Industrial Software Market Size, Share, Report 2024 to 2033

Industrial Software Market Size and Growth 2024 to 2033

The global industrial software market size was valued at USD 20.18 billion in 2023 and is expected to be worth around USD 117.04 billion by 2033, growing at a compound annual growth rate (CAGR) of 19.21% from 2024 to 2033.

Industrial software is a collection of application programs, processes, procedures, and functions designed to facilitate the collection, transformation, and management of data at scale. It finds application in a wide variety of industries, including manufacturing, construction, design, healthcare, textiles, chemicals, food processing, and more. Guaranteeing the preservation of a non-physical record that is shielded from loss, theft, or destruction and digitizing of actual work data for analysis requires industrial software which is very essential for both. The software products and services profit the well-positioned industrial companies, which have an operating margin of roughly 80% and are becoming important to business growth. A recent McKinsey survey indicates that 38% of executives in industrial companies anticipated that digital solutions would account for more than 50% of their revenue.

Report Highlights

• North America has leading the market in 2023, accounted revenue share of 34.25% in 2023.
• Europe has generated revenue share of 29.57% in 2023.
• By type, the manufacturing execution system (MES) segment has accounted for a 29.10% global revenue share in 2023.
• By type, the human machine interface (HMI) segment is expected to hit significant growth in the upcoming years. 

Industrial Software Market Growth Factors

• Expanding to Operational Solutions: An industrial services company wanted to expand its focus from hardware to operational solutions and accelerate the growth of its digital products business. To improve its go-to-market strategy, streamline software development activities, identify new offerings, and provide guidance on modernizing product architecture. These changes helped identify underperforming or misaligned products, which reduced costs. Together, the cost reduction and go-to-market initiatives created the potential for the client to more than double its revenue.
• Incorporation of Big Data and Data Analytics: Big data and data analytics represent cutting-edge technologies in the software industry. Integrating CMS solutions, with big data and data analytics into the enterprise infrastructure can provide a competitive advantage, which can be achieved by utilizing the power of data. Market players can utilize these technologies to enhance decision-making capabilities and streamline operational procedures by adopting an appropriate strategy and paying close attention to the impacting factors.
• Adoption of Industry 4.0: Digitalization is becoming the focal point of most industries owing to the development of Industry 4.0 implementation, which incorporates digital technologies into the manufacturing process. The goal of integrating digital technologies like IoT, AI, and data analytics is to make industrial processes more productive, efficient, and flexible.
• Rise in Automation: As industrial processes are getting automated, software solutions to manage and enhance manufacturing processes are becoming highly important. Industrial software encourages automation in some domains, such as manufacturing, supply chain management, and quality control.
• Requirement of Operational Efficiency: Market players are working harder than ever to increase the efficiency of their operations to stay in the competitive global marketplace. Cost-saving, resource-maximizing, operational monitoring, analysis, and optimization tools are offered by industrial software solutions.

Industrial Software Market Trends

• Increasing adoption of IoT by Industries: The Internet of Things (IoT) is one of the latest software technologies that has paved the way for the interaction and communication of devices and objects. Data-driven insights are provided by industrial IoT that can be used for making informed decisions and performance improvements.
• Shifting to Cloud-Based Solutions: Advantages like affordability, expandability, and ease of use can be achieved due to the growing popularity of cloud-based industrial software solutions. Dynamic and versatile business processes can be achieved through cloud-based solutions as they allow real-time data sharing, remote monitoring, and collaboration.
• Demand for Data-Driven Decision Making: Finances of a company can largely influence important decisions. Proper leadership evaluation and support can be achieved through access to real-time data and insights along with strategic, operational, and tactical decisions in one location. Decision-makers can use these numbers to make decisions and create predictive analytics. This data-driven decision-making is not limited to big decisions but also includes day-to-day operations and business conditions. Hence, this drives market growth.
• Growing Adoption of Software for Smart Manufacturing: Smart manufacturing helps big companies succeed in many ways. These include reduced material waste, increased production capacity, improved lead times and higher employee satisfaction. For instance, by 2026, as per the industry experts, ~75% of the large businesses are expected to be using smart intralogistics robots. This rising adoption is due to the growing need for automated processes, cut expenses, and deal with labor shortages. To stay competitive in a global market that is changing constantly, an increasing number of businesses, including those in the electronics, automotive, and aerospace sectors, are turning to smart manufacturing.

