The Force Awakens
Automating Intelligently/ Blue Prism Buy PT 1250p/ Actual Experience Buy PT 450p.We remain extremely positive about the impact of software bots on productivity, job satisfaction and ROCE for businesses deploying them successfully. As a result, we believe this is already a substantial market which will grow rapidly for many years to come.
In this note we examine the market drivers, the challenges and solutions on offer and start to identify some of the best placed companies. We continue as buyers of Blue Prism and raise our price target to 1250p on the back of stronger long term growth. We also identify AntWorks* and Thoughtonomy as an accomplished and innovative newer entrants.
As the industry grows it is giving rise to a range of new competitors, many with new skills and approaches, but we believe more strongly than ever that the market is large enough to create a number of large (>$100m revenue) profitable players.
Simply put, software automation - or software bots - is software that automates a number of computer based processes. Software bots in the Robotic Process Automation (RPA) space can provide a scalable, efficient and low cost digital workforce. By replacing a traditional workforce with a digital one it can be both more cost effective and flexible as well as also increasing quality, consistency and accuracy.
It has been noted that RPA is likely to cause disruption to employment with 15m UK jobs said to be at risk from automation. Although, we do not believe this will lead to higher long-term structural unemployment, there will inevitably be often severe dislocation. This however, presents the opportunity for humans to assume more strategic and creative roles whilst Software Robots complete the routine tasks.
The main focus of RPA at the moment is on structured data, which is standardised data found in forms and spreadsheets for example. The future challenge and subsequent opportunity lies in the ability to dissect and analyse unstructured data found in things such as images and emails.
The software bot also has a number of additional applications, and we also flag up Actual Experience (PT 450p) as a leading AaaS (Analytics as a Service) player, utilising cheap and ubiquitous software bots in a novel new way.
In conclusion, we believe the winners in the space will combine enterprise grade solutions which link with cognitive platforms. These are best sold, implemented and supported via leading professional services firms. Both Blue Prism and AntWorks* look well placed in this regard. We also remain buyers of Actual Experience.
*Whitman Howard acts as an advisor for AntWorks
Actual Experience is engaged in analyses the digital supply chains that deliver digital products and services around the world. Co. provides Analytics-as-a-Service to its Channel Partners. Co.'s Channel Partners are Verizon, which is a telecommunications companies providing a range of services including voice, messaging and data across mobile; Vodafone, which providing a range of services including voice, messaging and data across mobile and fixed networks; Accenture, which providing unmatched services in strategy, consulting, digital, technology and operations; and A Forbes' Top 100 global brand, which provides professionals with the intelligence, technology and human capabilities.
Whitman Howard is an independent institutional stockbroking and investment banking business focused on servicing the needs of our corporate clients and institutional investor base.
The company began trading in 2011 with a team of highly experienced market professionals and the goal of building a leading capital markets business in an entrepreneurial environment.
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