“Software for Hardware” is Heating Up!

The landscape of software solutions for developing and manufacturing hardware is rapidly expanding. We’ve never seen so many promising startups developing disruptive “software for hardware” products.

Over the last 40–50 years, the legacy CAD-PLM companies like Dassault, Autodesk, Siemens PLM, Ansys, and PTC, have built empires. But with seismic technology shifts reshaping software and industry, these companies must now reckon with the innovator’s dilemma — how to keep pace with challenger startups rapidly developing purpose-built products on new foundational technologies like Cloud, GPU, and GenAI. Coupled with the evolving demands of the next generation of hardware companies like SpaceX, Tesla, Anduril, Joby, Rivian… the continued dominance of these legacy companies is in question. While their complex, entrenched product portfolios are admittedly very hard to rip out of large engineering and manufacturing orgs, there is a new wave of hardware startups building anew, and they’re are anything but sentimental. Next-gen hardware companies are questioning all prior assumptions as they implement software tools optimal for speed, agility, and cost.

The incumbents won’t give up ground easily… They continue to roll out improved features and functionality into existing products, but just like we saw in the EV market, to fully leverage new technologies, even in software, requires designing revolutionary new, clean-sheet products from the ground up. The incumbents are also biding their time by buying up virtually any and all startups in their purview that demonstrate early traction. Some of this new tech gets corporately diluted and integrated but the rest mothballed. If history is any guide, this strategy doesn’t last too long. With the embrace of modern paradigms across both horizontal technologies and hardware industry verticals, the legacy CAD-PLM platforms will struggle to keep up, schlepping all their operational and technical baggage. This is a textbook market ripe for disruption…

The exciting new breed of software startups is laser focused on building tools to address the acute needs of next-gen hard-tech. Needs that are intimately understood since many of these software startup founders are alumni. The next-gen hardware companies famously brought software development methodologies (fast, agile, iterative build/test) to the hardware world but frequently (ironically) found themselves bottlenecked by slow, clunky software. For example, complex multi-physics simulations can run for a week on legacy software. Sometimes, it’s even faster to physically build and test. The new “software for hardware” tools are solving this with modern architectures capable of accelerating critical design/sim/build/test cycles by orders of magnitude.

The rapid convergence of Generative AI + Cloud + GPU technologies presents a huge opportunity for startups and an equally large challenge for the heavy legacy products originally built for mainframes and commodores. It’s clear that hardware and software tech is now evolving in lock step, symbiotically enabling each other. In contrast, this will move at light speed compared to legacy market dynamics characterized by inertia and misalignment of incentives between large legacy software and hardware companies.

Some of the most exciting themes and trends emerging from startup companies are:

• Generative design tools that can eliminate hours of tedious CAD work and arrive at cleaner, more optimal and manufacturable designs.
• Lightweight Multi-physics simulations leveraging machine learning and neural networks that can run in minutes vs legacy deterministic models that consume massive compute for days at a time.
• Combinations of the above two innovations allow for iterating through fast design/sim cycles and new tools are helping automate exploring design spaces and test parameters in parallel.
• New MES, processing monitoring, and inspection tools improving the efficiency and quality of advanced manufacturing operations.
• Modern collaboration and requirements management platforms are allowing for real-time analysis, communication, creative collaboration, and optimization of designs and requirements across the enterprise.
• Intelligent CPQ and Supply chain management software is helping match the best OEMs and Suppliers, and interact efficiently through quoting, ordering, and build tracking.
• Digital Manufacturing Platforms are reducing costs and lead times for custom parts through high levels of automation, using digitally-native manufacturing processes like 3D Printing and CNC Machining.

Please follow and reach out on LinkedIn if you’re interested to discuss these exciting new tech trends and explore opportunities to work together: Alex Huckstepp, Andy Fine, Blake Courter

Disclaimer: While we‘ve tried to logically group all the companies here into nice simple categories, many of them span multiple product disciplines. We selected the one we thought fit best. Please let us know if you think we’re way off.