Report Scope

Industrial Software Market Dynamics

Drivers

Increased Complexities Associated with Operations

• Many variables, including globalization, the need for customization, and regulatory constraints, are contributing to the complexity of industrial operations. Industrial software offers capabilities for scheduling, planning, and resource allocation, which aid in managing this complexity.

Growing Use of Asset Performance Management (APM) Solutions

• APM solutions are being used by asset-intensive industries including manufacturing, energy, and utilities more often in order to maximize the lifespan and performance of vital assets. Reliability analysis, asset monitoring, and predictive maintenance are all made possible by industrial software.

Restraints

High Installation Costs

• Purchasing software licenses and physical infrastructure in advance is frequently necessary for the implementation of industrial software. For startups or those with less funding, this might be a hurdle. Further, new software integrations with old systems can be expensive and difficult to implement. Integration attempts may be made more difficult by incompatibilities between various hardware setups and software platforms.

Restrictions Related to Regulatory Compliance and Interoperability

• Several laws and guidelines about safety, the environment, and data privacy apply to the industrial sectors. Complying with these requirements makes software development, installation, and ongoing maintenance more difficult. Also, software solutions can occasionally be proprietary or incompatible with other hardware and systems. This can reduce operational flexibility and scalability, particularly in settings with several suppliers and technologies in use.

Opportunities

Growing Use of Digital Twin Technology

• The digital twin’s technology is becoming more and more popular in industrial applications. It builds virtual duplicates of real assets or processes. Digital twins may be created and used for simulation, optimization, and performance tracking with the help of industrial software.

Advancements in Manufacturing Processes

• Innovations in manufacturing processes, such as the use of automation and digital technologies, are creating opportunities for cost reductions and efficiency improvements in the production of insulation materials. These advancements can help manufacturers meet the growing demand for insulation while maintaining competitive pricing.

Challenges

Susceptibility to Cyberattacks

• While insulation materials contribute to energy efficiency, the environmental impact of some materials, such as those that are non-biodegradable or contain harmful chemicals, is a growing concern. Addressing these environmental issues through the development of greener, more sustainable insulation products is a key challenge for the industry.

Shortage of Skilled Professionals

• The shortage of skilled professionals is a significant challenge for the industrial software market. To create, implement, and maintain industrial software efficiently, certain knowledge and skills are frequently needed. It might be difficult to find and keep talent if there is a lack of competent workers with the required experience.

Industrial Software Market Segmental Analysis

Type Analysis

Based on type, the global market is segmented into product lifecycle management (PLM), enterprise resource planning (ERP), manufacturing execution systems (MES), CAD/CAM, SCADA, programmable logic controller (PLC), distributed control system (DCS), privileged access management (PAM), human machine interface (HMI), production process management and control. The manufacturing execution system (MES) segment dominating the market in 2023 with highest revenue share.

Product Lifecycle Management (PLM): PLM software manages all information and processes in each step of a product or service lifecycle across globalized supply chains. This comprises of the data of items, products, parts, documents, requirements, quality workflows, and engineering change orders. Business processes are aligned on a single platform with PLM software, with the product value chain driving faster innovation with integrated business planning and supply chain execution, improving the way products are designed, manufactured, serviced, and maintained.

Enterprise Resource Planning (ERP): ERP systems are a type of manufacturing management software that increases the organizational efficiency of a manufacturing company by managing and improving the utilization of the company's resources. Improving and/or reducing the number of resources required without sacrificing quality and performance is the key to effectively improving the growth and profitability of the manufacturing business. ERP software enables manufacturing companies to manage critical aspects of everything from shop floor operations to delivery and inventory planning. Software used for managing the key business operations, include finance, accounting, human resources, and supply chain, is known as enterprise resource planning, or ERP.

