Global Industrial Software Market (by Platform, End User, & Region): Insights and Forecast with Potential Impact of COVID-19 (2022-2027)

Global Industrial Software Market (by Platform, End User, & Region): Insights and Forecast with Potential Impact of COVID-19 (2022-2027)

Market Insight:

Industrial software is a set of application programs, processes, procedures, and functionalities that may assist in large-scale data collecting, transformation, and administration. Operations, manufacturing, design, construction, mining, textile mills, chemicals, food processing, and service providers are all industries that employ industrial software.

The power of high-performance computing equipment and the availability of vast quantities of memory have transformed industry. Industrial software aids in the digitization of real-world work data for analysis, as well as the preservation of a non-physical record that cannot be destroyed, lost, or stolen. Industrial software is offered in a variety of configurations to support the various processes used by an industry. The global industrial software market is expected to be worth US$110.50 billion in 2023, growing at a CAGR of 9.25% over the forecasted period.

Segment Covered:

• By Platform: In terms of type, the report identifies two segments of the global industrial software market: On Premise and Cloud. Among the platform, cloud segment is expected to be the fastest growing segment in the forecasted period. Companies can achieve immediateness, efficiency, resource planning activity optimization, scalability, and accessibility by deploying cloud based industrial software. Additionally, it provides advantages like quicker implementation and lower upfront costs, which are foreseen as major factors propelling growth of the segment during the forecasted period.
• By End User: On the basis of end user, the global industrial software market has been segmented into eight end users: BFSI, IT & Telecom, Manufacturing, Government, Healthcare, Retail, Aerospace & Defense and Others. Among the end user, BFSI dominated the industrial software market. Companies that specialize in delivering a variety of financial products/services, such as universal banks, make up the banking, financial services, and insurance (BFSI) market. This market has shown great expansion in recent years, and it is predicted to enhance the industrial software market during the forecast period. Software solutions assist banks in tracking transactions and generating accurate portfolio reports. The software's user-friendly interface includes a variety of charts, analytics, and other data blocks. Easy data access, digital banking, and fintech startups are driving the growth of the BFSI software market.

Geographic Coverage:

According to this report, the global industrial software market is divided into four regions: North America, Europe, Asia Pacific, and ROW. The countries covered in North America region are the US, Canada, and Mexico, while Europe includes Germany, The UK, France, Italy, and Rest of the Europe. Moreover, China, Japan, South Korea, India, Rest of the Asia Pacific are included in the Asia Pacific region.

North America accounted for the maximum share of the global market. The significant market share of this region is primarily attributable to elements like the increasing adoption of industrial software by small and medium-sized businesses, the increasing investments made by vendors in the creation of software using cutting-edge technologies, and the existence of numerous market players. The market is also anticipated to grow over the forecast period as a result of increased accessibility to software functions through smartphone applications. Furthermore, the Asia Pacific market is expected to expand as a result of the thriving manufacturing sector and expanding small and medium enterprises. Many businesses in the area have already adopted on-premises industrial software solutions to boost their organizations' productivity and performance. Additionally, the market is expected to grow as a result of the rising number of start-ups and their rising demands for cloud-based software. Government support for IT infrastructure implementation is expected to boost demand for industrial software over the forecast period.

Top Impacting Factors:

Growth Drivers

• Growing Electronics Industry
• Surging Adoption of Industrial Cloud Computing Technology
• Rapid Installations of Industrial Robots
• Rising Adoption of Digital Transformation

Challenges

• Problem of Cyber Security
• High Initial Capital Investment

Trends

• Integration of Artificial Intelligence (AI) with Industrial Software
• Increasing Adoption of Industrial Internet of Things (IIoT)
• Increasing Industrial Spending on R&D
• Growing Adoption of Automation in Raw Material Industries
• Driver: Growing Electronics Industry

Companies in the electrical and electronics industries must continuously develop innovative products and bring them to market in the shortest amount of time possible by speeding up their processes while lowering costs. The electrical and electronics industry is currently under pressure to accelerate its processes, cut costs, and boost efficiency and productivity. For these reasons, it is critical to implement specialized industrial software that facilitates the implementation of lean manufacturing techniques and provides functions for component manufacturers, service providers to the electronics industry, and OEMs serving the industrial, consumer goods, and telecommunications markets. Industrial software aids in the reduction of time to market, the enhancement of products through the addition of services, the synchronization of the entire supply chain, and real-time collaboration with partners to respond to market changes.

• Challenge: High Initial Capital Investment

Although integration of industrial software improves the automation and is cost effective but, the initial capital investment required for technology implementation and employee training is significant. Furthermore, due to the industry's fragmentation, the return on investment (ROI) cannot be predicted. Small and medium-sized enterprises (SMEs) are hesitant to adopt technology because of the high upfront costs and uncertain return on investment. Therefore, high initial capital investments are impeding the growth of the market.

• Trend: Integration of Artificial Intelligence (AI) with Industrial Software

Big data and AI provide a significant boost to Industry 4.0. Intelligent software solutions can use a factory's massive amounts of data to identify trends and patterns that can then be used to improve manufacturing processes and reduce energy consumption. This is how plants constantly adapt to new circumstances and optimize themselves without the need for operator intervention. As the level of networking increases, AI software can learn to "read between the lines," leading to the discovery of many complex connections in systems that aren't yet or are no longer visible to the human eye. Thus, integration of AI would support the growth of industrial software market in the coming years.

The COVID-19 Analysis:

Like many sectors, COVID-19 has also impacted the industrial software market. Government-imposed factory and plant closures, as well as travel restrictions, had a significant impact on manufacturing facilities and other industries. Demand for industrial software fell precipitously as a result of the temporary closure of end-use industries.

New technological approaches for logistics chain development, production, and management, also known as smart factory automation, are centered on the Industrial Internet of Things (IIoT) and Industry 4.0. These are the prevalent trends in the industrial sector, which would drive the market growth in the post COVID period.

Competitive Landscape:

The industrial software market is moderately fragmented, with some high-growth segments like cloud infrastructure and services, cybersecurity, and data analytics. In order to strengthen the market positions and propel the business growth, players with headquarters in North America and Europe are aiming to expand their presence in the Asia Pacific region. The market's major players have established robust regional presences, distribution networks, and product portfolios. The key players in the global industrial software market are:

• Microsoft Corporation
• Siemens AG (Siemens Digital Industries Software)
• IBM Corporation
• Oracle Corporation
• Salesforce Inc.
• ABB Group
• Honeywell International Inc.
• Dassault Systèmes SE
• Amazon.Com, Inc. (Amazon Web Services, Inc.)
• Cadence Design Systems, Inc.
• Synopsys Inc.
• SAP

The players with significant exposure to these aforementioned segments would continue to gain a larger share of the overall industrial software spend as more businesses digitize and modernize their software infrastructure. Technological advances, new easily accessible software solutions, and increasing trend of automation and robotics are creating opportunities for new market entrants in the industrial software market.