❌The Myth: MedTech Is Purely a Hardware Industry
Ask most people to picture a medical device, and they will think of a scalpel, an implant, or a diagnostic machine. That image is understandable but increasingly incomplete. The idea that MedTech is defined by physical products belongs to another era of healthcare. Today, some of the most impactful “medical devices” exist entirely as code.
✅The Reality: Software Is Eating MedTech
The global Software as a Medical Device (SaMD) market was valued at approximately USD 1.9 billion in 2023 and is projected to reach USD 9.5 billion by 2032, growing at a compound annual rate of around 19.5% (Grand View Research, 2024). These figures reflect structural change, not a trend.
Regulatory frameworks have responded accordingly. The EU MDR and IVDR now include detailed provisions for software as a standalone medical device. In the US, the FDA has published dedicated guidance on SaMD, predetermined change control plans, and AI/ML-based software. The IMDRF has issued a dedicated framework for SaMD classification that has been adopted by jurisdictions globally.
The message from regulators is unambiguous: software is a medical device, and it will be treated as one.
Three Shifts Reshaping the Industry
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Standalone software as a primary product
Clinical decision support tools, AI-assisted diagnostics, and mental health apps are registered as medical devices in their own right. In the EU, a mobile application that interprets patient-reported symptoms and provides a treatment recommendation may qualify as a Class IIa or Class III medical device depending on its intended purpose and associated risk.
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Software-hardware convergence
Connected devices like wearables, implantables, remote monitoring systems generate continuous data streams. The hardware is no longer the product; it is the interface. The clinical and commercial value lives in the algorithms that analyse, interpret, and act on that data. Manufacturers who treat the software component as secondary are misreading where their regulatory and commercial risk actually sits.
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Data as infrastructure
The European Health Data Space (EHDS), adopted in 2025, establishes the legal and technical framework for cross-border health data flows within the EU. For MedTech manufacturers, this is not a distant policy development. It directly affects how real-world evidence is gathered, how post-market clinical follow-up is conducted, and how AI models are trained and validated. Companies that are not building data governance into their regulatory strategy today will face significant catch-up costs.
Regulatory Implications
Software-driven products bring a specific compliance burden that hardware manufacturers may underestimate:
- Classification under EU MDR Annex VIII Rule 11 must be assessed carefully; AI-based diagnostic software frequently falls into higher risk classes than manufacturers expect.
- Cybersecurity requirements are now a core element of technical documentation, not an IT afterthought. Both the EU MDR and the US FDA have published explicit cybersecurity guidance for medical devices.
- Predetermined change control plans (PCCPs) allow manufacturers to pre-specify how AI/ML models may change post-market without triggering a full re-approval cycle but they require careful regulatory planning upfront.
- Post-market surveillance obligations for SaMD differ in practice from those for physical devices. Anomaly detection, algorithm drift, and user feedback loops must be addressed in the PMS plan.
What This Means in Practice
MedTech manufacturers operating only in the physical product space are already competing in a narrowing market. The growth is in connected, data-driven, and software-centric solutions. Companies that recognise this early will build the regulatory infrastructure quality management, clinical evidence, cybersecurity documentation before it becomes urgent.
Those that persist with the hardware-only mindset risk being outpaced by software-native entrants who understand that regulatory compliance for SaMD is a competitive differentiator, not merely a cost.
Bottom Line
MedTech is no longer defined by its physical products. Software, data, and connectivity are now central to both the clinical and commercial value proposition. Regulatory frameworks have already adapted. Manufacturers who treat software as a secondary consideration do so at their own risk and their own competitive disadvantage.
Navigate SaMD Compliance with Confidence
EUMEDIQ supports MedTech manufacturers with SaMD classification, technical documentation, and post-market surveillance strategy across EU, UK, US, and global markets.
Learn more: www.eumediq.eu
Sources
Grand View Research (2024). Software as a Medical Device (SaMD) Market Size, Share & Trends Analysis Report, 2024–2032.
IMDRF/SaMD WG/N10FINAL:2013. Software as a Medical Device (SaMD): Key Definitions.
European Commission. Regulation (EU) 2017/745 (EU MDR), Annex VIII, Rule 11 — Software classification rules.
FDA (2023). Marketing Submission Recommendations for a Predetermined Change Control Plan for Artificial Intelligence/Machine Learning (AI/ML)-Enabled Device Software Functions.
European Health Data Space Regulation (EU) 2025/327, Official Journal of the European Union.
FDA (2023). Cybersecurity in Medical Devices: Quality System Considerations and Content of Premarket Submissions.