The importance of software in mechanical and plant engineering is increasing

VDMA study The importance of software in mechanical and plant engineering is increasing

2025-01-25 Source: VDMA I Translated by AI 2 min Reading Time

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The study "Software Development in Industry" by VDMA Software and Digitalization shows that the importance of software development will increase significantly over the next five years, particularly due to the influence of AI, IoT, Big Data, and Cloud Computing.

A relatively large number of companies in the mechanical and plant engineering sector (60 percent) currently develop a majority (60 to 100 percent) of their software themselves.(Image: freely licensed / Pixabay) — A relatively large number of companies in the mechanical and plant engineering sector (60 percent) currently develop a majority (60 to 100 percent) of their software themselves.
(Image: freely licensed / Pixabay)

In particular, the importance of software development for one's own products or customer-specific solutions is expected to increase significantly over the next five years. The greatest positive influence on business models is attributed to artificial intelligence, the Internet of Things (IoT), Big Data, and Cloud Computing. This is the core statement of the new study "Software Development in Industry," conducted by VDMA Software and Digitalization in collaboration with the Institute for Learning and Innovation in Networks (ILIN) at Karlsruhe University of Applied Sciences. It is based on a survey conducted among mechanical engineering companies, industry-related service providers, and IT companies.

In-house software development

"Around 60 percent of the surveyed machinery and plant engineering companies currently conduct software development in-house in at least 60 percent of cases on average. However, differences correspond to the size of the companies and the importance of the software products in relation to the company's core competence," says Florian Klein, software engineering consultant for VDMA Software and Digitalization. Larger companies are more likely to develop in-house today than small and medium-sized enterprises (SMEs). Due to the future increase in the importance of software development, SMEs in particular foresee an increase in the outsourcing of development services.

Agile development methods are becoming more important

With the increasing relevance of developing software solutions to support internal processes, products, and customer-specific solutions, agile development methods are also becoming increasingly important. This is the only way the industry can respond flexibly to the needs of a volatile market. "To meet this dynamic environment, it requires a meaningful integration of the classical methods dominant in mechanical and plant engineering with the agile approaches established in software development," summarizes Patrick Fomferra, co-author of the study and academic staff member at the Institute for Learning and Innovation in Networks at Karlsruhe University of Applied Sciences. According to the mechanical engineering companies, the significance of Scrum, one of the agile methods, will particularly increase strongly in the next five years and will be very relevant in the future.

However, the industry-related service and IT companies surveyed also assess the mechanical engineering sector a little more critically in the current implementation of agile methods. From their perspective, the industry still operates more classically overall. Therefore, future collaboration with partners is an important component in building and expanding competencies in software development.

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Date: 08.12.2025

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