This article – “An introduction to Engineering software” was written by Rich Gibbons, ITAM Review and Paul Empringham, European Sales Director, TeamEDA. Originally published in the ITAM Review.
Here in this post, we’ll summarize the key points shared by Rich Gibbons about engineering software tools, and explore how these specialized, high-end applications differ from traditional business software.
What Is Engineering Software?
Engineering software refers to a specialized class of tools used by companies engaged in new product development (NPD) or maintenance, service, and overhaul (MSO) operations. Unlike traditional business applications, these tools are designed to model, simulate, and manage complex engineering processes.
Typically, engineering software is purchased and managed at the departmental level. Because of this, many organizations hesitate to involve Software Asset Management (SAM) or IT Asset Management (ITAM) teams in its oversight – even though doing so could improve efficiency and compliance.
Industries such as Aerospace & Defense and Automotive have led the way in adopting digital development processes. Their software ecosystems often include:
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Model-Based Systems Engineering (MBSE): For requirements and planning
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Computer-Aided Design (CAD): For virtual product development
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Electronic Design Automation (EDA): For integrated circuit and PCB validation
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Simulation Tools: Such as Finite Element Analysis (FEA) and Computational Fluid Dynamics (CFD)
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Product Lifecycle Management (PLM): For collaborative data management
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Mixed Reality (XR): Including Virtual Reality (VR) and Augmented Reality (AR)
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Geographic Information Systems (GIS): For data management related to geographic positioning
Over the last decade, the growth of Internet of Things (IoT) technologies has transformed product design. From lightbulbs to lawnmowers, products now incorporate connectivity features that require simultaneous collaboration across mechanical, electronic, and software design teams. This convergence has significantly increased global spending on engineering software.
In the Architecture, Engineering, and Construction (AEC) industries, the evolution from 2D designs in AutoCAD to Building Information Modeling (BIM) has enabled predictive maintenance and smarter project management through reusable 3D modeling.
Popular vendors in the engineering software space include:
Autodesk, Dassault Systèmes, Siemens Digital Industries Software, PTC, Ansys, Hexagon, and Altair.
How Engineering Software Differs from Business Software
1. Cost
Engineering software is designed to handle complex, high-value tasks — and it’s priced accordingly. While a basic CAD package might cost around £7,000, a high-end solution for automotive design can exceed £50,000 per seat.
Beyond the software itself, companies must account for additional costs such as data management, process oversight, and software maintenance, which together represent a significant investment per license.
2. User Allocation
Unlike traditional business applications like Microsoft 365 or Adobe Creative Cloud, engineering software typically uses floating or concurrent licenses managed by systems such as FlexNet/FlexLM by Flexera.
This setup allows multiple users to share licenses dynamically — sometimes measured down to seconds of usage. Companies often apply a two-thirds utilization rule, where 200 licenses might support 300 engineers.
3. Licensing Models
Engineering software is steadily transitioning from perpetual licenses (with maintenance fees) to subscription-based models, often as part of a broader shift to SaaS and cloud delivery.
Under these models, vendors may license their tools using a mix of features, bundles, tokens, modules, and collections, all managed by FlexNet or similar systems.
Unlike business software, engineering software licenses are rarely tied to CPUs or data consumption. However, geographic restrictions are common, and failure to comply can lead to significant penalties.
For instance, sharing a CAD license across countries or regions might breach vendor agreements unless specifically permitted under a global license. Autodesk, for example, highlighted audit revenue in its FY2020 financial results, signaling a steady rise in license compliance audits across the industry.
Note: FlexNet is a license management framework used by many engineering software products and operates independently of any ITAM tool you may already have.
ITAM and Engineering Software
Engineering software typically has a much higher cost per user than standard business applications. However, it’s also prone to underutilization, especially between design phases or when teams adopt new tools.
While vendors often provide basic license tracking, these built-in tools rarely offer the depth needed to analyze usage trends, forecast demand, or support renewal negotiations.
Applying ITAM best practices to engineering software can help companies:
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Gain full visibility into their license inventory
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Understand where and how software is used
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Ensure compliance with vendor agreements
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Identify underused licenses and right-size renewals
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Strengthen their position during contract negotiations
As cost reduction continues to be a top priority for many organizations, engineering software license management represents an untapped opportunity for substantial savings — without compromising productivity or innovation.
Final Thoughts
Engineering software sits at the heart of innovation for industries ranging from aerospace to architecture. But with high costs and complex license structures, it requires a proactive approach to management.
By combining ITAM best practices with specialized tools like LAMUM (License Asset Manager with Usage Monitoring), organizations can gain the visibility, control, and insights they need to optimize software spend and stay compliant in an increasingly connected world.
