Aveva has grown into one of the world’s largest engineering software companies in recent years.

Its products have become a mainstay of the engineering sector with 33 of the top 50 commercial shipbuilders and 27 of the top 30 companies in the chemical industry using it.

And it is hoping that its Aveva Net product, dubbed “a Google for engineers”, can catapult it from an outperforming niche software group into the big league.

Its shares have risen more than 800 per cent in the past five years, giving it a market capitalisation of £730m ($1,400m). It has also acquired a reputation for reliability, unlike some of its software peers.

Growth in recent years has been fuelled by the boom in oil, gas and shipbuilding markets, particularly in Asia, which is likely to account for 50 per cent of revenues by the end of the year.

The latest upgrade to its earnings forecasts has analysts expecting Aveva will show year-on-year growth of 30 per cent in revenues and 60 per cent in profits.

Richard Longdon, chief executive, is confident Aveva will ride out fears of a global economic slowdown, pointing out that the Chinese market “is beginning to build quite a head of steam of its own”.

But it is the company’s move into product lifecycle management, through Aveva Net, that is causing a stir and Aveva hopes this will put it into direct competition with Siemens of Germany, US-based Parametric Technologies and France’s Dassault.

Dresdner Kleinwort estimates that if Aveva is able to match in the PLM market its 18 per cent market share in design systems, its share price could double to a heady £21.78. Goldman earlier this month suggested £15.60-£17.75 a share.

Large-scale engineering projects, such as offshore oil rigs, are usually refined while still being built and the designs are created on differing software and hardware. “Our customers say: ‘Our biggest headache is all these data sources all over the place where we’re trying to pull this information together and it’s a nightmare because it’s not compatible and there’s no industry standards’,” Mr Longdon said.

Aveva Net searches across a company’s entire database to enable engineers to find data on specific issues and translates information from any format, so it can be read on different hardware, whether a personal computer, laptop or mobile device. It works off streaming internet technology so technicians in the field can respond to maintenance issues. The ability to offer remote data accessible across multiple devices is based on technology developed in the 1960s when Aveva was still part of the UK government.

Aveva has its own proprietary database called Dabacon, written exclusively for the industry, and which Mr Longdon thinks is the crucial advantage.

“[Rivals] don’t have Dabacon and I know they would dearly love to. It’s proven to be unbreakable by any of the customers. In terms of volume of the information they’ve put into it, it’s absolutely colossal,” he said.

Would Siemens be tempted to buy Aveva? “They would find it attractive as the Dabacon technology is a huge amount of the intellectual property behind Aveva. It is massively valuable.”

Yet Aveva Net still remains a small part of its business. Its £3.5m of sales accounted for 6 per cent of interim turnover. However, the market is estimated to be worth £300m-£400m a year and growing at 13.6 per cent a year.

But some analysts have cautioned that others in the sector, such as Dassault, have talked for many years about PLM and it has not caught on.

“While PLM is a good product, it’s discretionary. You don’t need to do it,” said Kevin Ashton, analyst at Landsbanki Securities.

Software group ratchets up target

Aveva on Wednesday raised its full-year forecasts for a third time as demand for its engineering software showed few signs of slowing down.

Analysts at Cazenove estimate the upgrade for the year to March 31 adds about 3 per cent to revenues and 5 per cent to underlying profit, which would equate to about £127m of revenue and about £47m of underlying profit.

Aveva has often played down expectations among analysts and investors grown accustomed to outperformance from the software group, whose end markets of oil, gas, nuclear energy and shipbuilding are enjoying a boom period.

However, analysts were impressed by the latest upgrade. “This implies very impressive 34 per cent organic growth,” said Charles Brennan of ABN Amro. “Simple analysis indicates that Aveva has grown revenues at about £30m per year for the past two years.”

The shares closed up 45p at £11.35.