A boom in global corporate spending on industrial asset management software (IAM) will take spending sharply higher — reaching $11 billion by 2026 — according to an exclusive survey from leading independent research and advisory firm Verdantix.
The increase in spending on IAM software will track digital transformation strategies adopted after COVID-19, helping cut costs and meet refreshed environmental social and governance criteria. Running at a compound annual growth rate of 10% from the $7 billion spent last year, it will reflect how key decision makers retain and expand new business resilience techniques from the pandemic, especially to control expenditure on maintenance.
Verdantix’s Market Size And Forecast: Industrial Asset Management Software 2021-2026 (Global) report shows that the manufacturing and oil and gas sectors will continue to dominate IAM spending, but that the fastest pace of growth will be among power generation and distribution companies. It reveals a spate of merger activity as demand for data analytics to demonstrate sustainability reverberates through the market.
Malavika Tohani of Verdantix said: “Brought about by the COVID-19 pandemic, a paradigm shift in how the world operates is underway. Increasingly prominent cost-cutting tactics, digital transformation strategies and productivity-enhancing initiatives, as well as rising asset complexity and age, will support growth of the IAM software market.”
Reducing maintenance-related costs was cited as a very important factor driving investment for 71% of respondents. It comes as the falling cost of internet-connected devices lowers the barriers to the introduction of more digitally sophisticated condition-based maintenance strategies for industrial assets. There are headwinds in the market, from the increased use of subscription-based business models which will contain growth rates, especially in the next two years.
The global research included interviews with over 250 industry decision makers. It covers five primary industrial sectors: manufacturing; oil and gas; utilities; infrastructure and transport; and mining.
Verdantix defines IAM software as: Software products that enhance a firm’s decision-making and processes for asset information management, asset maintenance and asset reliability, as well as performance improvement and strategic and financial decision-making.