Simulation Software Market Size, Share & Trends Analysis Report By Component (Software, Service), By Deployment (On-premise, Cloud), By End Use (Healthcare, Industrial), By Application, And Segment Forecasts, 2023 - 2030

Report Overview

The global simulation software market size was valued at USD 18.71 billion in 2022 and is estimated to register a compound annual growth rate (CAGR) of 13.6% from 2023 to 2030. Simulation software is a tool used to virtually create a real-time environment to test the applicability and efficiency of different products and processes. Benefits, such as a reduction in production expenditure and reduced costs of training, are expected to drive the market. Furthermore, simulation tools play a major role in determining the effects of military weapons. They also help automotive companies determine the ideal vehicle prototypes for reducing CO2 emissions.

Simulation software is widely adopted by different companies as it helps reduce production costs. The software helps develop several prototypes and test them virtually. Moreover, it helps realize error-free output in a production process, thereby avoiding the production of faulty products and the respective costs involved. It also helps save time spent on R&D activities. All these factors are expected to fuel the market growth. Conventionally, manufacturers incurred huge costs while prototyping products, which involved complex mechanisms. Despite the availability of prototypes, the chances of failure were high, which incurred additional R&D expenses to reduce such product failures.

Expenses incurred on prototypes and curbing faults of the existing products led to increased pre and post-production costs. In such scenarios, the use of simulation software helps reduce the need for manually testing multiple prototypes to subsequently reduce the chances of product failures. This is encouraging companies to make investments in simulation tools. Manufacturers across the globe are making investments to develop AI-related technologies to cope with the Volatile, Uncertain, Complex, and Ambiguous (VUCA) world. Virtual testing techniques are used to test these AI-enabled devices and involve the observation of the behavior of these devices in real-time situations.

The use of the virtual testing method increases the efficiency of a product development process and simultaneously reduces the product development cost. This growing focus on AI devices and products is expected to lead to the adoption of virtual testing tools. Moreover, the industry is witnessing growth owing to the emergence of autonomous vehicles and Electric Vehicles (EVs). Automotive manufacturers are using simulation tools to test the efficiency and effectiveness of these vehicles using real-world situations. They are also using simulation software to meet different industry standards and regulations. In September 2018, BMW Group announced investments of approximately USD 115.0 million to establish a high-fidelity driving simulation center in Munich, Germany.

Component Insights

The software segment dominated the market and accounted for the largest revenue share of over 69.9% in 2022. The segment is expected to remain dominant throughout the forecast period. The growth of this segment can be attributed to the benefits of software, such as data safety, reliability, and uninterrupted testing. Furthermore, under the software segment, finite element analysis is expected to largely contribute to the growth of the segment. FEA is widely used in industries, such as automotive, aerospace, defense, and electronics, to test product quality, performance, and design.

On the other hand, the service segment is expected to register the fastest growth rate during the forecast period. The growth of the segment can be attributed to the growing awareness of virtually-enabled processes used for product development among companies and governments. Services, such as design and consulting, implementation, and maintenance are gaining popularity among various enterprises. ANSYS, Inc., one of the key players in the market, provides consultation and professional services for simulation workflow improvement and process compression.

Deployment Insights

On the basis of modes of deployment, the global market has been further segmented into on-premises and cloud. The on-premise deployment segment dominated the market in 2022 and accounted for the largest share of more than 71.8% of the global revenue. The high share of this segment was attributed to the early adoption of the software. On-premise deployment is a traditional method of deployment that involves the installation of the software on-site. This method is beneficial for companies that wish to maintain the confidentiality of their data and secure the data from hackers.

These benefits related to data confidentiality and security are the primary factors driving the growth of the segment. The segment is expected to account for the highest market share by 2030. The cloud segment is expected to register the fastest CAGR over the next seven years. The growth of this segment can be attributed to the benefits offered, including easy implementation and cost-effectiveness, as compared to the traditional on-premise software. Since the software is deployed over the cloud, it is easier to maintain and upgrade based on a client’s requirements. Moreover, cloud-based software can be used in applications, such as R&D and training & education.

Application Insights

The engineering, research, modeling & simulated testing dominated the market and accounted for the largest revenue share in 2022. The high segment share is attributed to the robust adoption of simulation software by prominent end-use companies like Airbus, Boeing, Volkswagen Group, and others for product engineering, modeling, research, and testing purposes. In addition, the segment growth is driven by the client’s requirements for quick and quality improvement in a cost-effective manner, allowing companies to foray into the market with new products fast and lower warranty costs.

