We see a compelling opportunity in software robots and robotic process automation, highlighted by one study showing 47% of US jobs could be automated within the next 10 years. The market leader is Blue Prism. The investment case is that any repetitive task can be automated by rule-based processes. This presents huge cost and productivity savings.
This recurring revenue stream licence fee model is the equivalent ‘wage’ of the software robot. While there is limited patent protection, IBM 's position as key partner underlines its technology is not easily replicable. The company maintains high gross margins.
However, it is highly operationally geared with new customers and may be lossmaking while it grows rapidly. Earnings forecasts remain conservative.