Digital Thread Market by Technology (PLM, SLM, CAD, MES, IoT, ERP, edge computing, Digital Twin, ALM, SCADA), Module (Data collection, Data management & Integration), Deployment, Application, Vertical, Region - Global Forecast to 2030
Updated on : Oct 22, 2024
Digital Thread Market Size & Share
The global digital thread market size is expected to be worth USD 11.42 billion in 2024 and is projected to reach USD 36.81 billion by 2030; growing at a CAGR of 21.5% during the forecast period from 2024 to 2029
The digital thread is the seamless flow of relevant data regarding a product throughout its life cycle. The digital thread delivers an exhaustive perspective on a product's lifecycle, encapsulating design, development, manufacture, maintenance, service, and eventual retirement. It empowers organizations to dismantle operational silos, enhance process efficiency, and ensure cross-functional interoperability across various departments, functions, and systems.
This framework guarantees the integrity and uniformity of product-related data across the ecosystem, ensuring stakeholders access to the most current information. With the rising integration of digital threads, there is an amplified demand for real-time data analytics, optimization of asset performance, and predictive maintenance capabilities.
Digital Thread Market Forecast to 2030
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North America accounted for a significant share of USD 3,166.4 million in the digital thread industry in 2023. The North American region holds the largest market share in digital threads due to several factors. North America has a strong ecosystem of advanced technology companies, including those specializing in software, cloud computing, AI, and IoT, which are integral to the development and implementation of digital thread solutions. Additionally, companies in North America are heavily investing in digital transformation to stay competitive in a rapidly evolving global market.
AI plays an important role in strengthening the digital thread's capabilities by enabling advanced data analysis, automation, and decision-making across the entire product lifecycle. The digital thread connects various stages of a product's lifecycle, from design and manufacturing to operation and maintenance, by integrating data, processes, and systems. AI improves digital threads by enabling real-time data collection and monitoring, optimizing performance, and predicting failures. Furthermore, Al in digital thread facilitates seamless data integration across systems, improving interoperability and ensuring a similar information flow. Al also optimizes supply chains by predicting demand, managing inventory, and identifying disruptions while supporting mass customization through personalized customer data analysis. Additionally, it improves quality management with automated defect detection and enhances project collaboration by streamlining communication and information sharing.
Digital Thread Market Trends:
Driver: Growing emphasis on automation and digitization
The increasing demand for asset performance optimization and predictive maintenance signifies a shift in industries toward better operational efficiency and cost reduction. Asset performance optimization aims to enhance the effectiveness of assets throughout their lifecycle by using advanced analytics and real-time data to improve resource utilization, reduce downtime, and increase productivity.
Predictive maintenance, a critical component of this optimization, employs data from sensors, IoT devices, and historical records to provide early warnings of equipment faults. This allows for proactive intervention by analyzing trends and anomalies, reducing unexpected downtime, and extending the life of assets compared to manual and reactive maintenance processes, which typically result in higher costs and more operational disruptions.
In addition, other technological advancements such as artificial intelligence and machine learning support these practices by enabling more accurate predictions and smarter maintenance procedures. Real-time data analytics integration provides valuable insights that drive decision-making processes towards optimization of plans. Hence, the emphasis on asset performance optimization and predictive maintenance is driven by the goals of improving efficiency, reducing costs, and gaining competitive advantages, which are crucial for long-term success and sustainability in today's industries.
Restraint: Cyber security and data privacy concerns
Cybersecurity and data privacy concerns can significantly limit the growth of the digital thread market. The digital thread, which enables the smooth flow of data throughout a product's lifecycle, depends heavily on secure data handling and system integration.
Tougher data privacy regulations, such as GDPR and CCPA, can increase complexity costs and potentially slow down adoption. The high costs of implementing strong cybersecurity measures may discourage investment, and the risk of data breaches and cyber-attacks adds further concerns. The challenge of securely integrating different systems and the absence of standardized practices also contribute to hesitancy in adopting digital thread technologies. Addressing these issues requires a focus on developing robust cybersecurity frameworks, adhering to regulations, and establishing standardized practices for successful digital thread implementations.
