CAD and PLM Software Market Size & Share, COVID-19 Impact Analysis, By Deployment (On-premise and Cloud), By Industry (Discrete Industries – Automotive, Electronics, Heavy Manufacturing, Others (Aerospace and Defense, High Tech, and Others), Process Industries – Oil & Gas, Chemicals, Healthcare, Others (Pharmaceuticals, Petroleum, and Others)), and Regional Forecast, 2023-2030

The CAD and PLM software market size was valued at USD 14.51 billion in 2022 and is projected to grow from USD 15.47 billion in 2023 to USD 26.37 billion by 2030, exhibiting a CAGR of 7.9% during the forecast period. North America dominated the global market with a share of 33.22% in 2022.

Product Lifecycle Management (PLM) software enables multi-disciplinary, geographically-dispersed teams to strategically collaborate with partners and customers using up-to-date product information. It enables organizations to distribute, centralize, secure, and automate product data by standardizing the product development process. Furthermore, PLM software consolidates data, business systems, processes, and people related to product development. Computer-Aided Design (CAD) creates 2D and 3D models of real products digitally before manufacturing and producing them. PLM software was introduced with CAD software to support product development. PLM systems are CAD systems combined with Product Data Management (PDM) modules.

Deployment in the manufacturing and automobile industries enables visual prototyping, which further enhances the automotive supply chain, 3D CAD standards, design for manufacturing, automated drawing generation, and intellectual property protection. According to Tata Power, there are numerous concerns regarding the above stated functions and CAD integrated PLM aids in improving the drawbacks of 3D CAD software. Thus, increasing use of CAD software in automotive and manufacturing industries to boost the demand for CAD and PLM software.

COVID-19 IMPACT

Limited Deployment of CAD and PLM Software in SMEs during Pandemic to Slightly Hinder Market Growth

The widespread coronavirus limited the movement of goods, services, and people globally, affecting the overall economy and industries due to worldwide lockdowns, travel restrictions, and business shutdowns. With a temporarily hindered economy, organizations' investments in technological solutions such as PLM, PDM, CAD, and many others also decreased in SMEs as they were able to develop and design solutions without PLM software. Thus, temporarily slowing down the growth rate of the market.

Driven by the negative growth across industries, such as industrial equipment, automotive, high technology, aerospace, and others, the global market was also impacted negatively. However, with continued momentum around digital transformation, the market is projected to grow significantly over the upcoming years. For instance,

• According to an IDC report, investment in global digital transformation in 2020 reached USD 1.5 trillion, with investments from surging small businesses and large corporations.

Thus, an increase in the adoption of digital technology platforms and initiatives by governments for the digitalization amid COVID-19 pandemic is estimated to augment the CAD and PLM software demand.

LATEST TRENDS

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Digital Twin and Digital Thread Implementation in CAD and PLM Software to Enhance Market Growth

In the digital transformation era, new data challenges have appeared, and digital threads and twins offer solutions to improve the speed of decision-making across the value chain. In this context, a digital thread is a connection of related upstream and downstream product information from multiple systems across the enterprise. Digital twin is the physical representation of physical products.

According to PTC Inc., PLM is the key driving factor for the implementation of digital thread and digital twin. The core concept of PLM software is to streamline data between various 3D CAD software, store Bill of Materials (BOM), and change history.

• September 2020: Aras launched the Digital Twin Core solution to create and manage digital twins. The solution provides the necessary context to analyze the IoT sensor data streams for performance monitoring, predictive maintenance, and optimization scenarios.

These approaches are applied in PLM to aid CAD optimization, reduce cost, and accelerate the organization’s response to latest customer needs, which aid in expanding the market size and propel growth.

DRIVING FACTORS

Rising Smart Manufacturing with the Adoption of IoT Technologies and 3D Printing/Modeling to Drive the Adoption of CAD and PLM Software

Automotive and manufacturing industries face a lot of pressure to innovate and produce high-end consumer goods while reducing product timeline. Implementation of IoT devices have improved the rate of production significantly by automating manual and hard labor processes. In 2021, IoT as a Service was implemented by 28.0% of the global industries and its key benefits include improved product designs, product quality, customer satisfaction, and manufacturing lead times. .

The software provides data stability to manufacturing industries, which enhances 3D printing modeling, productivity, and innovation, resulting in deployment of high quality, modern compliant, and quick and innovative product line-ups. It also enhances manufacturing lines by accelerating the production time and delivering real-time insights.

• December 2022: Siemens announced deployment of Teamcenter PLM into semi-conductor manufacturing industry, which is estimated to enhance data management, quality, and revision control.

Thus, numerous manufacturing and automotive industries are implementing PLM along with CAD to enhance their business models, which is fueling market growth.

RESTRAINING FACTORS

Disconnected Systems and Siloed Departments to Hamper the Market Growth

PLM technology benefits the whole product lifecycle and is expanding rapidly in areas such as manufacturing, production, engineering, quality management, and operations.

With the increasing volume of product data, the complexity increased, and many challenges arose. Developing such complex products is prone to many challenges, including data quality, product complexity, disconnected systems, processes, and others.