Moreover, the shift from actual prototyping towards simulation is ubiquitous across many industries and the demand for modeling, designing, and simulated testing tools is intensified by the massive investments in high-growth applications including 5G, clinical trials, autonomous, electrification, and the Industrial Internet of Things (IIoT). Furthermore, cyber threats have always been a concern for several industries, such as military & defense, enterprise, and others. The introduction of simulation solutions provides organizations with cyber situational awareness. This helps users identify malicious cyber-attacks within that network. Thus, with the rising concerns of cyber threats across the globe, it is anticipated to see massive adoption of cyber simulation tools and help the segment grow at a significant CAGR of 13.3% from 2023 to 2030.

End-use Insights

On the basis of end-uses, the market has been further segmented into automotive, aerospace & defense, electrical & electronics, industrial manufacturing, healthcare, and others. The automotive segment dominated the market and accounted for the largest revenue share in 2022, owing to the early adoption of virtual tools for product development. The growth was credited to the early adoption of virtual tools for product development. Furthermore, the automotive industry is witnessing a shift toward the use of electric and autonomous vehicles. The use of simulation to enhance production processes in this industry is primarily driving the growth of this segment.

The other segment includes industries and sectors, such as construction, retail, and telecommunications. The aerospace & defense segment is expected to grow at a considerable CAGR over the forecast period due to the use of simulators for designing aircraft as well as defense equipment. Also, simulators are used in the defense industry for the purpose of training soldiers. Growing government concerns regarding terrorism and national security have resulted in increased investments in new and improved defense equipment that require the use of simulation software. This, in turn, has contributed to the growth of this segment.

Regional Insights

In 2022, North America dominated the target market and accounted for the largest revenue share of 34.2%. The region is expected to continue its dominance over the forecast period on account of the presence of major players in the U.S. and Canada. The companies in these countries have been observed to be investing in research and development activities to introduce technologically advanced products in the market. Moreover, the region is well-known as an early adopter of advanced technologies. In the Asia Pacific, the market is anticipated to witness the fastest CAGR over the forecast period.

The rapid growth can be attributed to the increased manufacturing activities in the regional industries and sectors, such as automotive and healthcare. The growth of the construction and healthcare verticals in countries, such as Japan and India, are subsequently driving the regional market growth. Europe also accounted for a significant share of the market in 2022. Countries, such as Germany and the U.K., primarily contributed to the growth of the regional market. High penetration of AI technology and increasing defense expenditure in the region are some of the key factors driving the market growth.

Key Companies & Market Share Insights

Key market players are strategically focused on partnership and collaboration activities to expand their geographical presence and overall product portfolios. For instance, in February 2021, Siemens partnered with EOS North America, which provides industrial 3D printing of metal and polymer technology. The partnership aims to improve additive manufacturing efficiency and profitability. Moreover, the partnership enables the customers of EOS North America to leverage the capabilities of Siemens including build process simulation, topology optimization, design validation, materials engineering & durability analysis, and process automation among others. In addition, the companies also actively made efforts to combat the COVID-19 situation by offering simulation analyses pertaining to the spread of the disease.

Furthermore, the companies are launching new products & services and are also focusing on maintaining competitive prices. The use of simulation software is enabling automobile manufacturers to test multiple variants of a vehicle across various driving terrains and situations before determining and finalizing the ideal prototype of the vehicle. Therefore, these manufacturers are opting for full-fledged implementation of simulation software solutions. For instance, in September 2018, BMW Group established a simulation center in Munich, Germany. The facility is equipped with a high-fidelity simulator, capable of representing rotational, longitudinal, and transverse movements of a vehicle in real-time. Some of the prominent players in the global simulation software market include:

• Altair Engineering, Inc.

• Autodesk, Inc.

• Ansys, Inc.

• Bentley Systems, Inc.

• Dassault Systèmes

• MathWorks, Inc.

• Rockwell Automation, Inc.

• Simulations Plus

• ESI Group

• GSE Systems

Simulation Software Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For the purpose of this study, Grand View Research has segmented the global simulation software market report based on component, deployment, application, end-use, and region:

• Component Outlook (Revenue, USD Million, 2017 - 2030)

  • Software

  • Services

    • Simulation Development Services

    • Training and Support & Maintenance

• Deployment Outlook (Revenue, USD Million, 2017 - 2030)

  • On-Premise

  • Cloud

• Application Outlook (Revenue, USD Million, 2017 - 2030)

  • Engineering, Research, Modeling & Simulated Testing

  • High Fidelity Experiential 3D Training

  • Gaming & Immersive Experiences

  • Manufacturing Process Optimization

  • AI Training & Autonomous Systems

  • Planning And Logistics Management & Transportation

  • Cyber Simulation

• End-use Outlook (Revenue, USD Million, 2017 - 2030)

  • Automotive

  • Aerospace & Defense

  • Industrial

    • Oil & Gas

    • Mining

    • Energy & Utilities

    • Others

  • Electronics & Semiconductor

  • Transportation & Logistics

  • Healthcare

  • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • UK

    • Germany

    • France

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa (MEA)