The global engineering software market is expected to reach an estimated $79.4 billion by 2031 with a CAGR of 10.8% from 2025 to 2031. The major drivers for this market are the rapid digitization among industries, rising preference for SaaS-based cloud engineering software, and growing adoption of remote work culture in enterprises.
The future of the global engineering software market looks promising with opportunities in the automotive, aerospace & defense, electronic, medical device, and architecture, engineering, and construction (AEC) sectors.
Q.2. Which segments will grow at a faster pace and why?
Q.3. Which region will grow at a faster pace and why?
Q.4. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.5. What are the business risks and competitive threats in this market?
Q.6. What are the emerging trends in this market and the reasons behind them?
Q.7. What are some of the changing demands of customers in the market?
Q.8. What are the new developments in the market? Which companies are leading these developments?
Q.9. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.10. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.11. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
The future of the global engineering software market looks promising with opportunities in the automotive, aerospace & defense, electronic, medical device, and architecture, engineering, and construction (AEC) sectors.
- Within the application category, product design & testing will remain the largest segment over the forecast period due to its rising usage among companies to ensure product quality, innovation, and time-to-market efficiency.
- Within the end-use category, automotive will remain the largest segment due to the increasing need for engineering software in this sector to fabricate advanced design, simulation, and optimization tools for developing innovative vehicles.
- In terms of regions, North America is expected to witness the highest growth over the forecast period due to the continuous expansion of Industry 4.0 and the presence of key players in the region.
Emerging Trends in the Engineering Software Market
The engineering software market is developing around a set of emerging trends that drive technological innovation and business growth. The five key trends are:- Cloud Solutions: The shift to cloud engineering software has increased collaboration and scalability. Cloud platforms facilitate real-time access and sharing of data for project management, reducing IT infrastructure costs in the process.
- Integration of AI and Machine Learning: Engineering software is incorporating AI and machine learning into designs to enhance predictive analytics and automation. These technologies support design optimization, predict maintenance needs, and improve overall efficiency.
- Digital Twins and Simulation: The use of digital twins is rapidly gaining traction with highly advanced simulation tools. This creates virtual models of physical systems, enabling better testing, analysis, and optimization of engineering processes before physical execution.
- IoT Integration: IoT technologies are integrally part of engineering software development. An IoT-enabled system offers real-time monitoring and data gathering, enhancing decision-making and operational efficiency across various engineering applications.
- Cybersecurity: As the networking of engineering software improves, greater focus is placed on cybersecurity. The need to protect sensitive data and systems from cyber threats acts as a bolstering factor for advanced security features and protocols.
Recent Developments in the Engineering Software Market
Recent developments in the engineering software market epitomize the significant strides taken toward technological advancement and changing industry requirements. The five major developments are:- Artificial Intelligence-driven Design Tools: Advanced engineering software employs AI algorithms to enhance design capabilities. These tools perform with greater precision and speed up complex design tasks through automation and predictive analysis, facilitating acceleration in the design cycle.
- Cloud-Based Platforms: The rise of cloud-based engineering software is transforming how teams collaborate and manage projects. These platforms offer flexible access to tools and data, facilitating remote work and real-time collaboration among global teams.
- Advanced Simulation Technologies: Significant developments have occurred in sophisticated simulation technologies that allow for detailed and precise modeling of engineering processes. These tools help engineers predict performance and optimize designs before physical testing.
- IoT Integration: Most modern engineering software integrates with IoT technologies for real-time monitoring and analysis. This enhances decision-making and process optimization through live data and insights.
- Advanced Security Features: In an era of increased data security concerns, recently developed engineering software incorporates enhanced security features to counter cyber threats. Improvements in this respect ensure that sensitive information remains safe and compliant with regulatory standards.
Strategic Growth Opportunities for Engineering Software Market
There are numerous strategic growth opportunities presented by the engineering software market across key applications. Five key opportunities are:- Automation of Manufacturing: Manufacturing automation represents one of the biggest opportunities for engineering software development. Advanced software solutions can enhance production processes, quality control, and overall efficiency in manufacturing.
