The high cost associated with software coupled with risk associated with data loss is expected to pose a challenge for the overall market during the forecast period.
The simulation software market is witnessing robust growth during the forecast period. The increasing technological development coupled with rising demand from various end-user industries is expected to be major reason for the growth of the simulation software market during the forecast period. Additionally, the high application of simulation software in automotive industry reduces the manufacturing cost which indirectly drives the market growth of the simulation software. Moreover, the advent of technologies such as artificial intelligence and robotics is also expected to fuel the market growth of the simulation software over the forecast period.imulation software market is anticipated to expand at a CAGR of 8% over the forecast period. The market is expected to attain a total value of USD 18 billion by 2027.
The market is segmented on the basis of software, services and end-use industry. On the basis of software, it is sub-segmented into on-premise and cloud. On-premise is anticipated to be the leading sub-segment during the forecast period. The high application of on-premise deployment in various end-use industries is major reason for the growth of the sub-segment. However, cloud based sub-segment is expected to register highest CAGR during the forecast period. On the basis of services, it is sub-segmented into consultancy, training and others. On the basis of end-use industry, it is sub-segmented into automotive, aerospace & defense, healthcare, semiconductor and others.
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Automotive is anticipated to be the leading sub-segment during the forecast period. The high application of simulation software in design of various parts of automotive components is expected to be a major reason for the growth in sub-segment. For instance, according to Indian brand equity foundation, the total number of automobile produced was 24 million in 2016 and it is to grow by 29 million in 2018.
The high adoption of simulation software in various end-use industries is anticipated to be a major driver for the overall market during the forecast period. Aerospace and defense has the high application of simulation software as it enhances the safety and security of military personnel.
The increasing technological development coupled with the advent of big data is driving the simulation software market. The technological development is expected to enhance the features associated with simulation software .It increases the scalability and reduces the complexities associated with software.
Our-in depth analysis of the global simulation software market includes the following segments:
On the basis of regional analysis, global simulation software market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America and Middle East & Africa region.North America is expected to be the largest region for overall market during the forecast period. The increasing technological development coupled with high adoption of simulation software is expected to major reason for increase adoption of simulation software solutions.
Asia-Pacific region is expected to be the fastest developing region for overall market during the forecast period. The increasing industrialization coupled with the expansion of various end-use industries is expected to boost the growth of overall market. Additionally, increasing government initiative is also driving simulation software market in region. For instance, according to SIPRI (Stockholm International Peace Research Institute) total military expenditure by China in 2015 was 204 billion and was 228 billion in 2017. Thus growing expansion of military expenditure is expected to boost the growth of aerospace & defense sub-segment.
Global simulation software market is further classified on the basis of region as follows:
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Author Credits: Abhishek Verma, Hetal Singh