The escalating demand for virtual workforces, declining cost of automation software and services, and need for a greater ease of doing business are the key factors that will propel the automation as a service (AaaS) market growth at a CAGR of 23.9% during the forecast period (2018–2023). The market generated revenue of $2.9 billion in 2017, which is projected to become $10.9 billion in 2023. AaaS enables business organizations to form a virtual workforce that can perform multiple tasks with improved efficiency, at a low cost. With the deployment of virtual workforces, the need for human intervention is eliminated.
Moreover, the surging adoption of new-age technologies in the banking, financial services, and insurance (BFSI) sector has led to the increasing utilization of automation solutions. The BFSI sector generates a large amount of data, which is now being documented and analyzed with accuracy by utilizing automation software. Moreover, the adoption of AaaS in this sector reduces the time taken for documenting, accounting, invoicing, calculations, and other important but daily and routine functions. These advantages result in the streamlining of BFSI operations and improvements in the efficiency of the overall system.
The type segment of the automation as a service market is bifurcated into rule-based and knowledge-based. In 2017, the rule-based bifurcation held the larger market share due to the deployment of automation programming solutions to automate various tasks that do not need high cognitive abilities and are least complex. Moreover, the knowledge-based category is exhibiting rapid growth in the market owing to the better ability of knowledge-based automation solutions to deal with high volumes of unstructured data.
This is why the BFSI sector is generating a high demand for automation in compliance, credit card approval, customer service, fraud detection, invoice digitization, mortgage processing, report build-up, know your customer (KYC) integration, account closing, and ledger update processes. Additionally, the AaaS software finds wide application in the retail and consumer goods industry, as it offers better customer service and curtails lead times for products. Besides, these solutions provide better cost control, higher productivity, and enhanced process control.
In 2017, the North American automation as a service market generated the highest revenue due to the advanced service industry, high IT expenditure, presence of large enterprises, and technological developments in the region. According to P&S Intelligence, the Asia-Pacific (APAC) region is expected to showcase the fastest growth in the market in the forecast years. This can be attributed to the expanding service industry, particularly in India and China, economic development, growing digitalization, and rising adoption of novel technologies.
In recent years, key AaaS solution vendors have started to adopt measures such as geographical expansion, product launches, and mergers and acquisitions to gain a competitive edge over each other. For example, in May 2018, Micro Focus International plc introduced Vertica 9.1, a new variant of Vertica, with additional features including the separation of computer resources from data storage and simplified operations, to enable clients to curtail costs of their cloud infrastructure. Further, in July 2018, Accenture plc acquired Kogentix to strengthen the Accenture Applied Intelligence services in North America by utilizing the AI and big data services and solutions offered by Kogentix.
Thus, the advancements in technology and quick digitalization of several industries have augmented the demand for AaaS solutions globally.