< Key Hightlight >

The global simulation software market size is expected to grow from USD 12.7 billion in 2020 to USD 26.9 billion by 2026, at a Compound Annual Growth Rate (CAGR) of 13.2% during the forecast period. The major factors fueling the simulation software market include increasing demand for effective solution to reduce production expenses and training costs and increasing capabilities of simulation with regards to advanced technologies such as digital twins, AR/VR, and 3D printing. Further, increasing investment in industry such as aerospace and defense, and requirement of simulation in healthcare to develop and produce effective vaccines for diseases like COVID-19 is expected to be fuel the market growth in coming years. 

Simulation is a computer-based model, which depends on the principles of mathematics and physics. It enables the designing, validation, and optimization of products and solutions. It can also be considered as a tool used for various applications, such as Research and Development (R&D), product engineering, and gamification. Enterprises are getting attracted toward the simulation and analysis technology because it enables design verification and validation for the R&D activity. Simulation is also useful for learning and training purposes, as it is flexible, accelerates learning, and improves core skill sets. To be competent in the market, enterprises are increasing focus on R&D activities.

The simulation software market includes various vendors that provide software and services to process industries across the globe. Companies, such as AVL, MSC Software, Siemens, PTC, and Dassault Systemes among others, have adopted organic as well as inorganic growth strategies, including partnerships, agreements, and collaborations to expand their footprint in the global simulation software market. Several key vendors are launching new solutions and enhancing the existing solutions related to the simulation across the region, which is expected to boost the growth of the simulation software market.

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COVID-19 Impact Analysis on Simulation Software Market

The COVID-19 pandemic has affected every segment of society, including individuals and businesses. The internet ecosystem has been playing a pivotal role all over the globe. Due to the COVID-19 pandemic, the dependency on online businesses has increased significantly. BFSI, healthcare and life sciences, manufacturing, automotive, retail, transport, and logistics, among others, are leveraging the internet to provide necessary services to consumers. Simulation software is a tool used to virtually create a real-time environment to test the efficiency and applicability of different products. Vendors have experienced an increased demand for simulation solutions post the pandemic. Simulation software is to analyze the spread of the virus, and the effectiveness of social distancing. The restrictions imposed by governments in response to the COVID-19 pandemic have encouraged employees to work from home, and even ‘stay at home’. Consequently, technology has become even more important across working and personal lives. Despite this rising of technology needs, it is noticeable that many organizations still do not provide a ’cyber-safe’ remote-working environment. Where business meetings were traditionally held in-person, most now take place virtually. The simulation software vendors are actively making efforts to combat the COVID-19 situation by offering simulation analysis pertaining to the spread of the disease. Further, the vendors have also introduced new products and services to maintain its competitive position in the market. The use of simulation software is enabling automobile manufacturers to test multiple vehicle models in a simulated environment before determining and finalizing the final vehicle. The benefits of simulation software such as a reduction in production expenditure and reduced costs of training are expected to drive the market for simulation software.

Market Dynamics

Driver: Increasing instances of cloud breaches due to its misconfiguration

The simulation software helps reduce production and training costs and simultaneously improves operational performance. Several big companies have collaborated or acquired simulation companies to implement simulation solutions. For instance, Deloitte Consulting partnered with Simio to implement a simulation process and reduce operating costs for an HVAC manufacturer. Bentley Systems acquired Citilabs and Orbit Geospatial Technologies for the expansion of its analytics and mobile simulation software. Simulation processes help solve problems before prototypes are prepared. Ansys entered into an agreement with Lumerical, one of the leading developers of photonic design and simulation tools. The agreement will help Ansys have a wide range of photonics products and provide customers with a full set of solutions. Various verticals, such as automotive, aerospace and defense, electrical and electronics, industrial manufacturing, and healthcare, have adopted simulation solutions and services to not only save expenses but also to save human life. According to the US Bureau of Labor Statistics, several deaths and accidents occur on construction sites due to the fault of equipment and vehicles. Inexperienced operators on machinery can be risky for any on-the-job training. Hence, computer-based simulation has emerged as an efficient training solution. Simulation software has advanced to the same level of sophistication as that of a real machine. For instance, flight simulators, a simulation technology, which is now a mandatory training component for pilots to obtain and maintain their license.

Restraint: Complexities in integrating software and increasing data security concern

Developers and testers always encounter a situation where the simulation model performs effectively during testing but fails in real-time situations. Such discrepancies are known as data leakage. Data leakage refers to an error caused by sharing information between test and training sets. The test set should simulate unseen data in a real-life situation, whereas the training set consists of data run on the system previously. Since developers have access to both train and test data sets, thus data leakage is often seen in most cases due to human faults. Data leakage leads to an unexpectedly high result in the simulation process, which misleads enterprises or organizations to implement those in real world scenarios. This, in turn, affects the simulation process along with the overall costs.

Opportunity: High spending on simulation in aerospace, healthcare, and defense

High spending on aerospace and defense globally has given an opportunity for innovation and implementation of the simulation software. The military often uses war games to train soldiers that require military simulation software technologies. The US Army has implemented virtual reality simulation technology for such training purposes. The incorporation of advanced technologies, such as AI and ML, can help military simulation software to become more efficient. Companies, such as Entrust Solutions, have come up with innovative simulation solutions to leverage this opportunity. Owing to COVID-19, there is a good opportunity for the growth of the simulation software market, especially in the healthcare sector. Simulation modeling can provide organizations with strategies to respond quickly, safely, and effectively. For instance, according to Ansys, simulation can be used to design UV light treatment systems for various environments and ensure sufficient doses of UV light are delivered to deactivate viruses.

