Engineering Software Market Size & Share 2023 to 2032
Market Size by Component (Software, Service), by Deployment Model (Cloud, On-premises), by Application (Design Automation, Product Design & Testing, Plant Design, Drafting & 3D Modeling, Others), by End User.
Report ID: GMI6791
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Published Date: September 2023
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Report Format: PDF
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Authors:
Preeti Wadhwani, Aishvarya Ambekar
Engineering Software Market Size
Engineering Software Market size was valued at USD 28.9 billion in 2022 and is projected to register a CAGR of over 18% between 2023 and 2032. The increasing complexity of engineering projects, driven by globalization & stringent regulations, is a significant driver of the market.
Engineering Software Market Key Takeaways
Market Size & Growth
Key Market Drivers
Challenges
Modern projects demand sophisticated design, simulation, and analysis tools to meet industry-specific requirements. These software solutions enable engineers to navigate intricate challenges efficiently, reduce errors, and accelerate product development. As industries evolve, the demand for cutting-edge engineering software continues to rise, ensuring that companies can stay competitive and innovative in today's fast-paced technological landscape.
The adoption of cloud-based engineering software is reshaping the industry as it offers flexibility, scalability, and enhanced collaboration capabilities. With the increasing trend toward remote work & global collaboration, cloud solutions enable engineers to access & share critical data and models seamlessly. They also provide efficient resource management and lower upfront infrastructure costs. As companies seek agility and remote accessibility, cloud-based engineering software has become a cornerstone in supporting modern engineering practices, accelerating project timelines, and reducing operational bottlenecks.
High costs associated with engineering software can hinder engineering software market growth, especially for smaller businesses. These expenses encompass initial procurement costs, ongoing licensing fees, and the need for hardware upgrades. Additionally, the complexity of certain software tools necessitates substantial training investments. Consequently, Small & Medium-sized Enterprises (SME) may face barriers to adoption. Overcoming this challenge may require more cost-effective licensing models, cloud-based solutions, and educational initiatives to ensure that SME can effectively access & leverage advanced engineering software.
COVID-19 Impact
The COVID-19 pandemic has had some positive impacts on the engineering software market. With remote work becoming the norm, there has been a greater reliance on digital tools for collaboration and project management, which has driven the adoption of engineering software. Companies have also accelerated their digital transformation efforts, realizing the importance of advanced software solutions to maintain productivity & competitiveness. This has created opportunities for software providers, leading to increased demand.
Engineering Software Market Trends
The integration of AI into engineering software is catalyzing lucrative growth in the market. AI enhances productivity by automating tasks, optimizing designs, and analyzing vast datasets. This streamlines engineering processes, reduces errors, and accelerates product development. For instance, in September 2023, SimScale GmbH introduced its fully integrated, cloud-native AI-powered physics prediction feature. SimScale collaborated with NAVASTO, a top A.I. developer in accelerated engineering, to seamlessly incorporate its solutions into the SimScale platform. This integration empowers engineers to engage in real-time design by concurrently leveraging physics & AI-derived analysis results. With industries increasingly embracing AI-driven solutions, the demand for advanced engineering software continues to surge, driving substantial market expansion & innovations.
Engineering Software Market Analysis
Based on component, the engineering software market is divided into software and service. The software segment held around USD 23.5 billion in market revenue in 2022. The constant improvements and innovations in manufacturing software are driving the software segment expansion. These advancements empower manufacturers to optimize production processes, reduce costs, and enhance the product quality. For instance, in May 2023, nTop, an engineering design software firm based in the U.S., unveiled its most recent release, nTop 4 Additive Manufacturing software. This significant update is said to expand on nTop's foundational technologies, bringing forth fresh features centered around four core themes: design, integration, scalability, and adoption. Enhanced software also facilitates better integration with various 3D printing hardware & materials. As a result, companies can achieve cost-efficiency & innovations in their manufacturing processes, fostering the expansion of the additive manufacturing software market within the broader engineering software landscape.
Based on application, the engineering software market is categorized into design automation, product design & testing, plant design, drafting & 3D modelling, and others. The product design & testing segment accounted for around USD 11.1 billion in market revenue in 2022 and is projected to grow by 2032. The need for cost reduction is boosting the industry demand. These tools allow engineers to create and test virtual prototypes, minimizing the need for costly physical prototypes. By simulating and analyzing product performance digitally, companies save on materials, manufacturing, and testing expenses. This reduces production costs and shortens development cycles, contributing to the overall cost-efficiency and improved competitiveness in a highly dynamic business landscape.