• A study by Aberdeen Group shows that the most challenging factor of today's development process is disconnected systems across the enterprise. With the integration of many processes and departments, the complexity rises. This in turn hampers in maintaining data and product quality.

Large manufacturing enterprises often face objections in aiding effective collaboration amongst the distributed teams to manage CAD and other development processes.

Moreover, an unproductive way of administering product development information with multiple systems often results in development errors, extension in timeline, and poor product quality. While most large industrial companies have implemented PLM technologies by integrating CAD and enabling design management and development processes, the others lack capabilities in managing present convoluted market dynamics.

Additionally, complex upgrades and difficulty integrating with enterprise business systems are still a concern in this market.

SEGMENTATION

By Deployment Analysis

Global Surge in Integration of Cloud-based PLM Deployment and Web-based Software Hosting to Propel Growth of the Segment

Product Lifecycle Management (PLM) software can be deployed via on-premise and cloud models. Cloud-based solutions are projected to dominate the market share while exhibiting the highest CAGR during the forecast period. Industrial users had privacy concerns regarding their product data; hence, cloud deployment of PLM solutions has not been drastically increased. However, lately, under cloud services, the vendors are provided with Software-as-a-Service (SaaS) solutions to host their PLM software and integrate it with CAD solutions.

According to Accenture, enterprises can avoid and reduce their total cost of ownership by 40% by migrating their business models and products to cloud infrastructure. Similarly, 80% of enterprises are utilizing multiple cloud services, including public and private data storage centers among others.

A cloud-based PLM delivers numerous benefits, including decrease in capital investments and offers scalability, while empowering smarter innovation, and accelerating product development. Dassault Systemes stated that deployment of CATIA through cloud services enables clientele enterprises to reduce management and setup costs while accelerating process development by avoiding initial infrastructure setup and investments in hi-tech computing systems. Similarly, numerous other vendors, such as Aras, Autodesk, and Siemens AG, are deploying cloud-based PLM software to enhance productivity among industries. For instance, Siemens provides Teamcenter PLM through the AWS cloud, which reduces the consumer workload by handling virtualization, servers, storage, and networking. The on-premise deployment includes management of above-stated factors with additional middleware and application deployment.

By Industry Analysis

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CAD and PLM Capabilities in Discrete Industry to Propel the Market Growth

Based on industry, the market is segmented into discrete industries – automotive, electronics, heavy manufacturing, others (aerospace and defense, high tech, and others) and process industries – oil & gas, chemicals, healthcare, and others (pharmaceuticals, petroleum, and others).

PLM software is widely used across discrete as well as process industries to aid manufacturers in their product development process. Discrete industries include assembling parts in a prescribed process to produce a distinct item. In the scope, we have considered discrete industries such as automotive, electronics, heavy manufacturing, and others.

According to NIST, discrete manufacturing accounts for 36.0% of the U.S. manufacturing. Thereby, CAD and PLM software adoption is increasing in discrete industries such as automotive, electronics, and high-tech, and others.

Correspondingly, the automotive industry dominated the global market with the largest market share in 2022 and is estimated to grow with a healthy CAGR during the forecast period. The industry is also significantly expanding and projecting growth in the North America region. Economic growth in the region has a direct impact on automobile and commercial vehicle sales, so CAD and PLM software is primarily used during the product development stage, which begins long before automobiles are manufactured.

According to the American Automobile Policy Council's (AAPC) 2020 Economic Contribution Report, American automakers have exported more than USD 1.100 trillion in vehicles and parts over the past decade, making it the second largest exporter (aerospace) about USD 36.0 billion.

REGIONAL INSIGHTS

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In our research, we have evaluated the geographical aspects of the market into five regions, North America, South America, Europe, the Middle East & Africa, and Asia Pacific. These regions are further categorized into several dominating countries.

North America dominated the global market share in 2022. Increasing deployment of cloud-based applications and services is among the key factors impacting the market growth in North America. Our cloud computing market analysis suggests that North America dominated the global cloud computing market in 2021, and is expected to generate the most revenue among other regions, which is USD 262.44 billion in 2021. For instance,

• America Makes, a leading joint partner in Additive Manufacturing (AM)/3D printing technology (3DP) and talent development, chose to adopt AWS as a cloud provider and leverage the Siemens PLM Teamcenter application for its digital storefront. The company saved approximately USD 30.0 million with respect to developing an in-house solution.

Moreover, the automotive industry accounts for 3% of North America’s GDP and generates more jobs than other departments resulting in 1,251,600 people employed by the automobile industry in 2021. The market is well-developed in North America with the highest market share as of 2022.

The Europe CAD and PLM software market share is driven by the substantial rise of industry 4.0 and IoT. Also, Industry 4.0, a national strategic initiative invented by the government and the Ministry for Economic Affairs and Energy (BMWI), emphasizes digitization, product interconnection, value chain, and business models. This is projected to increase CAD and PLM software role in smart manufacturing factories. The Europe market is estimated to grow with a CAGR of 7.9% during the period of 2023-2030. Eurostat, the European Union's statistical office, estimates that seasonally adjusted industrial production in June 2022 increased by 0.7% in the Eurozone and 0.6% in the EU compared to May 2022. Industrial production increased by 2.1% in the Eurozone and 1.9% in the EU in May 2022.

