Simulation Software Market - By Component Insights, Deployment Insights, End-Use Insights & Global Region Market Size, Share, Opportunity & Forecast 2020-2025


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  • Published on: Feb 2021
  • Report ID: KDMI-3362
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The global simulation software market size was valued at USD 8.5 billion in 2019 and is expected to register at a compound annual growth rate (CAGR) of 16.8% from 2020 to 2025. Simulation software is used to test the efficiency and the functional application through a virtually built real-time environment.

This simulation software is quite beneficial to help reduce production-based costing.  Some of the major drivers for this market include the growing need for eco-friendly markets and the rapid expansion of small and medium enterprises.  Furthermore, benefits in terms of production expenditure and decrease in training costs drive the market growth.

Simulation software is accessible among different geographies to help reduce costs in production and help with error-free output.  To avoid production with faulty products and their costs, production houses favor simulation software products. Additionally, it saves them time and energy involved in the research and development (R&D).  

Conventionally with the production of prototypes, there was a complex mechanism involved to control faulty products. Also, the additional cost was curbed on developing these. But with the simulation software, the entire process becomes easier. When prototypes are developed to curb the costs of the products, simulation tools are used for manual testing to prevent the processing of faulty products.  Thus, encouraging companies to use more simulation tools as part of their production processes.

Geographical Coverage

North America is one of the major shareholders of revenue for the global simulation software market.  An increasing number of Small and Medium industries is one of the major reasons for this growth. Furthermore, the inclination and interest towards research and developmental activities are driving the North American market tremendously in the forecast period.  The major simulation software players are present in regions like U.S and Canada. These countries are heavily investing in innovation for new technological products in the market. Countries like U.S and Canada are adopting innovative technologies to support and enhance their production system.

Asia Pacific regional market is the second biggest market during the forecast period due to the rapid expansion of manufacturing sectors, especially in verticals like automotive and healthcare.  These verticals can see visible traction in countries like India, Japan, Korea, and Vietnam.  Europe can also be accounted for a significant number of shares in the global simulation market and is growing continuously. U.K and Germany are contributors and drivers of the simulation market in Europe.

Market Landscape

Component Insights

The global simulation market is divided into software and service based on components. The software market is predominant in the year 2019 and will stay dominant during the forecast period. Some of the major benefits of this dominance include reliability, data safety, and uninterrupted testing of the simulation tools. The software segment uses finite element analysis, which is expected to be one of the major reasons for its growth. Finite Element Analysis or FEA is a common tool used as part of industries like automobile, defense, electronics, and aerospace to help test quality products, check the design's efficiency and overall performance.  

On the other hand, the service segment is accountable for the highest CAGR over the forecast period—awareness among virtually enabled processes and innovative product development in diverse verticals and government organizations. Popular services among organizations include designing, implementation, consulting, and maintenance, are gaining momentum. The idea is to stimulate the proper functioning of workflow improvement and process compression, and many others.

Deployment Insights

According to deployment, the global simulation software market is divided into on-premise and cloud. The cloud segment is expected to show a higher CAGR when accounted for the next six years. The cloud segment's growth can be due to factors like easy implementation and cost-effectiveness compared to traditional on-premise software. The popularity of cloud-based software is directly proportional to its applicability with R&D, training, and education.  

2019 dominated the on-premise segment due to the early adoption of this software on-site. This software is quite beneficial to companies for securing their confidential data and further secure it from hackers. These are some of the primary factors which were responsible for driving this segment. 

End-Use Insights

Based on the end-users demand, the global simulation software market is segmented into electrical & electronics, aerospace, automotive, defense, industrial manufacturing, healthcare, and many others. Some of the other segment that is simultaneously increasing this software's use are chemical, retail, telecommunications, and construction.

Virtual tools saw an early adoption in the North American regions automotive segment owing to this development. The growing use of simulation to enhance production processes is primarily driving the segment.

Competitive Landscape

In March 2020, Ansys Inc acquired Lumerica, a leading developer of simulation tools and photonic design. The acquisition provides solutions to solve the next generation product challenges.  Altair Engineering, in November 2019, launched a manufacturing simulation solution for additive manufacturing.  This toolset is considered to design and simulate manufacturing with better precision.

Other significant players include Siemens AG, Autodesk Inc., Rockwell Automation Inc., Schneider Electric SE, Dassault Systems, and many others.

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