North America led the engineering software market with a major share of over 30% in 2022. Acquisitions aimed at portfolio enhancement in the U.S. are propelling the North America market progress. Companies in the U.S. are strategically acquiring innovative software providers to broaden their offerings and cater to diverse engineering needs. For instance, in January 2023, Ansys, a pioneer in engineering simulation software, announced its acquisition of Engineering Simulation Software, Rocky DEM. This addition of Rocky DEM to Ansys' portfolio will assist engineers in tackling intricate design challenges associated with discrete solids featuring complex multi-physics interactions. Furthermore, the acquisitions facilitate access to cutting-edge technologies & expertise, empowering engineers to tackle complex challenges and drive innovations, thereby bolstering the market in North America.
Engineering Software Market Share
Major players operating in the engineering software market are
Engineering Software Industry News:
The engineering software market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2018 to 2032, for the following segments:
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By Deployment, 2018 – 2032
By Application, 2018 – 2032
By End User, 2018 – 2032
The above information is provided for the following regions and countries:
Research methodology, data sources & validation process
This report draws on a structured research process built around direct industry conversations, proprietary modelling, and rigorous cross-validation and not just desk research.
Our 6-step research process
1. Research design & analyst oversight
At GMI, our research methodology is built on a foundation of human expertise, rigorous validation, and complete transparency. Every insight, trend analysis, and forecast in our reports is developed by experienced analysts who understand the nuances of your market.
Our approach integrates extensive primary research through direct engagement with industry participants and experts, complemented by comprehensive secondary research from verified global sources. We apply quantified impact analysis to deliver dependable forecasts, while maintaining complete traceability from original data sources to final insights.
2. Primary research
Primary research forms the backbone of our methodology, contributing nearly 80% to overall insights. It involves direct engagement with industry participants to ensure accuracy and depth in analysis. Our structured interview program covers regional and global markets, with inputs from C-suite executives, directors, and subject matter experts. These interactions provide strategic, operational, and technical perspectives, enabling well-rounded insights and reliable market forecasts.
3. Data mining & market analysis
Data mining is a key part of our research process, contributing nearly 20% to the overall methodology. It involves analysing market structure, identifying industry trends, and assessing macroeconomic factors through revenue share analysis of major players. Relevant data is collected from both paid and unpaid sources to build a reliable database. This information is then integrated to support primary research and market sizing, with validation from key stakeholders such as distributors, manufacturers, and associations.
4. Market sizing
Our market sizing is built on a bottom-up approach, starting with company revenue data gathered directly through primary interviews, alongside production volume figures from manufacturers and installation or deployment statistics. These inputs are then pieced together across regional markets to arrive at a global estimate that stays grounded in actual industry activity.
5. Forecast model & key assumptions
Every forecast includes explicit documentation of:
✓ Key growth drivers and their assumed impact
✓ Restraining factors and mitigation scenarios
✓ Regulatory assumptions and policy change risk
✓ Technology adoption curve parameter
✓ Macroeconomic assumptions (GDP growth, inflation, currency)
✓ Competitive dynamics and market entry/exit expectations
6. Validation & quality assurance
The final stages involve human validation, where domain experts manually review filtered data to identify nuances and contextual errors that automated systems might miss. This expert review adds a critical layer of quality assurance, ensuring data aligns with research objectives and domain-specific standards.
Our triple-layer validation process ensures maximum data reliability:
✓ Statistical Validation
✓ Expert Validation
✓ Market Reality Check
Trust & credibility
Verified data sources
Trade publications
Security & defense sector journals and trade press
Industry databases
Proprietary and third-party market databases
Regulatory filings
Government procurement records and policy documents
Academic research
University studies and specialist institution reports
Company reports
Annual reports, investor presentations, and filings
Expert interviews
C-suite, procurement leads, and technical specialists
GMI archive
13,000+ published studies across 30+ industry verticals
Trade data
Import/export volumes, HS codes, and customs records
Parameters studied & evaluated
Every data point in this report is validated through primary interviews, true bottom-up modelling, and rigorous cross-checks. Read about our research process →