BEATA SZABINA HERSKOVICS Marketing & Sales Specialist, IncQuery Labs
VDC SUMMARY
What Questions Are Addressed? 01
How is the COVID pandemic affecting spending on modeling tools?
04
02
Which verticals have proven most resilient to downturn and ripest for long-term growth?
05
How are Machine Learning and AI development needs impacting modeling tool use?
03
How does the future outlook for commercial modeling tools in the embedded/IoT market compare to projections for the enterprise/IT
06
In what ways will the evolving practices of engineers and software developers influence tooling decisions and preferences over the next few years?
Are recent lifecycle management vendor acquisitions influencing product innovation and tool selection?
sector?
07
How should modeling tool providers respond to best serve the needs of modern engineering teams?
Executive Summary $1.2B in 2019 - $1.6B by 2024
PLBM: $663.7M in 2019 $874.6M by 2024.
SLBM: $270.1M in 2019 $874.6M by 2024.
The global market for software and system modeling tools totaled $1.2B in 2019.
In 2019, the global embedded/IoT proprietary language-based modeling (PLBM) tool market totaled $663.7M.
SLBM tool revenue in the embedded/IoT market will increase at a CAGR of 6.0%, reaching $361.3M in 2024 from a base of $270.1M in 2019.
PLBM tool revenue will increase at a CAGR of 5.7% to reach $874.6M by 2024.
In 2019, the enterprise/IT SLBM market totaled $307.6M. This market will increase at a CAGR of 3.8% to reach $373.9M in 2024.
Much of this growth is driven by the PLBM tool market: automotive and aerospace and defense
Future growth and expanded tool adoption in the SLBM market will be contingent on both successful stewardship of SysML 2.0 solutions
medical- started to accelerate
as well as the broader evangelism of traditional
Modeling tool revenue growth will reaccelerate after the malaise of 2020 for an overall average compound annual growth rate (CAGR) of over 5% through 2024, reaching $1.6B. During the last recession, the modeling tool market contracted over 8% in 2009. / slight growth in 2020. Industry: move toward subscription licensing.
modeling tool value points, such as code generation, reuse, and time-to-market savings. leading vendors: invest into their premium solutions by heavy marketing& sales activities.
01-02 How the COVID pandemic affects the spending on modeling tools?
How do the trends look like?
the commercial market navigates the impact of
The pandemic impacted the most to the automotive
pandemic
market, causing a slowdown, but still growth is
periods of delayed and canceled projects
expected
increasing need of modeling tools Software and systems engineering tools – increasing, but the spending slow down SLBM growth slow downSLBM Enterprise/IT: lBM, Dassault give less and less attention- Opportunity) Increasing need for low-code development (Threat)
Automotive remains the top industry for
Americas can grow the best among the global market areas
embedded/IoT software and system modeling tool revenue, generating $265.0M in 2019, While rail is expected to generate an even faster rate of growth at a CAGR of 9.8% across the forecast period. (Opportunity) PLBM: more impacted by pandemic, still growing automotive and aerospace and defense, medicalstarted to accelerate PLBM market is primed for continued strong growth based on the utility of its participants’ technologies in addressing advanced system design and simulation.
Americas & EMEA
01-02
US-based development organizations simply continued their focus on their advanced projects Increased use of the tools in telecommunications, medical devices Subscriptionor extended term-based license deals
The PLBM tool market decreased slightly in 2020 in EMEA (covidautomotive)
PLBM US market higher than in the EMEA - slightly higher revenue than in the EMEA SLBM Embedded/IoT EMEA higher than in the US - also higher revenue SLBM Enterprise/ IT market is the same, both in the US and the EMEA, but the revenue is better in the EMEA
03 How does the future look for commercial modeling tools in the embedded/IoT market vs. the enterprise/IT sector? Enterprise/ IT SLBM The commercial enterprise/IT market – slowdown because of the adoption of low cost and alternative coding platforms.
The SysML 2.0
IT organizations look to lowcode platforms to fill some of the initial use
Future growth and expanded tool adoption in the SLBM market will be
cases of UML.
Easy-to-use Precision integration with other models and workflows contingent on both successful stewardship of SysML 2.0 solutions as well as the broader evangelism of traditional modeling tool value points, such as code generation, reuse, and time-to-market savings.
03 How does the future outlook for commercial modeling tools in the embedded/IoT market vs. the enterprise/IT sector? Embedded/IoT
Automotive remains the top industry for embedded/IoT software and system modeling tool revenue, generating $265.0M in 2019, MathWorks and IBM together represented just under half of all IoT/embedded market revenue in 2019.
