Automation as a Service (AaaS) Market Overview
The global automation as a service market was valued at $2,915.0 million in 2017 and is forecasted to reach $10,914.9 million by 2023, registering a CAGR of 23.9% during 2018-2023. The surging demand for business process automation, and declining cost of automation software and services are the key factors contributing to the growth of the market.
Based on offering, the market is segmented into solution and service where solution category dominated the automation as a service market in 2017, with a revenue share of 62.6%. The market for service category is expected to register faster CAGR during forecast period, with APAC forecast to register highest growth rate.
Based on type, automation as a service market is categorized into rule-based and knowledge-based; wherein rule-based category held the largest share in the market; owing to higher demand for automating manual, mundane and repetitive tasks which doesn’t require any cognitive abilities. APAC, LATAM and MEA recorded higher revenues for rule-based automation as compared to Europe and North America due to lower infiltration of cognitive thinking, artificial intelligence (AI), machine learning and natural language processing (NLP). Conversely, knowledge-based category is poised to register faster CAGR with APAC being the fastest.
Based on enterprise size, automation as a service market is categorized into large enterprises, and small & medium enterprises (SMEs); wherein, large enterprises exhibited higher penetration of automation as a service in the historical period. This was primarily due to the fact that large enterprises have more number as well as complex processes which needs to be automated to reduce redundancies and manually occurring errors. However, SMEs are increasingly adopting automation as a service solution with North America accounting for largest share in 2017. Companies such as Microsoft Corporation, Blue Prism, and Accenture plc are focusing on SMEs.
Based on business processes, automation as a service market is segmented into information technology (IT), sales & marketing, operations, finance & accounting, supply chain, customer service, and human resources (HR). Among these, IT business process category generated the highest revenue in 2017. Repetitive tasks such as reporting, batch processing, user creation/deletion, backups, monitoring services and databases, cache cleanups, file creation, deletion and storage, system integration, printer setup, and data entry are some of the tasks which are increasingly automated and are driving the growth of the market in IT business process.
Based on deployment type, automation as a service market is categorized into cloud, on-premises, and hybrid; wherein cloud deployment type held the largest share in the market in 2017. Cloud deployment type is the most viable choice due to the advantages offered by it including easy scalability, replicability, and quick deployment when compared to on-premises type. However, hybrid deployment is expected to register fastest growth rate during the forecast period.
On the basis of industry, automation as a service market is segmented into banking, financial services and insurance (BFSI), telecom & IT, retail & consumer goods, transportation & logistics, energy & utilities, manufacturing, healthcare, government & defense, media & entertainment, travel & tourism and hospitality. Among these, BFSI industry held the largest share in the market in 2017, owing to increasing demand for automation in processes such as customer service, invoice digitization, credit card approvals, detection of fraud, KYC processing, report build-up, and account closing process in the industry.
Automation as a service Market Dynamics
The key trend observed in the automation as a service market include advancements in AI and cognitive computing, and process-based business approach in organizations. Automation as a service is gaining popularity in organizations as it can perform complex tasks with utmost simplicity. It enables businesses to gain operational and strategic advantages through cost benefits, which are essentially required in a business. Business process outsourcing (BPO) and financial service providers are keen on implementing automation in their systems, as it allows them to perform repetitive and mundane tasks with improved efficiency.
The key drivers in the automation as a service market are greater ease of doing business, surge in the demand for virtual workforce, decreasing cost of automation software and services, and reduction in workforce cost.
Growing digitization has been encouraging organizations to adopt best practices that are cost-effective and offer services in a timely manner. Virtual workforce is a part of digital transformation journey that aims to automate business processes to save both time and cost. It is also one of the biggest technology disruptors that allow employees to focus actively on tasks requiring human intervention for better decision making. Thus, the growing need to automate mundane and repetitive tasks would drive the demand for virtual workforce in the coming years, thereby supporting the automation as a service market growth.
Another key driver in the automation as a service market include reduction in workforce cost. Automation as a service enable enterprises to form virtual workforce capable of working on routine and mundane tasks with high efficiency, thus eliminating the need for human intervention. It offers scalability besides reducing operational cost by as much as 25–50%, as virtual workforce has the capability to work round the clock. Unlike humans, who can only work for limited hours with a fixed number of leaves on annual basis, automated solutions work continuously, thus resulting in reduced overall operational cost and increased customer satisfaction.
The key opportunity in the automation as a service market is its adoption in the BFSI industry. The BFSI industry generates a huge volume of data that can be documented and analyzed with precision through automation as a service. The adoption of automation as a service in BFSI industry by professionals and financial executives would significantly cut the time spent on accounting, calculations, and other critical functions, resulting in increased efficiency of the system.
Automation as a service Market Competitive Landscape
The intensity of rivalry among players in the automation as a service market is moderate. In the recent past, product and service launches, partnerships, and mergers & acquisitions have been the major activities in the market. Accenture plc, IBM Corporation, HCL Technologies Limited, Hewlett Packard Enterprise Development LP were involved in mergers and acquisitions to increase their product availability in the untapped market as well as increase their product portfolio. Companies such as UiPath, Pegasystems Inc., Microsoft Corporation were involved in partnerships to expand their product capabilities and provide latest technologies to their customers.
Some of the other key players operating in the automation as a service market are Nice Ltd., Kofax Inc., Automation Anywhere Inc., Micro Focus International plc, and Blue Prism.