The global simulation software market generated revenue of $9,601.8 million in 2020 and is expected to reach $20,276.7 million by 2025 at a CAGR of 15.3%.
Increasing demand for effective solutions to reduce production and training costs and increasing capabilities of simulation software toward advanced technologies such as AR/VR, digital twins, and 3D printing are fueling the growth of the simulation software market.
Global Simulation Software Market by End User
The design engineer category held the major share in the global simulation software market in 2020. Design engineers are responsible for defining the product to meet target requirements, including performance and cost of products. They use simulation software design-to-cost/design-for-manufacturing (DTC/DFM) insights to achieve target product cost and ease of manufacture. High usage of these software in designing products is a major factor resulting in the domination of this category in the market.
Global Simulation Software Market by Organization Size
A large organization with revenue in the range of $1-$5 billion is the dominant category in the market. A large number of companies in this category, coupled with high research and development (R&D) investment and high information technology (IT) budget, is the major factor driving the growth of this category. However, micro and very small companies are expected to be the fastest-growing category during the forecast period, growing at a CAGR of 17.1% and 16.5%, respectively.
Global Simulation Software Market by Industry Vertical
Industrial equipment is the most dominant vertical for the adoption of simulation software, holding a 35.4% share in 2020. Many companies in the industrial equipment sector, high cost of goods sold (COGS), high IT budget, and high expenses in R&D activities are the major factors for the domination of this category in the market.
Global Simulation Software Market by Deployment
On-premise deployment of simulation software is the most dominant vertical for the adoption of simulation software, holding a 35.4% share in 2020. However, several large enterprises have moved or shown intent to move toward a cloud-based infrastructure that involves supply chain collaboration.
The current situation represents the accessibility of software being limited to senior designations and not to every employee that works in a relevant department. The ease and low cost of such a system is the major reason for the growth of this category in the market.
Global Simulation Software Market by Component
Simulation software is an important component of a computer-aided design (CAD) process. It helps product designers to optimize, evaluate, and compare product designs and prototypes by modeling events in a real-world simulated environment. This software creates a model governed by mathematical data and equations and place it in a pre-defined system.
The original equipment manufacturers (OEMs) and vendors integrate simulation software with digital additive manufacturing and networking, digital twin, and communication, boosting their demand.
Global Simulation Software Market by Region
North America is the largest market of simulation software globally. A large number of companies in manufacturing and industrial sector coupled with high R&D budget, high adoption of technologies in design and development of products, significant government investment in public sectors, increasing adoption of simulation in healthcare and pharmaceutical industry is the major factor for the growth of simulation software in the region.
The U.S. is the largest market in the region, holding a significant revenue contribution in 2020. Government regulations, technological advancements, extensive investments for dedicated R&D facilities, and the presence of major companies are some of the major drivers propelling the growth of the market in the region.
Global Simulation Software Market Outlook
Trends: Current and Future
Simulation for Autonomous Vehicle Development
Advent of 5G Technology
Cloud-Based Approaches for Micro to Medium-Sized Businesses
Supply Chain Network/MAP
Automotive OEMs and Autonomous Driving Technology Development Companies
Tier-1 and Tier-2 Component Manufacturers
Universities and Research Centers
Others (Regulatory Bodies, Consortium and Associations, Intelligent Transportation System Providers, Engineering Companies, and Technology Companies)
Regulatory Bodies and Consortium and Associations
Engineering Companies and Technologies Companies
Major Engineering Companies and Technologies Companies
Reduction in Research, Development, Production, and Training Costs
Need for Virtual Testing of Autonomous Vehicles
Increasing Government Initiatives Toward Connected and Autonomous Infrastructure
Introduction of Cloud-Based Solutions
Rise in Cyber Threat Due to Increase of Data
Complexity in Integration of New Software Solution with the Existing System
Partnerships and Joint Ventures
Mergers and Acquisitions
Use of Simulation in Fourth Industrial Revolution
Increasing Demand for Electric Vehicles (EVs) Globally
Impact of COVID-19 on the Market
Contribution of Countries Toward Global Manufacturing Output
Global Scenario of COVID-19 Impact
COVID-19 Infected Countries
Assessment of COVID-19 Impact on GDP and Economic Forecast
GDP Growth Rate Projection for 2022
Assessment of COVID-19 Impact on Various Sectors
Impact of COVID-19 Outbreak on Supply and Demand Side
Impact of COVID-19 on Simulation Software Industry