Computer Aided Engineering Market Size, Share & Trends Analysis Report By Type (FEA, CFD, Multibody Dynamics, Optimization & Simulation), By Deployment Model, By End Use, And Segment Forecasts, 2020 - 2027

Report Overview

The global computer aided engineering market size was valued at USD 7.3 billion in 2019 and is expected to register a CAGR of 9.3% over the forecast period, owing to increased outsourcing of manufacturing processes to emerging economies such as India, China, and Russia. The market is poised for unprecedented growth over the forecast period as integrated software solutions eliminate the need for multiple prototypes and product recall concerns, thereby reducing the cost associated with prototyping and product recall strategy. Moreover, the increasing use of computational fluid dynamics software for analyzing temperature in battery modules and extending battery life and performance is anticipated to drive the market for computer-aided engineering software.

The global market has been witnessing a drastic shift from on-premise computing to cloud-based computing. Cloud computing reduces costs related to hardware acquisition and software licensing, installation, and support. This is further expected to increase the use of computer-aided engineering (CAE) software. Additionally, companies are adopting the Hyper-Converged Infrastructure (HCI) platform for building a private cloud that enables advanced computation and storage services.

Customers are increasingly quantifying their software contributions. As a result, companies are willing to pay high license fees for software that supports low-value processes. They are developing alternating pricing and delivering models, alike Software as a Service (SaaS) pricing models, enabling customers to opt for a pay-as-you-go subscription plan. However, the new pricing model is expected to affect the software providers’ cash flow, revenue recognition, and finance.

The market for value-added resellers (VAR) is expected to witness significant growth over the projected period. VARs help in reducing the gap between the end-users and suppliers. VARs receive certifications and training from suppliers to increase their credibility. As a result, the growth of VARs is expected to have a positive effect on the growth of computer-aided engineering across various end-uses.

Type Insights

Based on type, the CAE market is segmented into Finite Element Analysis (FEA), Computational Fluid Dynamics (CFD), multibody dynamics, and optimization and simulation. The FEA segment dominated the market for computer-aided engineering in terms of revenue in 2019. FEA is a computational analysis methodology that helps in determining the strength of a product with respect to the loading. FEA simulates real components to analyze problems pertaining to heat transfer, structural analysis, electromagnetic potential, and mass transport.

Computational fluid dynamics involves the qualitative prediction of fluid flow using mathematical modeling and software tools. CFD is used in analyzing turbulence, flow, and pressure distribution of gasses and liquids and their interaction with different structures. Industry players are aiming at developing application-specific software for customized process functions. Multibody dynamic analysis is of two types: inverse dynamics and forward dynamics. Forward dynamics analysis is the movement of individual components by the application of external forces. Inverse dynamics involves the analysis of forces to move the system in a specific way.

End-use Insights

Based on end-use, the computer-aided engineering market is segmented into defense and aerospace, automotive, electronics, medical devices, industrial equipment, and others. The automotive end-use segment dominated the market in terms of revenue in 2019. In the automotive sector, CAE software is used to analyze the feasibility of heat dissipation techniques such as cooling, ventilation, and aerodynamics.

The aerospace sector is expected to witness strong growth over the forecast period. Rising government spending in the defense and aerospace sector in order to modernize anti-terror equipment and mitigate security lapses is anticipated to increase the adoption of CAE software in the segment. Furthermore, growing concerns about security and surveillance in public places are likely to influence demand for computer-aided engineering software and solutions.

Advanced technologies such as Color Noise Reduction (CNR) for truer colors, Backside Illumination (BSI) for high sensitivity, and High Dynamic Range (HDR) for smooth and crisp video are anticipated to provide opportunities for use of computer-aided engineering software in the electronics segment. The medical imaging segment is also gaining traction in the market owing to the efficiency of CAE solutions in diagnosing complex medical conditions. The rising prevalence of critical and chronic diseases, such as cardiovascular diseases and cancer, and increasing awareness regarding the importance of early diagnosis are key factors driving the demand for imaging systems in healthcare facilities, thereby boosting the uptake of computer aided engineering software and solutions.

Deployment Model Insights

The software industry is immensely fast-paced, and timely development and introduction of products to the market are vital to a firm’s success. Companies are obtaining new software technologies through mergers and acquisitions. Based on the deployment model, the market for CAE solutions is segmented into on-premise and cloud-based. Cloud computing offers easy access to data, vast space for data storage, and high security. Moreover, cloud-based CAE, offered as a Software-as-a-Service (SaaS), renders application-specific solutions to CAE users. Hence, the cloud-based deployment model is expected to exhibit high growth over the projected period. Cloud-based deployment of computer-aided engineering software enables faster distribution, minimal maintenance, reduction in cost, and an increase in scalability.

Even though the on-premise deployment of CAE software increases software deployment cost as well as up-gradation costs, the segment held the largest revenue share in the CAE market in 2019. This dominance can be attributed to its early adoption. Additionally, deployment of software at the client’s site is considered to be a more convenient option by several companies where data confidentiality issues take priority. The on-premise segment is expected to retain its hold over the global market throughout the forecast period.

Regional Insights

Europe dominated the global market for computer-aided engineering software in terms of revenue in 2019 and is expected to retain its lead throughout the forecast period. Developed economies in the region are expected to witness significant growth owing to the presence of bio-diverse cultures and increasing automation in the manufacturing sector. Rising concerns regarding greenhouse gas emissions and evolving battery technologies are anticipated to spur the European market for CAE software solutions. Rapid penetration of IoT in numerous industries and increasing spending on the defense sector are also influencing the regional market.

The Asia Pacific market is expected to witness strong growth over the forecast period. This can be attributed to rising government investments in the development of the manufacturing sector and expanding the capacity of renewable energy generation. Rising automation of industrial equipment is also likely to drive industry demand.

Key Companies & Market Share Insights

Some of the major industry players are BenQ Corporation (Taiwan); Casio Computer Co., Ltd. (Japan); Dell Technologies, Inc. (U.S.); NEC Display Solutions, Ltd. (Japan); and Seiko Epson Corp. (Japan). Industry players are constantly investing in R&D to develop differentiated products and stay ahead of the competition. Companies are also obtaining new software technologies through mergers and acquisitions and are aiming to create a strong customer base by investing in sales and marketing. With an established customer base, existing CAE players are constantly improving products through R&D, restricting start-ups and smaller companies from penetrating the market. These companies are offering specialized products and services to customers at premium prices. This is expected to maintain the low bargaining power of buyers.

Computer Aided Engineering Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global computer-aided engineering market report based on type, deployment model, end-use, and region:

• Type Outlook (Revenue, USD Million, 2016 - 2027)

  • Finite Element Analysis (FEA)

  • Computational Fluid Dynamics (CFD)

  • Multibody Dynamics

  • Optimization & Simulation

• Deployment Model Outlook (Revenue, USD Million, 2016 - 2027)

  • On-premise

  • Cloud-based

• End-use Outlook (Revenue, USD Million, 2016 - 2027)

  • Automotive

  • Defense & Aerospace

  • Electronics

  • Medical Devices

  • Industrial Equipment

  • Others

• Regional Outlook (Revenue, USD Million, 2016 - 2027)

  • North America

    • The U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • The U.K.

    • France

    • Italy

    • Spain

    • Russia

  • Asia Pacific

    • China

    • India

    • Japan

    • Singapore

    • South Korea

  • South America

    • Brazil

  • Middle East and Africa (MEA)