Challenge: Lack of standard benchmark to measure outputs

The adoption of standardized benchmarking systems can help researchers better leverage recent technological innovations. Despite having an efficient MBS simulation tool, there is a lack of a standard benchmark to measure such software applications. MBS simulation tools support designing virtual prototypes of machinery, road and rail vehicle design, robotics, and even spacecraft control. Owing to the absence of benchmarking methods, it becomes impossible to compare performance of different available simulation methods, creating a challenge for companies.

Software segment to have highest market share during the forecast period

Simulation software is an essential component of a Computer-Aided Engineering (CAE) process. It helps engineers and product designers to evaluate, optimize, and compare their product designs and prototypes by modeling events in real-world computer-generated environments. Simulation software creates a model governed by equations and mathematical data and place it in a pre-defined system. By analyzing these models, engineers can observe the system interaction with the real-time scenarios, and predict its performance, defects, stresses, and product lifespan. Simulation software vendors are integrating simulation models with digital twin, digital additive manufacturing and networking, and communication. These integrations are expanding the capabilities of simulation software, thereby attracting various verticals such as automobile, healthcare, and pharmaceuticals and construction.

Healthcare and Pharmaceuticals vertical to grow with the fastest growing CAGR during the forecast period

Applications of routine structures and common repetitive practices of healthcare can be fully automated and validated using simulation and technology. The healthcare simulation ensures real medical practices. Simulation is also used as a learning practice by doctors. The healthcare simulation can also be used in the aviation industry, fire departments, and military. For instance, Dassault Systemes offers the Living Heart model for the study of congenital defects. The Living Heart model helps modify shape and tissue properties of the heart virtually. In healthcare, simulation software serves use cases such as drug or medicine development process, streamlining of clinical trial, laboratory and supply chain process, optimizing manufacturing resources, and reducing waste. The increasing cases of critical illnesses, such as stroke, cancer, and multiple sclerosis, require continuous development in drugs and medicines to cure the diseases with more accurate results.

North America to hold the largest market size during the forecast period

North America being the early adopter of simulation technology, is the major revenue-generating region in the global simulation software market. The increase in the application of the simulation and analysis across verticals are the key driving factors for market growth. Most of the key vendors have established their organizational bases in North America. The region has become one of the leaders in innovations, R&D as well as technological advancements in the simulation software market in North America. The top contributing countries to the simulation software market in the region are the US and Canada.

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Asia Pacific to grow with fastest growing CAGR during the forecast period

APAC is expected to witness extensive growth opportunities in the manufacturing and IT sectors during the forecast period. The existence of large population, developing infrastructure and technology and affluence of source are the major factors contributing to the growth of the simulation software market in the region. The government of India and China have been accelerating manufacturing sector for developing and verifying cars, IT-related products and solutions, and defense equipment. High market growth is also anticipated due to technological advancements and utilization of the simulation and analysis technology. The rapid expansion of the domestic market, as well as global enterprises in the region, is also an important factor in the growth of simulation software market in the region.

Key Market Players

Major vendors in the global simulation software market include MathWorks (US), Autodesk (US), Ansys (US), Siemens AG (Germany), PTC (US), Dassault Systemes (France), Altair Engineering (US), MSC Software (US), Honeywell (US), Keysight Technologies (US), Aveva (UK), Spirent Communications (UK), Bentley Systems (US), Synopsys (Canada), AVL List GmbH (Austria), COMSOL (England), Certara (US), CAE (Presagis (Canada)), aPriori (US), PTV Group (Germany), AnyLogic (US), SimScale (Germany), Scalable Networks (US), Simul8 Corporation (UK), FlexSim (US), MOSIMTEC (US), Simio (US), ProSim (US), Cybernet (US), and Cesim (Finland).

Scope of the Report

This research report categorizes the Simulation software market to forecast revenues and analyze trends in each of the following subsegments:

Based on Component:

• Software
  • Software Types
    • Finite Element Analysis
    • Computational Fluid Dynamics
    • Electromagnetics Simulation
• Professional Services

Based on Application:

• Product Engineering
• Research and Development
• Gamification

Based on Deployment:

• On-Premises
• Cloud

Based on Verticals:

• Automobile
• Aerospace and Defense
• Electrical and Electronics
• Healthcare and Pharmaceuticals
• Oil and Gas and Mining
• Construction
• Ship Buildings and Marine
• Chemicals
• Other verticals

Based on Region:

• North America
  • United States (US)
  • Canada
• Europe
  • United Kingdom (UK)
  • Germany
  • Rest of Europe
• APAC
  • China
  • Japan
  • India
  • Singapore
  • Rest of APAC
• MEA
  • United Arab Emirates (UAE)
  • South Africa
  • Rest of Middle East and Africa
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America

MathWorks:

Founded in 1984 and headquartered in US, MathWorks offers a mathematical computing software for algorithm development, data analysis, and visualization and numeric computation. The company offers a wide range of design and development products for automotive, aerospace, telecommunications, electronics, industrial manufacturing, and healthcare verticals. MathWorks’ products have been installed across the globe in 80,000+ universities and governments for designing and developing their systems.

Key Development:

• In February 2021, MathWorks partnership with Aimotive, an automotive vehicle technology company. The partnership will help MathWorks add RoadRunner tool of AImotive into its aiSim, an automotive-grade simulation platform for end-to-end testing of automated driving software.
• In September 2020, MathWorks launched updation in its software named as Simulink 2020b. The enhanced Simulink 2020b focuses on expanded access and speed, including the launch of Simulink Online for access through web browsers.
• In January 2019, MathWorks launched a new flight analysis and visualization capabilities for aerospace design. Aerospace Toolbox enabled users to customize the interfaces featuring cockpit flight instruments and to visualize and analyze the motion and behavior of aerospace vehicles.