Dynamics:

Growth Drivers: The global industrial software market has been rapidly growing over the past few years, due to factors such as surging adoption of industrial cloud computing technology, rapid installations of industrial robots, growing IT Spending, rise of industry 4.0 and 5.0 technologies, increased need to improve operational efficiency, etc. The deployment of industrial robots necessitates sophisticated programming software to define and control their operations. Industrial robots generate vast amounts of data related to their performance, which needs to be monitored in real-time. Software solutions for data analytics and monitoring are essential to track efficiency, detect anomalies, and prevent downtime. Therefore, rapid installation of industrial robots is driving the demand for a wide range of industrial software solutions, needed for programming and control to integration, monitoring, optimization, safety, and compliance. In addition, industrial software provides tools for detailed production planning and scheduling, ensuring that resources are used efficiently and production goals are met on time. Furthermore, advanced analytics capabilities in industrial software allow companies to predict trends, identify potential issues, and take proactive measures to optimize operations.

Challenges: However, the global industrial software market growth would be negatively impacted by various challenges such as, problem of cyber security, high installation and maintenance cost of industrial software, etc. Industrial software systems are often targets for cybercriminals looking to steal sensitive data, including intellectual property, operational data, and personal information. The fear of data breaches can deter companies from adopting industrial software solutions.

Trends: The global industrial software market is projected to grow at a fast pace during the forecasted period, due to integration of artificial intelligence (AI) and machine learning (ML), increasing adoption of industrial internet of things (IIoT), rising implementation of digital twin, ongoing integration of industrial software such as MES with ERP and PLM solutions, etc. Increasing integration of AI and ML technologies into industrial software solutions enables enhanced operational efficiency, improved process optimization, increased automation, advanced data analytics, and better data management & security. Also, by leveraging IIoT technologies, industries can achieve predictive maintenance, real-time monitoring, and automation of processes, which results in substantial cost savings and increased productivity. IIoT and edge computing solutions aid in the simplification of device management and shop floor software throughout the lifecycle.

Impact Analysis of COVID-19 and Way Forward:

COVID-19 brought in many changes in the world in terms of reduced productivity, loss of life, business closures, closing down of factories and organizations, and shift to an online mode of work. Government-imposed factory and plant closures, as well as travel restrictions, had a significant impact on manufacturing facilities and other industries. Raw material shortages, labor shortages, and supply chain disruptions all harmed production volumes. The COVID-19 pandemic had a negative impact on industrial automated solutions manufacturing facilities around the world, resulting in low production volumes. Furthermore, demand for industrial software fell precipitously as a result of the temporary closure of end-use manufacturing and other retail outlets.

Competitive Landscape:

The global industrial software market is moderately fragmented. Those with significant exposure to these aforementioned segments like cloud infrastructure and services, cybersecurity, and data analytics would continue to gain a larger share of the overall industrial software spend as more businesses digitize and modernize their software infrastructure. The key players of the market are:

• IBM Corporation
• Microsoft Corporation
• Oracle Corporation
• Salesforce Inc.
• SAP
• Siemens AG (Siemens Digital Industries Software)
• ABB Group
• Honeywell International Inc.
• Dassault Systèmes SE
• Amazon.Com, Inc. (Amazon Web Services, Inc.)
• Cadence Design Systems, Inc.
• Synopsys Inc.

Technological advances, new easily accessible software solutions, and increasing trend of automation and robotics are creating higher opportunities for new market entrants in the industrial software market. For instance, on June 18, 2024, Salesforce announced LLM benchmark for CRM to help businesses evaluate the rapidly growing number of large language models (LLMs) for use in their customer relationship management (CRM) systems. The new benchmark is a comprehensive evaluation framework that measures the performance of LLMs against four key measures: accuracy, cost, speed, and trust and safety.