Industrial Software Applications Spend to Top US$27 Billion in 2024
Plenty of opportunities for all types of suppliers to meet manufacturers’ appetite for data
London, United Kingdom – Factories today run on data. To harness that data, manufacturers are turning to software applications such as Electronic Resource Planning (ERP), Manufacturing Execution Systems (MES), Manufacturing Operations Management (MOM), Product Lifecycle Management (PLM), Inventory Management, and CRM and Demand Planning. The spend in the industrial and manufacturing sector on these applications is set to grow from US$18 billion in 2019 to just over US$27 billion in 2024, finds global tech market advisory firm, ABI Research.
“Data underpins activities such as onboarding raw materials, optimizing the production line, organizing the facility, and even to understand clients and the final customer,” says Michael Larner, Principal Analyst at ABI Research.
ERP systems account for over fifty percent of the spend as they provide customers with a single solution to monitor activities on the production line, to understand the firm’s ability to fulfill orders as well as automate many back-office functions. MES software is expected to be the highest growing segment as manufacturers look to optimize the performance of individual machines and the production line. The spend on MES is forecasted to grow by 13.5% CAGR and be worth US$2.3 billion in 2024.
A diverse mix of vendors are targeting the industrial markets including software giants Oracle, Salesforce, and SAP, and those with a heritage in industrial manufacturing such as ABB, GE, and Honeywell. The vendor mix includes others with an industrial focused software portfolio, such as Dassault Systèmes and Siemens, and start-ups like Katana and Archdesk, which are helping smaller manufacturers scale. “Supplier propositions are evolving. For example, ERP suppliers continue to add modules such as MES and MOM while inventory management providers are adding demand planning capabilities. Both are blurring segment definitions,” Larner adds.
The software applications no longer just provide data regarding the current conditions. As a result of suppliers investing in AI and machine learning, the applications’ analytical capabilities can help manufacturers plan for future scenarios in their facilities and the wider operating environment.
“Data now flows from the production line to the boardroom and, thanks to APIs, between the software applications. Manufacturers should partner with system integrators to design and assemble their data jigsaw,” Larner concludes.
These findings are from ABI Research’s Software Applications in the Manufacturing Setting application analysis report. This report is part of the company’s Industrial & Manufacturing research Service. reports present in-depth analysis on key market trends and factors for a specific technology.