2019-20: IBM - Rhapsody, chips 2019-20: Dassault and PTC had been pouring resources and focus into their legacy tool sets, driving their own growth and increasingly leveraging established PLM-led sales channels.
03 Vertical Forecast Aerospace/ Defense - minimal decrease, same Automotive - almost the same Industrial Automation - minimal increase Energy Power - increasing Rail/ Transportation - increasing
Market share remains quite same, big changes are not expected
03 Vertical Forecast
The market remains quite same Aerospace/Defense - slightly decrease Industrial Automation - slightly increasing Energy/Power slightly increasing Automotive - slightly increasing
03 Vertical Forecast
The market remains quite same Aerospace/Defense - slightly decrease Industrial Automation - slightly increasing Energy/Power slightly increasing Automotive - remains the same
03
Competitive Landscape by Technology
Biggest vendors: Mathworks+IBM 50% Followed by NI, Dassault, Ansys, dSpace around 6% shares
Tools Market Share: PLBM & SLBM 03
03
SLBM Embedded/IoT biggest vendors 85%: IBM 50%, Dassault 20%, PTC 15%
PLBM biggest vendors: Mathworks slightly more than half of the market Followed by NI 8% , dSpace around 6% market share
SLBM Enterprise/IT biggest vendors app. 80%: IBM 54%, Dassault 14%, Microsoft 10%
?
Acquisitions: Dassault acquired Geensoft in 2010 PTC acquired MKS in 2011 Ansys acquired Esterel in 2012 Organizations investigating in cross engineering domain integration.
04 Do recent lifecycle management vendor acquisitions influence product innovation and tool selection?
How are Machine Learning and AI development needs impacting modeling tool use? 05
IoT & AI IoT & AI Shaping Next Generation Projects Connected systems (IoT, M2M, Edge): Development and engineering organizations are rapidly reshaping the products they develop and the services they deliver through connected systems.
33%
of engineering organizations are deploying IoT capabilities.
Greater than 75% of respondents will fit that categorization by 2022 Even higher rate of modeling tool users report IoT alignment, demonstrating the correlation of utility for the more complex projects.
Recent Developments
2.5x more organizations are interested in IoT capabilities by 2022
Machine Learning The design and simulation of advanced systems will align itself with the use of modeling tools – with some PLBM tools already specifically geared to address those challenges. ML use is increasing a lot (already high adoption). Vendors should actively develop and market their solutions with ML.
Recent Developments Opportunity for us
05 Use of ML in current and future projects
06
In what ways will the evolving practices of engineers and software developers influence tooling decisions and preferences over the next few years?
07
How should modeling tool providers respond to best serve the needs of modern engineering teams?
MBSE practices
have
modernized
the
uses
and
commercial market for modeling tools in recent years. As development organizations look toward the future, they recognize a need for solutions to help them design and implement increasingly sophisticated projects. In many instances, established and enterprise-grade solutions such as modeling tools can help them accelerate innovation and drive development efficiency. Only 19% of modeling tool users reported projects behind schedule versus 30% of non-users. Likewise, modeling tool users reported projects lasting 14.4 months on average versus 15.5 months for those not using.
Engineering organizations are looking to: scale deployments integrate system design workflows address next-generation development challenges reduce project delays a better solution to reuse of coding low-code development auto-generated code accelerate time-to-market a better management of models – across and between modeling tools 33% of engineering organizations are deploying IoT capabilities.
And last, but not least:
Solve their integration challenges. 75%
of organizations report investigation or implementation of
cross-engineering domain integration versus 50% of engineers in 2010.
06-07
06-07 70% of Modeling Tools users have done an extensive research or some initial investigation or planning to use cross engineering domain integration. 12% already using
06-07
Modeling tool users show: a much higher use rate of cross-engineering domain integration a high rate of PLM tool use
Increasing amount of autogenerated code in the enterprise/IT sector. Code generation is a critical component of modeling tool value proposition that will resonate with the increasingly centralized purchasing decisions.
06-07 OSLC Open Services for Lifecycle Collaboration These same vendors attempted to evangelize at least the better management of models – across and between modeling tools.
18% of our survey respondents citing ‘integration challenges’
as contributing to their projects delay, representing the
4. most frequently cited issue out of 20
OSLC
PTC and Siemens
T h a n k
Y U