Manufacturing Execution Systems (MES): An unique and dynamic software system known as manufacturing execution system (MES) helps in keeping track of documents, and managing the production process of goods from raw materials to final goods. The MES software acts as a functional intermediary between enterprise resource planning (ERP) and process control systems, providing decision-makers the information they need for maximizing production and making the factory floor more effective. An MES is essential to achieving optimal performance in the competitive and rapidly changing manufacturing environment.

CAD/CAM: CAD/CAM is the integration of computer-aided design (CAD) and computer-aided manufacturing (CAM). CAD/CAM software is used for designing and manufacturing prototypes, finished products, and production runs of products by using a single design tool. CAD/CAM software allows companies to create 2D and 3D models, simulate various production processes, and generate toolpaths for CNC machines. CAD/CAM software is used in many industries, that include aerospace, automotive, healthcare, and consumer goods.

Supervisory Control and Data Acquisition (SCADA): Systems used for monitoring, controlling, and analyzing industrial processes and equipment are known as Supervisory Control and Data Acquisition (SCADA). The system contains both software and hardware components and provides remote and on-site collection of data from the industrial equipment. It also allows companies to manage industrial sites remotely. The main purpose of a SCADA system is to monitor and control equipment in industrial processes. Therefore, SCADA systems are found almost everywhere.

Programmable Logic Controller (PLC): PLC software is the tool for programming, monitoring and controlling. It allows you to create and edit control logic in various programming languages such as ladder logic, function block diagram and structured text. Popular brands for PLC software include Siemens TIA Portal, Rockwell Automation Studio 5000 and Mitsubishi GX Works. These tools provide features such as simulation, debugging and real-time monitoring, making it easier to develop and troubleshoot PLC programs. Using the right PLC software ensures efficient and reliable automation of industrial processes.

Distributed Control System (DCS): A distributed control system (DCS) is a digital automated industrial control system (ICS) that uses geographically distributed control loops in a factory, machine, or control area. The goal of a DCS is to control industrial processes to increase their safety, cost-effectiveness, and reliability.

Privileged Access Management (PAM): The process of controlling and monitoring all privileged access to a system via a central platform is known as privileged access management (PAM). Any organization that uses PAM can get a thorough picture of who is accessing what information in the systems and what tasks are being completed. PAM provides companies with complete control and visibility into which users have access to systems and what types of actions they can perform.

Human Machine Interface (HMI): Human-machine interface (HMI) software provides an intuitive graphical user interface with input/output controls to monitor and operate sophisticated industrial equipment. HMI software can be installed on HMI hardware or regular PCs, mobile devices, and wearables. HMI software is primarily an input/output solution; it only performs most of its functions when integrated with other industrial solutions.

Production Process Management and Control: Production process management and control software enables fast and secure process automation to maximize efficiency and productivity. This software is used to manage bills of materials, assembly designs, and quality inspections. It helps visualize progress, track daily operations, ensure consistent quality, and improve relationships with suppliers.

Deployment Analysis

Based on deployment, the global market is segmented into on-premise and cloud-based.

On-Premise: Systems that are installed inside a particular infrastructure are referred to as on-premise. This kind of software requires a substantial amount of setup and upkeep from the user and is then installed on-site. Industrial software that is installed on-site provides users with good control and flexibility, however, it also comes with extra maintenance, scalability, and security overhead.

Cloud-Based: Industrial software that runs on the cloud is known as cloud-based software. Some of the characteristics of cloud-based industrial software include Pay-as-you-go pricing, self-provisioning capabilities, automatic scalability, and low upfront costs. Industrial software hosted in the cloud can be accessed from any remote location with the help of a strong internet connection. The cloud-based software is generally more secure than on-premise software.

End-Users Analysis

Based on end user, the global market is segmented into manufacturing, energy and utility, transportation and logistics, and healthcare and life sciences.