Furthermore, Germany possesses a well-developed industrial sector and is a producer of automobiles and machinery. The country is also known for its high-tech manufacturing capabilities and exceptional quality of goods, due to substantial investments within educational, and research and development sectors. Thus, various industrial advancements and developments in Germany are expected to positively impact the region’s CAD and PLM software.

Middle Eastern countries are undergoing a technology-led transformation to diversify and move away from their reliance on oil. For instance, Saudi Vision 2030’s push for digitalization, aids in boosting social and economic development, increases investments in technology, and develops more localized supply chains.

GSMA predicts that the IoT network of connected devices in the MENA region will significantly increase in growth, and is estimated to grow 2x by 2025. It is driven by growth in the industrial market, particularly for smart building solutions and smart manufacturing. Additionally, the governments of Saudi Arabia and the United Arab Emirates are increasing investments in digital manufacturing, intelligent design, and CAD/CAM software, strongly boosting the market growth of the GCC. Saudi Arabia attributed to and 35% of vehicles sold in the MENA region and about 52% of vehicles in the Gulf Cooperation Council (GCC) in 2020.

Numerous initiatives, such as the Southeast Asian Manufacturing Alliance (SMA) and the Regional Comprehensive Economic Partnership (RCEP), connect businesses with a network of trusted partners to confidently navigate and grow the diverse Southeast Asian region. RCEP in particular enables economic integration with around 30% of the world's population. As Southeast Asia evolves into a manufacturing and logistics hub with a low-cost base, the digitization of manufacturing processes is also central to its future strategy, with Industry 4.0 adoption becoming the norm.

• For instance, Siemens is actively promoting manufacturing excellence initiatives in India, fully aligned with the Prime Minister's Make-In-India campaign. With its differentiated initiative for the digital transfer of technical knowledge, Siemens hopes to reach out to many young people across the country and enable them to contribute to India's manufacturing excellence.

Thus, the above factors are driving the CAD and PLM software market growth in the region.

KEY INDUSTRY PLAYERS

Launch of Innovative Offerings and Organizational Improvements to Enhance the Market Growth

With the implementation and deployment of cloud, numerous key players are engaging their clientele with the latest technologies. Key players are increasing cloud based deployment with additional functionalities and integrations. Integrations to third party CAD software solutions enable small and medium enterprises (SMEs) to purchase a unified platform while avoiding extra expenditure. Players are also integrating numerous applications such as workforce management, ERP, and chain supply management to improve and expand use cases.

• March 2022 – Essig PLM, a provider of PLM software, announced ProductCenter Nexa PLM. It featured scalability and reliability while providing extra functionalities such as document management, BOM management, and user-friendly interface. It is designed with numerous integrations to add support for small and medium-scale enterprises (SMEs).

Thus, the inclination of major players toward enhancing their own existing CAD software and launching cloud-based solutions in the market and usage of advanced technologies are expected to drive the market in the coming years.

 List of Key Companies Profiled:

• SAP SE (Germany)


• Autodesk Inc. (U.S.)


• Dassault Systemes (France)


• PTC Inc. (U.S.)


• Oracle Corporation (U.S.)


• Siemens AG (Germany)


• Infor Inc.  (U.S.)


• Aras Corporation (U.S.)


• Propel Software Solutions Inc. (U.S.)


• DuroLabs (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• September 2022 – PTC launched a new product coined ‘Onshape-Arena Connection’, which connects Arena Solutions Product Lifecycle Management (PLM) and Onshape Product Development. This accelerates data sharing, which aids organizations to improve product development processes and maintain partnerships with supply chain partners.


• September 2022 – Aras Corporation partnered with AVEVA, which is a provider and developer of digital software, offering digital transformation and sustainability. The partnership resulted in the development and licensing of Asset Lifecycle Management, by integrating Aras Innovator Platform.


• August 2022 – Autodesk launched Fusion 360 Manage with Upchain, which is an integration of acquired PLM software with the CAD solution. This enables organizations to purchase all-in-one products at a single price.


• February 2022 – Oracle Cloud PLM partnered with GoSaaS CAD Vault, which is a computer-aided design (CAD) software provided by GoSaaS. This partnership led to integration between CAD and PLM which provided capabilities such as the generation of BOM data and BOM data extraction.


• December 2021 – Renault partnered with Dassault Systemes, to deploy CATIA as their CAD platform. Later, Renault made a large investment to integrate Dassault PLM into CATIA for further design and development advantage.


• January 2021 – Minerva launched Minerva DevOps, which is a PLM implementation suite for Aras Innovator and Minerva PLM. This resulted in business growth for Aras Corporation by providing PLM integrations.

REPORT COVERAGE

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Our analysis on this market provides intuitive business insights on global regions to improve business decisions and judgment, considering the market. Furthermore, the report provides key insights into recent developments of the market trends and industry as well as a thorough review of emerging technologies which are being adopted worldwide. It also emphasizes the major growth-stimulating factors and elements, which allow the reader to obtain an in-depth perception of the market.

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