Product Engineering Services
Product engineering services include innovating, designing, prototyping, developing, testing and deploying a software product
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Product Engineering Services Industry Benchmarks
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Product Engineering Services market frequently asked questions
From Beroe's market research reports, the product engineering services market size will reach $1,185 billion by 2022 from $810 billion in 2018 growing at a CAGR of 9.8-10 percent.
Accenture, ALTEN Calsoft Labs, Altran, Cognizant, EPAM, Harman, HCL, Luxoft, Pactera, TCS, and Wipro are among the top players in the global product engineering services market.
Reducing the time taken for development is the number one trend responsible for driving the growth of software product engineering services. This also helps the vendor to achieve quick delivery cycles of the product thereby accelerating the 'time-to-market' criteria of the product among the vendors.
The major end-users for software product engineering services are automobiles, independent software vendors, healthcare, telecom, educational institutions, BFSI, aerospace, and other industries.
As the U.S. spends more in R&D as compared to India, China, and other countries from Central and Eastern Europe, software product engineering services companies are more concentrated in the U.S.
Service providers in the software product engineering services are evaluated based on their technological capability, employee availability with desired skills.
Cloud-based deployments are becoming more feasible, reliable, and secure owing to established providers like Amazon, Google, and Microsoft.
Due to certain security considerations and regulatory requirements, banks and financial institutions prefer keeping their systems deployed on-premise. Additionally, the disadvantages of vendor lock-in can be eliminated with on-premise solutions.
The key market drivers for product engineering services are ' ' ISVs who are specialized in developing and selling the software designed for the masses. ' With the growing demand for IoT, many service providers have created a separate IoT engineering portfolio. ' The shift towards leveraging automation for testing activities due to agile development methodologies.
The market constraints faced by the software product engineering services are ' With a majority of the clients opting for outsourcing, the confidentiality of product development may be lost. ' Communication gap about the product requirements between the designer and developer ' Failure to determine the availability of technical features and functionalities before the product development phase ' While outsourcing the services, partnership, and communication between the client and service provider becomes challenging.
Product Engineering Services market report transcript
Product Engineering Services Global Market Outlook
The global product engineering services market is projected to reach $990.97 billion by 2026, up from $910.82 billion in 2023*, at a CAGR of 8.8 percent during 2021–2026
In terms of spend, software engineering or product engineering is a part of Engineering R&D spend, with digital engineering being a major driver. The major trends, which drive the growth of software product engineering, are:
Reducing the time taken for development helps the vendor to achieve quicker delivery cycles of the product. This accelerates the ‘TTM’ criteria of the product among the vendors
The applications of automation so far have been limited and is mostly confined to simple processes. It is expected that in a few years, many organizations would migrate to intelligent automation solutions, thus, enabling full-scale infrastructure automation
Product Engineering Services Market Analysis
Software Engineering (SE) is a set of services for the development of a software product through well-defined methods and principles. It can also include changes to exiting systems
It is also referred to as ‘Software Product Development Services’, ’Application Development and Maintenance Services’ or ‘Product Engineering’ by the clients
In terms of spend, software engineering or product engineering is a part of Engineering R&D spend, with digital engineering being a major driver
Market Size for Product Engineering Services 2020–2026
The global product engineering services market is projected to reach $ 1,277.15 billion by 2026, up from $910.82 billion in 2023, at a CAGR of 8.8 percent during 2023–2026
The major trends, which drive the growth of software product engineering are:
–Reducing the time taken for development helps the vendor to achieve quicker delivery cycles of the product. This accelerates the ‘TTM’ criteria of the product among the vendors
–Industries have started adopting IoT to reduce costs, and this is achieved by manufacturing various devices, thereby providing better customer experience
Major end users for software product engineering services are Automobiles, Independent Software Vendors, Healthcare, Telecom, Educational Institutions, BFSI, Aerospace, and other Industries
Software product engineering service is more concentrated in the US, as they spend more on R&D, followed by India, China, and few countries, like Russia, Ukraine, Romania (Central and Eastern Europe)
Drivers and Constraints : Product Engineering Services
Independent Software Vendor
ISVs are specialized in developing and selling software designed for masses. Earlier, the market for ISVs were not found attractive by larger service providers, as their competencies were constrained within the application development methodology. In the recent times, ISVs prefer ‘as-a-service’, so they require the service provider to invest in the following:
–Reuse and automation of the code