Manufacturing: Industrial software has become important to modern manufacturers because it offers solutions that can reduce costs and increase the efficiency of the production process. These software solutions can automate complex processes, offer real-time data analytics, streamline logistics, reduce downtime, and provide operational insights to improve performance. Some industrial software solutions are specifically targeted at the manufacturing sector, while many also offer customized features so they can be used in other types of businesses.

Energy & Utilities: Energy and utility companies use industrial software to assist with predictive maintenance, data collection, process optimization, and intelligent forecasting. These software solutions can be used for maintaining and enhancing the current systems and procedures in the oil and gas, electricity and power, and renewable energy sectors. Additionally, the industrial software can offer data that can be utilized for guiding decisions regarding infrastructure investments, which can in turn reduce expenses and boost productivity.

Transportation & Logistics: In the transportation and logistics sector, industrial software is used for optimizing operations. These solutions can support demand forecasting and optimization, asset and freight tracking, and route planning and scheduling. Players in this industry can further optimize efficiency and profitability by gaining insights into customer behavior, thereby saving time and money by incorporating automation into systems and processes.

Healthcare & Life Sciences: Industrial software is used by healthcare and life sciences sector for the purpose of handling patient data, processing medical records, and storing digital data. With the use of the industrial software solutions all the processes in the organization are streamlined, patient care is enhanced, and legal and regulatory compliance is guaranteed. In addition, by incorporating automation into daily operations healthcare companies can save time and money, enhance patient satisfaction and experience, and lower the risk of error.

Industrial Software Market Regional Analysis

The industrial software market is segmented into various regions, including North America, Europe, Asia-Pacific, and LAMEA. North America is dominating the market with higfhest revenue share in 2023. Here is a brief overview of each region:

Why is North America leading the industrial software market?

The North America industrial software market size was valued at USD 6.91 billion in 2023 and is expected to reach around USD 40.09 billion by 2033. The growing demand for automation and digital transformation in the industrial sector of the region is driving the market growth. Companies are spending money on software solutions for boosting productivity, cutting expenses, and increasing efficiency. Additionally, the number of startups in the region providing cutting-edge software solutions is also constantly rising. The North American market has the presence of significant technology companies, such as Microsoft, IBM, and Oracle, which is advantageous for the growth of the market. These companies are investing a lot of money in developing industrial software solutions.

Europe Industrial Software Market Trends

The Europe industrial software market size was estimated at USD 5.97 billion in 2023 and is projected to hit around USD 34.61 billion by 2033. The rising number of startups providing cutting-edge software solutions are paving their way into the European industrial software industry. This promotes market innovation and competition, which in turn results in higher-quality goods and services. Furthermore, a favorable environment is created by the growing number of government initiatives to support the use of industrial software leading to investment by companies in software solutions which is driving the market growth in the region.

Why is Asia-Pacific hit rapid growth in the industrial software market?

The Asia-Pacific industrial software market size was accounted for USD 4.96 billion in 2023 and is predicted to surpass around USD 28.79 billion by 2033. The primary drivers of the industrial software market in Asia Pacific are the region's growing number of creative startups, low-cost internet service availability, and the industry's rapid growth as a result of growing demand for automation and digitization of industrial processes. Countries such as China, Japan, South Korea, and Singapore are at the forefront of strategic initiatives and investments that are focused on advancing manufacturing by using advanced technologies. Combining robotics, IoT, and AI to increase manufacturing productivity and innovation is the main focus of the "Made in China 2025" initiative.

LAMEA Industrial Software Market Trends

The LAMEA industrial software market was valued at USD 2.34 billion in 2023 and is anticipated to hit around USD 13.55 billion by 2033. The Middle East is home to large-scale industrial projects, such as manufacturing, construction, and oil and gas sectors. For these projects, industrial software is required for managing and optimizing operations. Major players are investing more money into industrial software as they try to capitalize on the developing economies of emerging markets like the United Arab Emirates, Saudi Arabia, and Qatar. Further, LAMEA has a skilled labor pool and attractive tax incentives that are contributing to the growing number of foreign investments in the region, which benefits the market. In addition, the growing digital infrastructure in the region is further driving the growth of the industrial software market.