- Infrastructure Development: Increasing demand for smart infrastructure and urban development creates opportunities for engineering software that can support large-scale infrastructure projects in planning, simulation, and management, including smart city planning and management software.
- Optimizing Energy Sectors: Engineering software solutions targeting the energy sector and renewable energy projects provide avenues for growth. These solutions contribute to optimizing energy production, resource management, and establishing sustainable energy systems.
- Automotive Innovations: The automotive industry is heavily focused on electric and autonomous vehicles, creating demand for engineering software that addresses advanced design, simulation, and testing needs. Innovations in this area can lead to growth in automotive engineering software applications.
- Healthcare Engineering Solutions: The adoption of engineering software applications in healthcare is growing, especially in the design and simulation of medical devices. This opportunity arises from the emerging demand for innovative engineering solutions in medical technologies and equipment.
Engineering Software Market Drivers and Challenges
The engineering software market is influenced by technological, economic, and regulatory factors. An overview of key drivers and challenges is outlined below.The factors driving the engineering software market include:
- Technological Advancements: Innovations in AI, machine learning, and cloud computing continue to enhance the functionality of engineering software. These developments are viewed as catalysts for market growth due to increasingly advanced and effective solutions for design and analysis.
- Automation Demand: With the rising demand for automation in industries, engineering software is increasingly required to support automated processes, enhancing efficiency. Modern engineering practices heavily rely on automation technologies.
- Smart Infrastructure Growth: The development of smart cities and infrastructures continuously creates demand for advanced engineering software to support planning, simulation, and management activities.
- Globalization and Remote Collaboration: Growing demand for global collaborations and remote work enforces the use of cloud-based engineering software. These solutions facilitate real-time data sharing and management across distributed teams.
Challenges in the engineering software market include:
- High Costs of Development: Advanced engineering software is costly to develop and may be unaffordable for small companies. There is a pressing need to balance innovation with cost-effectiveness.
- Complexities in Integration: Integrating new engineering software into existing systems and workflows can be challenging. Compatibility and seamless operation are vital for successful adoption and implementation.
- Cybersecurity Risks: As engineering software becomes increasingly interconnected, the risk of cyber threats grows. Sensitive data and systems require significant investment in cybersecurity measures to protect against breaches.
List of Engineering Software Companies
Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies engineering software companies cater increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base.Some of the engineering software companies profiled in this report include:
- Altair Engineering
- ANSYS
- Autodesk
- Bentley Systems
- Dassault Systèmes
- ESI
- Siemens
- 3D Systems
- PTC
- Mastercam
Engineering Software by Segment
The study includes a forecast for the global engineering software market by component, deployment mode, application, end use industry, and region.Component [Analysis by Value from 2019 to 2031]:
- Software
- Services
Deployment Mode [Analysis by Value from 2019 to 2031]:
- Cloud
- On-Premises
Application [Analysis by Value from 2019 to 2031]:
- Design Automation
- Product Design & Testing
- Plant Design
- Drafting & 3D Modeling
- Others
End Use Industry [Analysis by Value from 2019 to 2031]:
- Automotive
- Aerospace & Defense
- Electronics
- Medical Devices
- Architecture, Engineering, and Construction
- Others
Region [Analysis by Value from 2019 to 2031]:
- North America
- Europe
- Asia Pacific
- The Rest of the World
Country-Wise Outlook for the Engineering Software Market
The market for engineering software has recently developed rapidly, driven by technological advancements and significant demands from various sectors. The United States, China, Germany, India, and Japan have witnessed the emergence of more integrated, efficient, and scalable software. Below is a synopsis of the key changes observed in each country:- United States: The US leads in integrating AI and machine learning into engineering software, providing a strong boost to predictive analytics and automation. Recent developments focus on enhancing software interoperability and cloud-based solutions to simplify engineering processes across various sectors.
