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The digital twin market size is estimated to grow at a CAGR of 39.92% between 2022 and 2027. The market size is forecast to increase by USD 32,784.18 million. The growth of the market depends on several factors including, increasing adoption of Industry 4.0 and industrial IoT, growing demand for predictive maintenance and real-time monitoring data, and need for reduced time-to-market and improved decision-making. A digital twin is a virtual replica or representation of a physical object, process, or system. It uses real-time data and simulation models to mimic the behavior, performance, and characteristics of its physical counterpart. Digital twins enable the analysis, monitoring, and optimization of various aspects of the physical entity throughout its lifecycle.
This digital twin market report extensively covers market segmentation by deployment (on-premises and cloud), end-user (manufacturing, energy and utilities, aerospace and defense, automotive, and infrastructure and others), and geography (North America, Europe, APAC, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The increasing adoption of Industry 4.0 and industrial IoT is the key factor driving the growth of the global digital twin market. Industry 4.0 is the new industrial paradigm that focuses considerably on digitalization. The fourth industrial revolution is changing the existing IT structure of industrial companies. Industry 4.0 has raised the application of the industrial Internet of Things (IIoT), which promotes using the smart sensors and actuators in manufacturing processes. Industrial Internet of Things (IIoT) provides benefits, such as improved productivity and efficiency, increased collaboration and knowledge-sharing, enhanced customer experience, cost reduction, and high profitability.
In addition, digital twin technology is important to the development of Industry 4.0 projects, which include automation, real-time data interchange, and advanced manufacturing processes. For asset and product lifecycle management, industries have been actively employing digital twins. For instance, Volvo Group, a Sweden-based automobile original equipment manufacturer, uses PTC digital twin solutions to improve its workforce productivity and quality control. Thus, Industry 4.0 is gaining high traction in the manufacturing industry which is expected to boost the growth of the global digital twin market during the forecast period.
Increasing traction in the healthcare sector is the key trend driving the growth of the global digital twin market. The healthcare sector is the leading sector in terms of the adaptation of new technology. The healthcare sector is highly focused on reducing its CAPEX and OPEX and providing best-in-class medical facilities to patients. In the last few years, the digital twin has gained significant traction in the healthcare industry. By creating a digital three-dimensional (3D) model of hospitals, processes, staffing, and care models, the hospital management can gain insights into bed shortages, the transmission of germs, staff schedules, and operating rooms.
Moreover, digital twin solutions enable hospital management to make dynamic decisions to optimize patient care, costs, and facility performance. Market players and healthcare service providers are working closely to identify further applications of digital twin solutions in healthcare. Furthermore, the trend of vendors partnering with healthcare providers, researchers, and pharmaceutical companies is expected to propel the growth of the global digital twin market during the forecast period.
The high cost of deployment and complex architecture of digital twins is the major challenge that will impede the growth of the global digital twin market. Implementing a digital twin requires significant investment in technology platforms, infrastructure development, and maintenance. Organizations need to invest heavily in IoT platforms, sensors, software, infrastructure, and security solutions. Additionally, keeping a digital twin infrastructure working smoothly requires significant investments in operations. A digital twin is a long-term project that increases long-term variable costs.
Moreover, digital twins have complex architectures and require a significant IT workforce and investments to manage this complex infrastructure. The complexity of digital twins varies by business objectives and industry. Interoperability issues, heterogeneous devices, application scenarios, data formats, and communication networks increase the complexity of digital twin infrastructures. Organizations must develop new architectural frameworks to address these challenges and simplify complexity.
The market share growth by the on-premises segment will be significant during the forecast period. On-premises digital twin solutions are often used over cloud-based solutions because they offer better security. The global market for digital twins is in the early stages of the product lifecycle and these solutions are being used by leading aerospace, automotive, and manufacturing industries. These industries focus on intellectual property (IP) and data security and thus extensively use on-premises software.
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The on-premises segment showed a gradual increase in the market share of USD 1,090.36 million in 2017 and continued to grow by 2021. On-premises solutions align with the industry's business objectives and provide better security and control of the overall process than cloud-based solutions. The major benefits of on-premises solutions such as data control, less vendor dependency, a foundation for future hybrid cloud expansion, and easier customization. Adopting on-premise digital twin solutions is expected to grow with rising adoption by large enterprises during the forecast period.
The rapid adoption of Industry 4.0 around the globe is a major growth contributor to digital twin solutions in the manufacturing sector. Digital twin solutions will be important in product design, manufacturing processes, and repair and maintenance. Such solutions are used to make digital replicas of products and manufacturing processes. A digital twin solution would affect the three main aspects of the manufacturing sector which include production and design, product monitoring and maintenance, and new product development. Furthermore, the availability of cloud-based digital twin solutions has increased their adoption among Small and medium-sized enterprises (SMEs), which were otherwise limited to large manufacturing companies because of high upfront costs. Thus, the demand for digital twin solutions is expected to drive the growth of the global digital twin market during the forecast period.
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North America is estimated to contribute 43% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The region comprises developed countries, such as the US and Canada. These countries have well-developed IT and network infrastructure, paving the way for technology developments and deployments. Factors such as rising demand for digital twin solutions in the automobile and aerospace industries will drive the growth of the market in this region in the future. For instance, in aerospace, the Boeing Company (Boeing) and Lockheed Martin Corp. (Lockheed Martin) are among the numerous large aircraft manufacturers in the US.
Moreover, digital twin solutions are becoming increasingly important in healthcare, energy, and utilities. The rising popularity of Industry 4.0 initiatives across the US is expected to further increase the demand for digital twin solutions in the manufacturing industry. The country has a well-developed cloud infrastructure and cloud-based solutions offered by providers will enable SMEs to implement digital twin solutions during the forecast period. More than 50% of large enterprises across all major sectors are expected to implement some level of digital twin solutions aimed at operational excellence, new product development, or predictive maintenance applications. Due to the growing use in aerospace, automobile, and manufacturing verticals, investments in the digital twin market in North America are expected to increase during the forecast period.
In 2020, the outbreak of COVID-19 negatively impacted various end-user industries such as manufacturing, consumer goods, oil and gas, chemicals, and mining, which use digital twin solutions. However, in 2021, due to the pandemic, there has been positive growth in the healthcare industry, compensating for the loss incurred by the market players and manufacturers in the regional digital twin market to some extent. Conditions improved owing to the initiation of large-scale vaccination drives and the lifting of lockdown restrictions in phases by the governments. Thus, the requirement for digital twin solutions from end-user industries, such as automotive, aerospace, industrial manufacturing, and oil and gas, is expected to increase, which will boost the growth of the regional digital twin market during the forecast period.
The Digital Twin Market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Digital Twin Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The digital twin market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
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Digital Twin Market Scope |
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Report Coverage |
Details |
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Page number |
190 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 39.92% |
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Market growth 2023-2027 |
USD 3,2784.18 million |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
39.3 |
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Regional analysis |
North America, Europe, APAC, Middle East and Africa, and South America |
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Performing market contribution |
North America at 43% |
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Key countries |
US, China, Japan, UK, and Germany |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
ANSYS Inc., Dassault Systemes SE, DNV Group AS, General Electric Co., Hexagon AB, Honeywell International Inc., International Business Machines Corp., Johnson Controls International Plc, Kongsberg Gruppen ASA, Microsoft Corp., Oracle Corp., PTC Inc., Robert Bosch GmbH, SAP SE, ScaleOut Software Inc., Siemens AG, Software AG, SWIM Inc., Veerum Inc., and Wipro Ltd. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Deployment
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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