The following op-ed is contributed by Dassault Systèmes’ Director of License Compliance Asia Darren Tsai
Across Malaysia, manufacturers are accelerating their shift toward digital engineering. Simulation, cloud collaboration and data-driven design are now standard practice — from precision engineering firms in Penang and Johor to the electrical and electronics exporters that anchor nearly 40% of the nation’s export earnings. The direction is clear: The future of Malaysian manufacturing is digital.
Yet one critical risk remains under-discussed: Software license compliance.
For too long, unlicensed engineering software has been treated as a legal or cost issue — something for the procurement team to worry about. That view is outdated. In today’s connected data-driven manufacturing environment, license compliance is about trust, security and the integrity of the entire product development process.
In my work across Asia, including here in Malaysia, I still encounter organisations that associate compliance with audits and enforcement. But what I see on the ground tells a different story. Non-compliant software is a live business risk — one that quietly threatens product quality, cybersecurity posture and market access.
This is not a hypothetical concern. Enforcement raids in Malaysia in recent years have uncovered unlicensed copies of major engineering and design software, Dassault Systèmes products among them. Industry surveys have also flagged that a significant share of software installed on Malaysian business computers remains unlicensed. The exposure is real, and it sits closer to home than many manufacturers assume.
The risks are real, and they compound
Modern manufacturing runs on highly complex digital workflows. Engineering simulations and design tools serve as the single source of truth, informing decisions across design, production and supply chains. When unlicensed software enters this environment, it introduces risks that often aren’t visible until it’s too late.
Data risks: Unlicensed software frequently lacks critical updates, patches and validation mechanisms, increasing the likelihood of inaccurate simulations or corrupted design files. In industries such as aerospace, automotive, medical devices or semiconductor packaging — all strategic pillars for Malaysia — even minor discrepancies can carry serious downstream consequences. If the tools generating your engineering outputs cannot be fully verified, neither can the outputs themselves, and that has direct implications for product performance and safety.
Cybersecurity risks: Unofficial or pirated software often bypasses standard security protocols, making it more vulnerable to malware or external intrusion. Manufacturing today is deeply interconnected across suppliers, partners and customers. A single compromised node can cascade across an entire ecosystem. Unlicensed software doesn’t just create an internal vulnerability; it introduces an unknown variable into what should be a secure, controlled supply chain — a particularly sensitive issue as Malaysia’s semiconductor sector comes under closer scrutiny over technology controls and export compliance.
Market access risks: Global OEMs are raising the bar on supplier standards. They require auditable, compliant engineering processes as a condition of doing business. For Malaysian suppliers plugged into global electronics, automotive and aerospace value chains, this matters enormously — Malaysia’s position as a trusted node in those chains depends on more than capacity and cost. Suppliers who cannot demonstrate proper software governance risk being locked out of high-value contracts. Simply put: Suppliers who can demonstrate proper software governance and traceability are better positioned to win global business.
This is especially urgent for Malaysia right now
Malaysia’s New Industrial Master Plan 2030 has set a clear ambition: Transforming 3,000 factories into smart factories by 2030, alongside a push to establish the country as a regional generative AI hub. Add to that the National Semiconductor Strategy’s push to move Malaysian firms up the value chain, from assembly and testing into front-end design and advanced packaging. The intent across both is the same — modernise, digitalise and move up the value chain.
But upgrading technology without ensuring compliance is like building on an unstable foundation. Adopting new technologies is only half the equation. Using them securely, compliantly and sustainably is the other.
This is where the concept of digital trust becomes essential. Digital trust in manufacturing means having confidence that the data, tools and processes underpinning product development are accurate, secure and reliable. It is the foundation upon which advanced capabilities such as virtual twins, AI-driven design and real-time collaboration are built. Without it, even the most sophisticated technology stack is built on shaky ground.
Properly licensed, regularly updated software reduces operational risk, improves cybersecurity resilience and strengthens cybersecurity resilience, while ensures workflows can be audited and trusted end to end.
Compliance is not a barrier — it is an enabler
I understand the instinct to view licensing as a constraint, particularly for leaner manufacturers and SMEs watching every ringgit. But the organisations I see thriving digitally are the ones that have built their operations on governed, trusted platforms. They collaborate better, scale faster and get full value from the tools they’ve invested in, because those tools work as intended and can be verified.
Strong governance also supports the broader sustainability and accountability standards that global partners increasingly expect. As Malaysia’s manufacturing ecosystem grows more interconnected with global supply chains, the ability to demonstrate clean, traceable and compliant digital processes is fast becoming a baseline requirement — not a differentiator, but a legitimate licence to operate.
Because in the end, the future of Malaysian manufacturing will not just be defined by innovation, but by trust.