- China: China's engineering software market has experienced widespread growth as the country invests heavily in local development and customization. There is a strong emphasis on enabling modern technologies, such as IoT and big data analytics, to fast-track industrialization and infrastructure projects.
- Germany: Germany continues to develop engineering software focused on Industry 4.0, including improvements in simulation capabilities and the integration of digital twins for superior precision and efficiency in manufacturing and engineering processes, reflecting the country's commitment to innovation.
- India: The Indian market is developing affordable and scalable engineering software solutions. Recent developments include the adoption of cloud-based platforms and open-source tools, enhancing access to sophisticated engineering software for various industries and businesses.
- Japan: Japan focuses on developing more integrated and precise engineering software. New features and functionalities sufficiently support robotics and automation, aligning with Japan's high-tech manufacturing and smart infrastructure development goals.
Features of this Global Engineering Software Market Report
- Market Size Estimates: Engineering software market size estimation in terms of value ($B).
- Trend and Forecast Analysis: Market trends (2019 to 2024) and forecast (2025 to 2031) by various segments and regions.
- Segmentation Analysis: Engineering software market size by various segments, such as by component, deployment mode, application, end use industry, and region in terms of value ($B).
- Regional Analysis: Engineering software market breakdown by North America, Europe, Asia Pacific, and Rest of the World.
- Growth Opportunities: Analysis of growth opportunities in different components, deployment modes, applications, end use industries, and regions for the engineering software market.
- Strategic Analysis: This includes M&A, new product development, and competitive landscape of the engineering software market.
- Analysis of competitive intensity of the industry based on Porter’s Five Forces model.
This report answers the following 11 key questions:
Q.1. What are some of the most promising, high-growth opportunities for the engineering software market by component (software and services), deployment mode (cloud and on-premises), application (design automation, product design & testing, plant design, drafting & 3D modeling, and others), end use industry (automotive, aerospace & defense, electronics, medical devices, architecture, engineering, and construction, and others), and region (North America, Europe, Asia Pacific, and the Rest of the World)?Q.2. Which segments will grow at a faster pace and why?
Q.3. Which region will grow at a faster pace and why?
Q.4. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.5. What are the business risks and competitive threats in this market?
Q.6. What are the emerging trends in this market and the reasons behind them?
Q.7. What are some of the changing demands of customers in the market?
Q.8. What are the new developments in the market? Which companies are leading these developments?
Q.9. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.10. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.11. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
Table of Contents
1. Executive Summary
2. Global Engineering Software Market: Market Dynamics
3. Market Trends and Forecast Analysis from 2019 to 2031
4. Market Trends and Forecast Analysis by Region from 2019 to 2031
5. Competitor Analysis
6. Growth Opportunities and Strategic Analysis
7. Company Profiles of Leading Players
Companies Mentioned
The leading players profiled in this Engineering Software market report include:- Altair Engineering
- ANSYS
- Autodesk
- Bentley Systems
- Dassault Systèmes
- ESI
- Siemens
- 3D Systems
- PTC
- Mastercam
Methodology
The analyst has been in the business of market research and management consulting since 2000 and has published over 600 market intelligence reports in various markets/applications and served over 1,000 clients worldwide. Each study is a culmination of four months of full-time effort performed by the analyst team. The analysts used the following sources for the creation and completion of this valuable report:
- In-depth interviews of the major players in the market
- Detailed secondary research from competitors’ financial statements and published data
- Extensive searches of published works, market, and database information pertaining to industry news, company press releases, and customer intentions
- A compilation of the experiences, judgments, and insights of professionals, who have analyzed and tracked the market over the years.
Extensive research and interviews are conducted in the supply chain of the market to estimate market share, market size, trends, drivers, challenges and forecasts.
Thus, the analyst compiles vast amounts of data from numerous sources, validates the integrity of that data, and performs a comprehensive analysis. The analyst then organizes the data, its findings, and insights into a concise report designed to support the strategic decision-making process.
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