Opportunity: Building digital threads with enterprise iPaaS
Digital threads in enterprise Integration Platform as a Service (iPaaS) enable organizations to seamlessly integrate data and processes across the entire product lifecycle, from design and manufacturing to deployment and customer support.
By implementing iPaaS, businesses can gain a comprehensive, interconnected view of their operations, leading to improved decision-making, enhanced product quality, and accelerated time to market. iPaaS facilitates real-time data synchronization across diverse systems and applications, ensuring the smooth flow of information throughout the enterprise. This capability is crucial for driving digital transformation, boosting operational efficiency, and enabling the development of new business models in an increasingly competitive landscape.
As industries increasingly adopt Industry 4.0 technologies, the demand for digital threads is growing. iPaaS offers the scalability, flexibility, and real-time integration necessary to meet this demand, providing a solid foundation for continuous innovation and maintaining a competitive advantage. Organizations that seize this opportunity can optimize operations, reduce costs, and enhance customer experiences, positioning themselves as leaders in their markets.
Challenge: High cost of implementation
The implementation of digital thread can be challenging and costly due to the need to integrate with existing IT systems and handle a variety of data. Custom development planning is essential, as substantial amounts of data need to be managed to ensure quality and consistency. This requires significant investment in new technologies such as IoT sensors, cloud computing, and data analytics platforms. Costs also arise from training staff and managing changes in processes.
Additionally, ensuring data security and compliance with industry regulations adds another layer of complexity and cost to the system. Customization and scalability further contribute to costs, as digital thread systems require tailored solutions and upgrades, which can be expensive. In many cases, dedicated teams and external consultants are needed for effective project management, increasing overall expenditure. Therefore, considering the complexity and cost of implementation is crucial despite the potential benefits of Digital Thread, such as improved efficiency, enhanced collaboration, and better decision-making.
Digital Thread Market Ecosystem
Prominent companies in this market include well-established, financially stable digital thread providers such as PTC (US), IBM (US), Siemens (Germany), Dassault Systemes (France), and Rockwell Automation (US). These companies have been operating in the market for several years and possess a diversified product portfolio and strong global sales and marketing networks.
Digital Thread Market Segment Analysis
PLM technology segment is expected to account for the largest market share during the forecast period.
The digital thread market is segmented into various technologies, such as PLM, APM, CAD, CAM, SLM, ALM MRP, ERP, MES, Edge Computing, Industrial Sensor, SCADA, and Industrial Communication. PLM is a highly influential technology that drives the digital thread industry.
It integrates data and procedures throughout the entire life cycle of a product, from design to end-of-life. This integration fosters collaboration by providing a single view of product data, effective data management, and detailed insights for better decision-making. PLM systems also ensure regulatory compliance and quality control. The scalability and flexibility of PLM make it applicable across various industries, and its essential characteristics position PLM as a significant contributor to the digital thread, thereby making a substantial market impact.
Design & engineering segment is expected to secure the largest market share in 2024.
The market is divided into different applications of digital thread. Applications related to the design and engineering of a digital thread play a significant role in integrating data seamlessly throughout stages of product development.
This integration enhances collaboration and enables real-time design iteration and optimization. Furthermore, it offers a comprehensive view of the product lifecycle during the design stage, thereby improving resource efficiency and sustainability. Additionally, digital threads allow for customization and personalization, enabling personalized product designs tailored to specific client needs. Altogether, this underscores the significant impact of digital threads in design and engineering.
Pharmaceuticals segment is projected to record the highest CAGR during the forecast period.
The pharmaceuticals segment is likely to witness the highest CAGR of 22.7% during the forecast period. The pharmaceutical industry has been adopting digital thread at a rapid rate. Digital thread makes sure that regulatory compliance and traceability are aligned, quality management has huge support, and it brings much-needed efficiency in research and development.
