Matching CAD Software with Manufacturing Requirements

Market Overview

• The CAD software market will grow from US$7.9 billion in 2023 to US$15.8 billion in 2033 (a 7.2% Compound Annual Growth Rate (CAGR)) as additional functionality, integration with independent applications, and new deployment methods evolve.
• Currently, 86% of the revenue for the CAD market comes from Autodesk (24.4%), Dassault Systèmes (34.82%), PTC (10%), and Siemens (17.57%).
• The current driver of revenue growth is the consolidation of CAD into platform systems. Platform-as-a-Service (PaaS) offerings continue the push of digitalizing factories and benefit manufacturers by allowing them to incorporate manufacturing operations software to boost productivity. Industrial metaverse and Augmented Reality (AR) will also be significant drivers for revenue growth as companies build out supporting CAD functionality.
• A notable metric in the CAD software market is the directional shift of which regions will create revenue in the future. Europe and the Americas will still be the largest regions for CAD revenue in 2033, as most products are designed in these regions and then manufactured in Asia-Pacific. Asia-Pacific will see a slight decline over the next decade, as this trend of designers operating out of Europe and the Americas continues.
• According to the forecasts compiled by ABI Research, Europe accounts for 46.17% of the CAD market revenue in 2023, followed by the Americas at 35.35%, and Asia-Pacific at 18.67%. In 10 years, the Americas will lead the way at 45.86% market share, Europe at 40.16%, and Asia-Pacific at 14.32%.

“In order for smaller CAD providers to compete with Autodesk, Dassault Systèmes, PTC, and Siemens, additional deployment methods must be addressed. On-premises software has been the mainstream approach for vendors outside the top four; however, repositioning software to be deployed in the cloud as a SaaS product would level the playing field.” – James Iversen, Industry Analyst at ABI Research

Chart 1: CAD Market Revenue Share by Region in 2023

(Source: ABI Research)

Chart 2: CAD Market Revenue Share by Region in 2033

(Source: ABI Research)

Key Decision Items

These sections provide strategic recommendations for CAD software providers and manufacturing CAD users.

Build Out a CAD Portfolio That Includes CAE, CAM, CAP, and CAQ to Offer Comprehensive CAx Software If Not Already Done

Customers looking to scale business operations will be interested in a consolidated business platform where all usable applications can reside for the most efficient operating procedure. The additional functionality of Computer-Aided Technology (CAx) software will increase subscriptions and allow for a higher Average Selling Price (ASP) as more functionalities equate to higher costs for the user.

Additionally, making pricing structure as flexible as possible with modular, pay-as-you-go, and tokens as options will go a long way to securing more price-sensitive or hesitant clients.

Include Design for Additive Manufacturing (DFAM) and PCB Operations in the CAD Software

Additive manufacturing and Printed Circuit Board (PCB) design are not commonplace CAD functionalities for all market vendors, so adding these capabilities would be a significant differentiation. Adding robust Design for Additive Manufacturing (DFAM) and PCB design capabilities to CAD software will open the door to new manufacturing markets, such as Three-Dimensional (3D) printing shops and small electronics providers.

Providing an in-house CAD solution with these functionalities, along with traditional Mechanical CAD (MCAD), Electronic CAD (ECAD), and simulation capabilities, would maximize market scope and competitiveness. Alternatively, look for smaller companies building niche CAD solution software in expanding spaces, such as battery design, microchips, and semiconductors for potential acquisition.

Invest in Robust Training and Pipeline Development Programs

Educational facilities, such as high schools and colleges, are the epicenter of future CAD talent and expanding partnerships. Moreover, training camps enable more engineers and designers to operate CAD software. Manufacturing companies are likely to prefer software that employees can operate on day one.

The next two sections take a look at how manufacturers should approach implementing CAD software.

Identify Manufacturing Needs and Do Not Overpay for Unused Services

More functionalities do not correlate to better products or increased revenue if software capabilities are unfamiliar to an employee base. Take inventory of specific manufacturing operations to see if specialized CAD functionality is required, and determine if designers are equipped to use the functionality in an effective manner. For this, take a look at smaller software providers that often provide CAD with the essential functionality (e.g., Two-Dimensional (2D), 3D, simulation, rendering) as a cheaper option than incumbent providers.

Seek Out Software Providers That Align with Business Needs

If price is the determining factor, explore providers that offer custom payment plans, specific functionality pricing, or non-binding monthly subscriptions. Consider CAD deployment methods, such as on-premises, hybrid, or Software-as-a-Service (SaaS). Each has varying degrees of utility that need to be assessed before purchasing. For example, on-premises software is the most expensive; however, it provides the lowest latency periods for efficient operations. SaaS benefits from the use of the cloud, enhanced collaboration, compute power, and scalability.

Key Market Players to Watch

• Alibre
• Altium
• Autodesk
• Bentley
• Chemstations
• Dassault Systèmes
• Hexagon
• IronCAD
• LibreCAD
• PTC
• Siemens
• TurboCAD
• VariCAD
• ZWSOFT

Dig Deeper for the Full Picture

For a more detailed discussion on the manufacturing CAD software market—including revenue forecasts, product design trends, and vendor analyses—download ABI Research’s Digital Transformation in Product Design and Engineering Innovation report. This research product will help CAD software providers develop products and delivery models that match manufacturers’ needs, while manufacturers will better understand technological evolution in this rapidly changing industry. Download the report today!

You may also enjoy reading the competitive assessment highlight Selecting the Right Mechanical CAD Software Supplier for Large-Scale Manufacturing.

This content is part of our Generative Design Research Spotlight.