Industrial Software Market Top Companies

• Rockwell Automation
• Schneider Electric
• Autodesk
• Honeywell
• Siemens AG
• IBM
• ABB Group
• Microsoft
• Oracle
• Infor
• PTC Inc.
• AVEVA Group plc
• Epicor
• SAP SE
• Dassault Systèmes
• Hitachi
• JK Technosoft
• Wonderware
• Industrial Software Solutions
• Emerson Electric Co.

The global market is highly competitive and includes various SMEs and large companies including Autodesk, Siemens, Rockwell Automation and ABB Group. Agreements, acquisitions, mergers and contracts are some of the key strategies adopted by these companies. Moreover, the companies place great emphasis on using cutting-edge technologies in software for smart manufacturing applications. Schneider Electric and ArcelorMittal Nippon Steel India forged a partnership in June 2023 for the purpose of offering advanced training in smart manufacturing. As a part of the partnership, Schneider Electric developed training facilities and smart labs for AM/NS India's NAMTECH as an educational initiative.

In addition, to create new manufacturing opportunities, Rockwell Automation Inc. and Autonox Robotics had also teamed up in May 2023. The partnership expanded and innovated robot mechanics, wherein Rockwell's Kinetix motors and drives were combined with Autonox's robot mechanics.

CEO Statements

Blake Moret, President and CEO of Rockwell Automation:

• "Manufacturers and industrial operators are discovering practical ways to apply IoT across their operations, and they’re deriving measurable business value as a result. Combining IoT technology and expertise in specific industrial applications enables better collaboration, faster problem-solving, and increased productivity."

Barbara Humpton, President & CEO, Siemens USA:

• "Industry 4.0 is not just moving from production A to production B. It’s actually shifting our minds to the idea of fundamentally reshaping how things are done. It’s being fully immersed in the possibilities created by the technologies we have available, exploring the art of the possible, and then exploring some more."

Recent Developments

Key players in the industrial software industry are pivotal in delivering a variety of innovative construction solutions, such as prefabrication techniques, sustainable materials, and advanced digital technologies. Some notable developments in the industrial software industry include:

• In June 2024, Paperless Parts and Hexagon's Manufacturing Intelligence division entered into a strategic partnership to accelerate the adoption of modern quoting software by advanced custom parts manufacturers. Through this partnership, Paperless Parts and Hexagon aim to provide technically advanced manufacturers with the tools to increase operational efficiency, increase revenue, and leverage modern software solutions. Using these tools will also help them improve the competitiveness and profitability of American manufacturing.
• In June 2024, Salesforce announced an LLM Benchmark for CRM to help companies evaluate the rapidly growing number of large language models (LLMs) for use in their customer relationship management (CRM) systems. The new benchmark is a comprehensive evaluation framework that measures the performance of LLMs across four key criteria: accuracy, cost, speed, and trust and security.
• In March 2024, GE Aerospace planned to invest US$650 million in its supply chain and manufacturing facilities to increase production and improve support for commercial and defense customers.

These advancements mark a notable expansion in the industrial software market, driven by strategic acquisitions and innovative projects. The focus is on boosting sustainability, enhancing construction efficiency, and broadening product offerings to meet diverse building needs.

Market Segmentation

By Type

• Product Lifecycle Management (PLM)
• Enterprise Resource Planning (ERP)
• Manufacturing Execution Systems (MES)
• CAD/CAM
• Supervisory Control and Data Acquisition (SCADA)
• Programmable Logic Controller (PLC)
• Distributed Control System (DCS)
• Privileged Access Management (PAM)
• Human Machine Interface (HMI)
• Production Process Management and Control

By Deployment 

• On-Premise
• Cloud-Based

By End-Users

• Manufacturing
• Energy & Utilities
• Transportation & Logistics
• Healthcare & Life Sciences

By Region

• North America
• Europe
• APAC
• LAMEA