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We have published a new market research report on materials modelling software. The report provides a focus on the study of materials in any field by any type of physics-based model. It furthermore delineates materials modelling from the wider Computer-Aided Engineering and Cheminformatics markets that have been the subject of numerous studies. Based on data gathered about 72 software companies and codes we arrive at a market size of €339.5m, with roughly 75%/25% share due to continuum and discrete (electronic/atomistic/mesoscopic) modelling, respectively. The discrete modelling market is served by a wider range of providers in terms of size with nearly half of the market still captured by SMEs while 89% of the continuum modelling market is served by large enterprises due to the very large size and wide use of their continuum modelling packages. We also note that despite some M&A activity in recent years, the discrete and continuum markets are still largely served by distinct players rather than integrated providers. Tentative figures for market dynamics indicate a long term growth in the discrete modelling market of about 5% in contrast to a roughly 10% pa growth in continuum modelling. We conclude by arguing that there are likely to be substantial changes ahead due to further integration of materials into CAE combined with a strong growth in data-based, machine-learning methods for materials.
We recently published a White Paper on Materials Modelling Software Business. Key findings are:
- A variety of business models are identified, mostly based on a hybrid software and services approach. Software sales as well as subscription licenses in combination with a range of services (from initial implementation to contract research) are the predominant revenue mix.
- Services play a significant role, with income ranging from 20-80% in many cases. Target software to services ratio is in the range of 70-80 / 30-20. Services are not as scalable but a substantial amount seems required due to the complexity of the software and science.
- Software as a Service (SaaS) is still in its infancy in the materials modelling field. Ways of overcoming industry reservations with SaaS (e.g. security concerns) should be found since SaaS can greatly reduce software maintenance costs and provide a faster route for new features to get to users. Also, SaaS would help to reach small and medium enterprises.
- New businesses developing services or SaaS based on proprietary software is somewhat hindered by the lack of business and licensing models between Software Owners and SaaS provider.
- There is opportunity for Materials Modelling Marketplaces but also reservations in particular regarding customer relations.
- Working closely with customers (via services and consortia etc.) is important to uncover why they are using your software and what it takes to retain them as well as to fund new developments.
- Sustainability of software requires a change in education and better recognition of the persons in charge. Lifecycle of software requires substantial rethinking and a vision for the future as software’s age reaches decades.
- It is important to engage with the academic community, find ways to make software engineering more exciting and bring in new standards to make software sustainable and maintainable.