Industrial Software Market

December 17, 2024

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The global industrial software market size is expected to expand around USD 117.04 billion by 2033 from valued at USD 20.18 billion in 2023. The industrial software market is anticipated to grow at a CAGR of 19.21% from 2024 to 2033.

Industrial software encompasses a suite of applications, processes, and functions designed to collect, transform, and manage large-scale data. It plays a vital role across diverse industries such as manufacturing, construction, healthcare, textiles, chemicals, food processing, and more. This software ensures the secure preservation of non-physical records while digitizing operational data for analysis, both of which are crucial for business operations.

Industrial software significantly benefits well-positioned companies, often boasting operating margins of approximately 80%, and has become a cornerstone for business growth. According to a recent McKinsey survey, 38% of executives in industrial companies expect digital solutions to contribute over 50% of their revenue.

Market Highlights

North America dominated the industrial software market in 2023, holding a 34.25% revenue share.
Europe followed, generating 29.57% of global revenue in the same year.
Manufacturing Execution Systems (MES) accounted for 29.10% of the global revenue share in 2023.
The Human Machine Interface (HMI) segment is poised for substantial growth in the coming years.

Key Market Trends

Growing Adoption of IoT:
The Internet of Things (IoT) enables seamless communication and interaction between devices. Industrial IoT provides data-driven insights that empower businesses to make informed decisions and improve operational performance.
Shift to Cloud-Based Solutions:
Cloud-based industrial software is increasingly popular due to its affordability, scalability, and real-time capabilities. These solutions support dynamic business processes by enabling remote monitoring, collaboration, and data sharing.
Demand for Data-Driven Decision-Making:
Real-time access to data supports strategic, operational, and tactical decisions. Predictive analytics and data-driven insights enhance decision-making across all business levels, from daily operations to long-term strategies, driving market growth.
Rise in Smart Manufacturing:
Smart manufacturing reduces material waste, enhances production capacity, and improves lead times while boosting employee satisfaction. Industry experts predict that by 2026, approximately 75% of large companies will adopt smart intralogistics robots to automate processes, reduce costs, and address labor shortages.

Regional Analysis

North America:

The North American industrial software market was valued at USD 6.91 billion in 2023 and is projected to reach USD 40.09 billion by 2033. The region’s growth is fueled by increasing automation and digital transformation in the industrial sector. Investments by major technology players like Microsoft, IBM, and Oracle, along with a surge in innovative startups, are further driving market expansion.

Asia-Pacific:

The Asia-Pacific market was valued at USD 4.96 billion in 2023 and is expected to surpass USD 28.79 billion by 2033. Growth in this region is driven by the rise of creative startups, affordable internet services, and the adoption of automation and digitization in industries. Countries such as China, Japan, South Korea, and Singapore are at the forefront, leveraging robotics, IoT, and AI to boost manufacturing productivity under initiatives like “Made in China 2025.”

Type Analysis

The global industrial software market is segmented by type into PLM, ERP, MES, CAD/CAM, SCADA, PLC, DCS, PAM, HMI, and Production Process Management and Control. In 2023, MES led the market with the highest revenue share. Key highlights include:

PLM: Manages product lifecycle data and processes across supply chains.
ERP: Optimizes resources and manages operations like finance, HR, and supply chains.
MES: Tracks and manages production from raw materials to finished goods.
CAD/CAM: Integrates design and manufacturing processes for 2D/3D modeling and CNC machining.
SCADA: Monitors and controls industrial processes with remote and on-site data collection.
PLC & DCS: Automate and control industrial systems for efficiency and reliability.
HMI: Provides user interfaces for managing industrial equipment.

Type Analysis

PLM: Manages product lifecycle data and processes across supply chains.
ERP: Optimizes resources and manages operations like finance, HR, and supply chains.
MES: Tracks and manages production from raw materials to finished goods.
CAD/CAM: Integrates design and manufacturing processes for 2D/3D modeling and CNC machining.
SCADA: Monitors and controls industrial processes with remote and on-site data collection.
PLC & DCS: Automate and control industrial systems for efficiency and reliability.
HMI: Provides user interfaces for managing industrial equipment.

Deployment Analysis

On-Premise: Offers high control but requires significant maintenance and setup.
Cloud-Based: Scalable, cost-effective, and accessible remotely with real-time collaboration features.

End-User Analysis

Manufacturing: Enhances efficiency, reduces costs, and optimizes processes.
Energy & Utilities: Supports predictive maintenance and process optimization.
Transportation & Logistics: Improves demand forecasting, asset tracking, and route planning.
Healthcare & Life Sciences: Streamlines operations, enhances patient care, and ensures compliance.

Recent Developments

Paperless Parts & Hexagon Partnership (June 2024): This collaboration aims to accelerate the adoption of advanced quoting software among custom parts manufacturers, enhancing operational efficiency, revenue, and competitiveness in American manufacturing.
Salesforce LLM Benchmark (June 2024): Salesforce introduced a benchmark for evaluating large language models (LLMs) in CRM systems, focusing on accuracy, cost, speed, and trust/security to help businesses choose the right solutions.
GE Aerospace Investment (March 2024): GE Aerospace announced a $650 million investment to enhance production and support for its commercial and defense supply chains.