The Global Virtual Sensors Market is expected to grow at a high CAGR during the forecast period (2024-2031).

A virtual sensor, also known as a soft sensor, is a software-based technology that uses mathematical models and algorithms to estimate or infer a physical measurement without the use of a physical sensor at that specific location. It works by processing data from a variety of existing sources—such as other physical sensors, process parameters, and historical data—to create a complete and accurate picture of a condition. Virtual sensors are a cost-effective and flexible alternative to traditional hardware, especially for hard-to-reach or expensive-to-measure points.

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Recent Global News 

• July 2025 (U.S.): A new report highlighted that the virtual sensors market is growing rapidly, driven by the increasing demand for cost-effective solutions and improved operational efficiency, particularly in industries undergoing digital transformation.

• June 2025 (U.S.): A prominent U.S. technology company announced a new AI-powered solution for its manufacturing clients that leverages virtual sensors to optimize production lines and enable predictive maintenance.

• May 2025 (Japan): The "Tunnelling Activities in Japan 2024" report noted a trend toward using new technologies like ICT-based measurement systems, which rely on data from various sources to provide insights, demonstrating a push toward more integrated sensing solutions in the country's infrastructure projects.

Segmentation

• By Deployment Type: On-Premises, Cloud.

• By End User: Aeronautics and Defence, Oil and Gas, Healthcare, Transportation & Automation, Chemical Industry, Process Industry - Manufacturing and Utilities, Consumer Technology, Electrical, and Electronics.

• By Component: Solutions, Services.

Leading Companies 

• Honeywell

• Siemens

• Elliptic Labs

• Exputec

• Intellidynamics

• Andata

• Aspen Technology

• LMI Technologies

• General Electric

• Algorithmica Technologies

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Market Trends

• Integration with AI and Machine Learning: The market is heavily trending toward the use of advanced AI and machine learning algorithms. These technologies enable more accurate and reliable virtual sensor readings by analyzing complex data patterns and providing predictive insights.

• Adoption in Predictive Maintenance: A primary driver of market growth is the increasing demand for predictive maintenance solutions. Virtual sensors can provide early warnings of potential equipment failure by analyzing data, allowing businesses to optimize maintenance schedules and reduce costly downtime.

Business Opportunities:

• Specialized Software and Algorithms: A key opportunity lies in developing and licensing specialized software and algorithms for specific industries, such as manufacturing, oil and gas, or healthcare, where unique models are needed to accurately infer data.

• Consulting and Integration Services: As businesses adopt this technology, there is a strong demand for professional services to help them integrate virtual sensors into their existing infrastructure, from on-premise systems to cloud-based platforms.

Investment Analysis

• Driving Forces: The market is primarily driven by the need for cost-effective alternatives to physical sensors, the rising adoption of IoT and cloud platforms, and the increasing demand for data-driven insights to improve operational efficiency.

• Geographical Dominance: North America currently holds a significant market share due to its advanced technological infrastructure and strong focus on innovation. However, the Asia-Pacific region, with its rapid industrialization and focus on smart technologies in countries like Japan, is expected to see the fastest growth.

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Summary

The virtual sensors market is rapidly expanding, offering a cost-effective and flexible alternative to physical sensors by using software to infer data. Key trends include the integration of AI for predictive maintenance, the shift to cloud-based solutions, and the use of virtual sensors as a core component of digital twin technology. Business opportunities are particularly strong in developing specialized software, providing consulting services, and offering solutions for edge computing, with recent news from the U.S. and Japan highlighting a push for these advanced technologies in various industries.

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