Cambashi`s View: Why Hardware Companies Buy CAE Software Companies
Over the last decade or so there’s been an increasing incidence across the PLM (Product Lifecycle Management) and MCAE (Mechanical Computer-Aided Engineering) software sectors of the acquisition of independent CAE software companies by much larger electrical & electronic hardware and manufacturing companies.
The Foundation of CAx in Product Development
Nearly every manufactured product today undergoes a development process involving Computer-Aided Design (CAD), Computer-Aided Engineering (CAE) simulation, and Computer-Aided Manufacturing (CAM) software. These tools are critical for validating product performance across multiple physics domains.
Understanding a new or enhanced product’s geometrical limitations and physical boundaries (CAD), plus its multi-physics performance (fluid, thermal, structural, electromagnetic, multibody etc; also known as CAE) during normal operation is critical to its final regulatory compliance and to ensure customer warranties. Hence, the product’s ability to be successful in its chosen market, to be innovative and to be cutting edge – without it failing and having to be recalled is dependent on CAx simulation tools.
Download the article
Download the full article, written by Dr. Keith Hanna.
Siemens and Hexagon leading the way in Hardware Companies acquiring CAE Software Companies
Siemens AG
Pioneered this trend by acquiring Unigraphics (2007), LMS (2008), CD Adapco (2015), Mentor Graphics (2017), and Altair (2025), amongst other smaller acquisitions in the last 18 years or so to create its Digital Industries Division.
Hexagon AB
Transformed from a Swedish conglomerate to a global player through acquisitions including FTI (2016), MSC Software (2017), Romax (2020), and CADLM (2021), amongst others in the CAE space to create it’s largest hardware & software division.
Other notable acquisitions include Schneider Electric’s purchase of AVEVA (2023), Keysight’s acquisition of ESI Group (2023), and Emerson Electric’s complete acquisition of Aspentech (2025).
What are the business benefits of a hardware company acquiring a CAE software company?
Two types of hardware companies seem to be acquiring in the CAE software space today; traditional heavy manufacturing companies like Siemens AG and smart manufacturing conglomerates like Hexagon AB who both have a strong penchant for measurement hardware and electrical and electronic manufacturing (see below). It is also worth noting that there are other measurement and electrical & electronic hardware companies touching on the CAE software space these days – Schneider Electric’s acquisition of AVEVA in the production plant engineering simulation arena in 2023 included some process-oriented CAE software tools plus Keysight’s swoop to secure the French ESI Groupe in 2023 is quite an adjacency for them to acquire a longstanding CAE software player. Aspentech was fully acquired by industrial automation hardware company, Emerson Electric in March 2025 and although Aspentech is not a pure MCAE play, its process industry optimization software has plugins and links to the CFD and Structural analysis sectors as well as to Industrial Mixing applications. Another interesting play in the empirical CAE simulation market was the acquisition of Scale-up Systems by Mettler-Toledo the famous measurement company in 2021. This provided them with Dynochem, a 0d/1d CAE simulation tool for the pharmaceutical mixing scale-up industry and other reaction modelling software.
If we consider the business benefits of a hardware company acquiring CAE software and engineering simulation software companies in general, there are broadly three underlying reasons for the acquisitions:
Boosting Revenue
Expanding a Hardware Company’s Profits into New Tech Territories
CAE software has consistently grown by about 10% annually over the past 5 years. Future growth is expected to accelerate due to AI/ML advances, increased GPU use in simulations, and the rapid SaaS cloud deployment making CAE more accessible (Cambashi CAE Report, 2025).
Data Integration
Enhance Product Quality with Real and Virtual Manufacturing Data
It has been said for a long time now that “data is the new oil in manufacturing”. This idea is fueled by Digital Twins and Digital Threads. The unique value lies in generating real and virtual data for any product. It allows utilizing synthetic simulation data & measured test data at the R&D stage of new product innovation as well as during manufacturing and then when installed and operating for the whole product’s lifetime.
Software helps to sell more Hardware
Bundling simulation tools with high-value equipment can strengthen deals and drive revenue through enhanced features and customer experience. Beyond sales, CAE software offers valuable insights, better process visibility, and powerful visualizations—especially when paired with AR—giving customers a clearer view and greater control of their equipment.
Challenges of integrating CAE Software companies into Hardware companies
There are essentially five major challenges in merging acquired CAE software companies into hardware measurement and manufacturing companies:
- Workflow Integration
Combining hardware and software workflows requires careful planning. - Accuracy Assurance
Ensuring precision when merging measurement and simulation. - Organizational Understanding
Bridging knowledge gaps between hardware and software teams. - Sales force multipliers and combined go-to-market selling
Bundling hardware and CAE software offers growth potential, but success requires aligning different sales models. - Hardware and Software research & development teams think differently
Software development processes differ fundamentally from hardware development. Software teams accept bugs in initial releases, while hardware teams aim to eliminate errors before release, requiring careful integration approaches.
Future Outlook
More global hardware suppliers in electronic and mechanical measurement, industrial automation, and manufacturing services are expected to acquire engineering simulation software companies.
This acquisition trend is likely to accelerate, driven by several factors:
- Simulation-driven design and testing of manufactured products to increase innovation, improve quality and to lower manufacturing costs
- Virtual engineering analysis and simulation at all stages of a product’s lifecycle
- The growth of ‘Digitalization’ and the increased utilization of ‘Digital Twins’
- The advent of AI/ML, GPUs and Cloud Computing is turbocharging the use of CAE simulation producing a CAGR of 10% with likely increased growth in future
- Combining MCAE and PLM software (and, increasingly EDA software in future) with hardware equipment and manufacturing/measurement processes to produce the ultimate ‘holy grail’ of ‘smart manufacturing’, and
- Currently no global or inter-company tariffs on CAE software exists compared to physical hardware products, although President Trump of the USA has recently proposed tariffs on Electronic Design Automation (EDA) software which is essential for electronic chip and PCB design, the brains behind all smart munitions and modern military hardware
Want deeper insights?
Request our sample to learn more about Cambashi`s comprehensive data coverage of the CAE software market.