–Development of knowledge and resolutions to migrate the current product to SaaS
–Reduce the time-to-market by automating the development, testing, and delivery processes
Increased Demand for Digitization:
Digital transformation, cloud adoption, investing on collaboration tools and automation to streamline complex tasks increased exponentially due to the pandemic as enterprises are looking for flexible solutions. This trend is expected to continue for next 1-2 years
As majority of the clients opt for outsourcing, there is a possibility that the confidentiality of product development may be lost, which affects the uniqueness of the product
Apart from this, there are common constraints found within the service providers, which are as below:
–Lack of understanding and a break in communication about the requirements of the product between the designer and the developer
–Failure to determine the availability of technical features and functionalities before the product development phase leads to product failure
–While outsourcing the service to a vendor from a different location, partnership and communication between the client and the service provider becomes challenging
Supply Trends and Insights : Product Engineering Services
Product Engineering Services Vendors are considered as a partner by the clients. They are expected to help the client launch new products faster, accelerate time-to-market, quickly adapt to business needs, reduce development costs, improve and shorten product life-cycle and create innovative product to exploit market.
With continuously changing business scenario, Organizations should be future-ready and must leverage the services of product engineering vendors to maximize the latent potential of their product and outperform competitors.
Engaging with a PES provider is a safer way to develop products since the Intellectual Property (IP) requires to be kept safe due to the nature of such contracts.
In addition to developing projects for the client, the clients also have the option to select from other offerings from the firm that may prove to be beneficial for the client.
Suppliers are highly fragmented in the mid-market segment with Local/Tier-II market players who offer competitive pricing as compared to Global suppliers, with shorter lead times and more customization.
There exists an increased trend towards partnership/affiliations, where suppliers are building a greater amount of international presence, either directly or through channel partners
Most adopted model (globally): Single-Vendor engagement is being practiced in this market, due to the nature of customization that is required.
Contract length: 1–10 years
Software Development Model
Software development models are methodologies which help in development of the product
These models have set of activities which are performed sequentially to produce the required product and have a major impact on determining the testing phases of the product
Based on the product to be developed, the services provider selects the model having criteria's like technical, organizational and team strength into consideration
There are eight different types of models used for software development,
Most of the top service providers follow agile and waterfall model. Service providers use Agile methodology predominantly due to the ease in software development
‘V’-model, Incremental model, RAD model, Iterative model and Spiral model are also used based on the requirement of the customer and need of the product.
Why You Should Buy This Report
- This engineering services report gives an overview of the global engineering services market and the engineering services market trends.
- It also details the engineering services market size and the historical growth of the market with reasons for significant milestones. The report gives a projected growth forecast supported by the reasons for this anticipated growth trajectory.
- The report does a detailed analysis of the engineering services market to give the regional market outlook and drivers and constraints for the South America, LATAM, Europe, and China markets. The market dynamics vary from region to region. This section gives detailed figures about the market size, market maturity, unique features, import and export countries as well as the forecast for each region.
- Porter’s five forces analysis of emerging and developed markets.
- Procurement is a very important part of any market. The report details all the relevant facts and figures to support procurement decisions. From pricing models to KPIs this report has valuable data.
- The engineering services market is dependent and linked to many other industries. The mining services, hard services, air conditioning and ventilation services, and integrated facilities management verticals and their impact on the engineering services market are described.
- Supplier profile and SWOT analysis of major players in the global and regional engineering services market such as Fluor Corporation, Hatch Group, Bechtel Corporation, etc. Unique aspects of each player's business model are highlighted for better understanding.
- Innovations or market trends that have the potential to change the engineering services market significantly are also detailed in the report.
- The report does an engineering industry analysis that gives insight on how to market engineering services, top engineering industry trends, best procurement practices, KPIs, end-use industry outlook, etc.
- The report also gives a snapshot summary of the entire engineering services market highlighting salient points such as market size, high maturity markets, low maturity markets, trends, strategies, KPIs, source countries, prising and trending technology.
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