Additionally, digital threads smoothen highly complex supply chains, support the emergence of personalized medicine by integrating data around patients, and enable seamless data integration across systems. These are core competencies that underpin high standards, accelerate drug development, and meet the regulatory requirements of the most exacting standards typical of the industry.
Regional Analysis
Asia Pacific is projected to exhibit the highest CAGR during the forecast period.
Digital Thread Market by Region
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Top Digital Thread Companies - Key Market Players
Major players covered in the
- Siemens (Germany),
- PTC (US),
- Dassault Systèmes (France),
- IBM (US),
- SAP (Germany),
- Rockwell Automation (US),
- Oracle (US),
- Autodesk, Inc. (US),
- General Electric Company (US),
- AVEVA Group Limited (UK),
- Accenture (Ireland),
- DXC Technology Company (US) are some of the key players in the digital thread companies.
In this report, the overall digital thread market has been segmented based on Technology, module, deployment, application, vertical, and region.
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Recent Developments in Digital Thread Industry
- In August 2024, Oracle introduced new user experience (UX) enhancements to Oracle Fusion Cloud Supply Chain & Manufacturing (SCM). Built with the award-winning, consumer-grade Oracle Redwood Design System, the UX updates help procurement professionals, logistics managers, field service technicians, and product managers increase productivity and accelerate supply chain processes.
- In August 2024, SAP SE launched new cloud capabilities for SAP Product Lifecycle Management (SAP PLM) solutions in a strategic co-innovation with Hilti AG, a leading global provider of products and services for the construction industry.
- In February 2024, Autodesk, Inc. unveiled Autodesk Informed Design, a cloud-based solution that connects design and manufacturing workflows to streamline the building design and construction process. Through a connected, bidirectional digital thread, data can be shared across the AECO ecosystem of partners.
- In October 2023, Siemens Digital Industries Software and CEA-List, a technological research institute specializing in smart digital systems, signed a memorandum of understanding agreement to collaborate on advancing digital twin capabilities with artificial intelligence (AI) and improving the integration of embedded software on virtual and hybrid platforms. This research partnership aims to leverage the combined expertise of both organizations, integrating Siemens' Xcelerator portfolio and CEA-List's toolset to eliminate the barriers between electronics design, software development, and mechanical engineering using digital twin technologies.
- In April 2023, IBM and Siemens collaborated to develop a combined software solution integrating their respective offerings for systems engineering, service lifecycle management, and asset management. These companies collaborated for IBM’s Maximo for asset management with Siemens’ Teamcenter software to support an integrated digital thread between service engineering, asset management, and services execution.
Frequently Asked Questions (FAQ’s):
Which are the major companies in the digital thread market? What are their major strategies to strengthen their market presence?
The major companies in the digital thread market include PTC (US), IBM (US), Siemens (Germany), Dassault Systemes (France), and Rockwell Automation (US), and the major strategies adopted by these players are product launches and developments.
What is the digital thread?
The digital thread is the seamless flow of relevant data regarding a product throughout its life cycle. A digital thread provides a comprehensive view of a product's life cycle, starting with design and development and going through manufacturing, maintenance, service, and retirement.
Which region is expected to hold the highest global isostatic pressing market share?
North America will dominate the global digital thread market in 2024.
What are the drivers and opportunities for the digital thread market?
Growing demand for real-time data analytics growing emphasis on automation and digitization, increasing demand for asset performance optimization and predictive maintenance, building digital threads with enterprise Integration Platform as a Service (iPaaS), and advancements in AI and ML.
What are the restraints and challenges for the digital thread market?
Data Silos and heterogeneity issues and a high cost of implementation are the restraints and challenges for the digital thread market.
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The study involves four major activities that estimate the size of the digital thread market. Exhaustive secondary research was conducted to collect information related to the market. Following this was validating these findings, assumptions, and sizing with the industry experts across the value chain through primary research. Both top-down and bottom-up approaches were employed to estimate the overall size of the digital thread market. Subsequently, market breakdown and data triangulation procedures were used to determine the extent of different segments and subsegments of the market.
