An Introduction to Engineering Software

Overview of Engineering Software

Engineering software encompasses a specialized class of tools critical for organizations engaged in new product development (NPD) or maintenance, service, and overhaul (MSO) services. These tools, including Model-Based Systems Engineering (MBSE), Computer-Aided Design (CAD), Computer-Aided Engineering (CAE), Electronic Design Automation (EDA), simulation tools (e.g., Finite Element Analysis [FEA], Computational Fluid Dynamics [CFD]), Product Lifecycle Management (PLM), Mixed Reality (XR, incorporating Virtual Reality [VR] and Augmented Reality [AR]), and Geographic Information Systems (GIS), support complex design and development processes. Industry verticals such as Aerospace & Defense and Automotive have led adoption, establishing mature digital development processes that extend to their supply chains.

The integration of Internet of Things (IoT) technology into products, from lightbulbs to lawnmowers, has increased the need for concurrent mechanical, electronic, and software design, driving up engineering software expenditure. In the Architecture, Engineering, and Construction (AEC) sector, the shift from 2D drawings in tools like AutoCAD to Building Information Modeling (BIM) has introduced reusable 3D modeling, enabling predictive maintenance and servicing. Vendors such as Autodesk, Dassault Systèmes, Siemens Digital Industries Software, PTC, Ansys, Hexagon, and Altair dominate this space, providing sophisticated tools tailored to engineering needs.

This white paper, authored by Rich Gibbons of ITAM Review and Paul Empringham, former European Sales Director at TeamEDA, explores how company leaders can evaluate the expense of engineering software and optimize its management using TeamEDA’s License Asset Manager with Usage Monitoring (LAMUM™).

Key Characteristics of Engineering Software

Engineering software is typically managed at the departmental level, often leading to resistance against oversight by Software Asset Management (SAM) or IT Asset Management (ITAM) teams. Its unique characteristics include:

High Cost per User: Engineering tools are priced to reflect their ability to save time and reduce complexity. A base CAD package may cost $8.500 per seat, while specialized tools for automotive design can exceed $60,000 per seat. Additional costs arise from managing data, processes, and upgrades, often requiring dedicated teams or outsourced services.

Dynamic User Allocation: Unlike business software, which is allocated for months or years, engineering software licenses are assigned dynamically, often over hours or minutes. Licenses are managed via central license servers (e.g., FlexNet/FlexLM from Flexera or similar systems), allowing a higher user-to-license ratio. For example, 200 licenses can serve 300 users under a “two-thirds rule,” as not all users require simultaneous access.

Complex Licensing Models: Engineering software is transitioning from perpetual licenses with maintenance to subscription-based models, often supporting cloud-based SaaS delivery. Licenses are managed as features, bundles, tokens, modules, or collections, checked in/out in seconds. Unlike business software, licensing is rarely based on CPU or consumption metrics.

These characteristics necessitate specialized management tools to ensure cost efficiency and compliance, particularly as vendors increasingly enforce geographic restrictions and conduct audits.

Differences from Business Software

Engineering software differs significantly from business software (e.g., Microsoft, Adobe) in several ways:

Cost Structure: Engineering software’s high per-seat cost contrasts with business software’s lower per-seat cost but higher volume due to enterprise-wide deployment.

Usage Patterns: Engineering software requires dynamic allocation to support project-based work, while business software is typically node-locked for long-term use.

Licensing Complexity: Engineering software uses flexible systems like FlexNet for managing floating licenses, with features like tokens or bundles, whereas business software often relies on simpler, per-user licensing.

Compliance Risks: Engineering software faces geographic use restrictions, and while audits are less frequent than for business software, they are increasing, as vendors are reporting audit revenue in earnings reports. Non-compliance can lead to significant penalties.

Management Needs: Engineering software requires detailed usage monitoring to optimize ratios, whereas business software focuses on inventory tracking and compliance.

These differences highlight the need for specialized tools like LAMUM to manage engineering software effectively.

Best Practices for Managing Engineering Software

To optimize engineering software investments, organizations should adopt ITAM best practices tailored to the unique demands of these tools:

Know Your Inventory: Maintain a detailed record of owned licenses, including purchase details, costs, usage restrictions, and expiration dates. LAMUM tracks this information, providing views by vendor, discipline, or responsible person.

Monitor Usage: Analyze actual utilization to identify underused licenses, especially during different project phases or when new capabilities are introduced. LAMUM’s detailed reports reveal usage trends, ensuring efficient license ratios (e.g., maintaining the two-thirds rule for 200 licenses serving 300 users).

Prepare for Audits and Renewals: Use usage data to ensure compliance with geographic and contractual restrictions and to negotiate favorable terms. LAMUM’s analytics help identify surplus licenses, reducing costs during renewals.

Leverage Advanced Tools: Vendor-supplied log file tools often lack the granularity needed for decision-making. LAMUM provides comprehensive usage monitoring, including real-time and historical data, to support data-driven decisions.

With cost reduction as a priority, LAMUM uncovers savings by identifying underutilized licenses and optimizing allocation, so that organizations maximize the value of their engineering software investments.

About TeamEDA, Inc.

TeamEDA, Inc., headquartered in Derry, NH, specializes in integrated software licensing management for engineering applications, including MBSE, CAD, CAE, EDA, PLM, simulation, XR, and GIS. With its proprietary License Asset Manager with Usage Monitoring (LAMUM™), TeamEDA delivers a best-in-class solution that combines asset management and usage monitoring to reduce costs and ensure compliance.

TeamEDA’s expertise helps organizations navigate the complexities of engineering software management. Learn more at www.TeamEDA.com.