Secondary Research
Secondary sources in this research study include corporate filings (such as annual reports, investor presentations, and financial statements); trade, business, and professional associations; white papers, certified publications, articles from recognized authors; directories; and databases. The secondary data were collected and analyzed to estimate the overall market size, further validated by primary research. The relevant data is collected from various secondary sources, it is analyzed to extract insights and information relevant to the market research objectives. This analysis has involved summarizing the data, identifying trends, and drawing conclusions based on the available information.
Primary Research
In the primary research process, numerous sources from both the supply and demand sides were interviewed to obtain qualitative and quantitative information about this report. The primary sources from the supply side included various industry experts such as Chief X Officers (CXOs), Vice Presidents (VPs), and Directors from business development, marketing, product development/innovation teams, and related key executives from digita thread providers, (such as Capgemini, Accenture, Siemens, PTC, SAP) research organizations, distributors, professional and managed service providers, industry associations, and key opinion leaders. Approximately 25% of the primary interviews were conducted with the demand side and 75% with the supply side. These data were collected mainly through questionnaires, emails, and telephonic interviews, accounting for 80% of the primary interviews.
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Market Size Estimation
In the market engineering process, both top-down and bottom-up approaches were implemented, along with several data triangulation methods, to estimate and validate the size of the digital thread market and other dependent submarkets listed in this report.
- The key players in the industry and markets were identified through extensive secondary research.
- Both the supply chain of the industry and the market size, in terms of value, were determined through primary and secondary research.
- All percentage shares, splits, and breakdowns were determined using secondary sources and verified through primary sources.
- Market Size Estimation Methodology-Bottom-up approach
Bottom-Up Approach
Top-Down Approach
Data Triangulation
After estimating the overall market size, the total market was split into several segments. The market breakdown and data triangulation procedures were employed wherever applicable to complete the overall market engineering process and gauge exact statistics for all segments. The data were triangulated by studying various factors and trends from both the demand and supply sides. The market was also validated using both top-down and bottom-up approaches.
Market Definition
A digital thread provides a comprehensive view of a product's life cycle, starting with design and development and going all the way through manufacturing, maintenance, service, and retirement. It provides a continuous, traceable flow of information, enabling real-time access to and analysis of data from various stages and sources. This integration ensures that all stakeholders have a unified view of the product and its lifecycle, facilitating better decision-making, improving efficiency, and enhancing product quality and performance.
Stakeholders
- End users
- Government bodies, venture capitalists, and private equity firms
- Digital thread solution provider
- Digital thread service provider
- Digital thread industry associations
- Professional service/solution providers
- Cloud service providers
- Consulting firms
- Research institutions and organizations
- Standards organizations and regulatory authorities
- System integrators
- Technology consultants
The main objectives of this study are as follows:
- To describe and forecast the digital thread market in terms of value based on technology, module, deployment, application, vertical, and region
- To forecast the market size for various segments with regard to four main regions, namely, North America, Europe, Asia Pacific, and the Rest of the World (RoW), along with their respective countries, in terms of value
- To provide detailed information regarding drivers, restraints, opportunities, and challenges influencing the market growth
- To provide a detailed overview of the value chain of the digital thread ecosystem
- To provide a detailed analysis of the impact of the AI on the digital thread market
- To strategically analyze micromarkets1 with respect to individual growth trends, prospects, and contributions to the total market
- To analyze the opportunities for stakeholders and details of the competitive landscape of the market
- To strategically profile the key players and comprehensively analyze their market positions in terms of ranking and core competencies2
- To analyze the major growth strategies implemented by key market players, such as contracts, agreements, acquisitions, product launches, expansions, and partnerships
Available Customizations:
With the given market data, MarketsandMarkets offers customizations according to the specific requirements of companies. The following customization options are available for the report:
Country-wise Information:
- Analysis for additional countries (up to five)
Company Information:
- Detailed analysis and profiling of different market players (up to five)
Growth opportunities and latent adjacency in Digital Thread Market