Will WorkFusion’s “Free RPA” destroy the RPA market as we know it?

January 05, 2017 | Tom Reuner

 

When somebody offers me something that is allegedly free, I tend to get skeptical, if not outright cynical, about possible motives or hidden catches. This is especially the case in the emerging intelligent automation market, where the focus needs to be centered on making automation work effectively and driving value from digitizing legacy processes, not saving some money on software licenses.

I had the same reaction when I first heard about WorkFusion’s plan to offer core RPA capabilities for free. In a nascent market that is clouded by the reluctance of many stakeholders to share their views and more importantly playback experiences, leading to extremely blurred perceptions, the move to commoditize core RPA, before it even has become mainstream could open a Pandora’s Box. In mythology, Pandora’s Box contained all the evils of the world. So what is really in WorkFusion’s box? Is it rather an altruistic box helping clients to climb to the stairway not to heaven but to digital operations as the company did put it?  Before I let my cynical inner-self rip, I listened to WorkFusion’s webinar to find out more details. So, let’s first look at what WorkFusion is actually planning to launch. Dubbed RPA Express and planned to be launched in Q1 2017, the new product is said to offer the core RPA capabilities including:

  • Bot Recorder
  • Developer Studio
  • UI Automation Drivers
  • Bot Libraries
  • Scheduling
  • Control Tower
  • User/Role Management

While RPA is not defined across the industry, those suggested capabilities capture the value propositions of the leading RPA tool providers such as Blue Prism, UiPath, and AutomationAnywhere. Thus, WorkFusion’s strategic move to offer these for free could have profound implications for a market that has not yet reached maturity.

The two fundamental questions we have with WorkFusion’s aggressive move:

  1. Will it lead to commoditization before we have even reached market maturity and
  2. How this move could impact the leading RPA tool providers – and how will the respond (if at all)

WorkFusion’s move will accelerate the move toward transformation

WorkFusion suggests the motivation for offering RPA Express for free is to accelerate customer’s journey toward cognitive automation including crowdsourcing, chatbots and a broad integration of machine learning. As WorkFusion is not a shy organization, it reminded the audience in a recent webinar that it had launched several industry firsts including:

  • Train Machine Learning with Crowdsourcing
  • Virtualize data science
  • Combine RPA with broader cognitive capabilities
  • Build-in Tableau analytics
  • Automate conversations through chatbots and other means

Fundamentally, free RPA tool sets will lower the barrier to entry. Organizations can trial capabilities without having to worry about licensing costs. WorkFusion was at pains to stress that RPA Express is not a community version, requires costly upgrades to delivery enterprise-wide results or containing padlocks on higher value features. Provided these claims will get corroborated, the move could accelerate the move toward understanding RPA as part of transformation projects rather than a short-term focus on cost elimination, often on task rather than process level. Suffice it to say, at the same time it WorkFusion will strike at the heart of the RPA tool providers. On the service provider side, many will be chuffed by the elimination of licensing costs, but at the same time, many have established practices for Blue Prism, AutomationAnywhere or UiPath and will not easily jeopardize these relationships at least in the short term. However, the missing piece in the jigsaw is the talent that can integrate RPA capabilities – regardless whether they are free or not – into broader service delivery strategies. Therefore, partners will charge for training around RPA Express as well as helping to advance the journey toward higher value, cognitive automation capabilities. Nothing in life is really free.

Move could impact valuations of RPA tool providers

RPA Express is all about free tools for structured data. Yet, as we have stated repeatedly the industry needs to embrace the broad Continuum of Intelligent Automation (IA), with a strong focus on integrating unstructured data and building out cognitive automation capabilities. It is here where WorkFusion’s Smart Process Automation (SPA) is providing the value add and will thus provide the revenue streams. WorkFusion’s starting point in IA was Crowdsourcing and Machine Learning. Initially, it had used the RPA moniker to get a seat at the table for the decision-making on automation projects before building out broader RPA capabilities. The core RPA discussions continue to center on Blue Prism, AutomationAnywhere, and UiPath. It is these providers that could lose most from this move. Their licensing models will come invariably under scrutiny. The key question here is, how quickly can those providers accelerate their roadmaps in building out operational analytics and cognitive capabilities to buffer against potential losses in licensing revenues? Suffice it to say, I expect Harvey Ball graphics depicting the differences between RPA Express and the leading tool sets any time after the expected launch. And I can hear already voices claiming that WorkFusion has only limited capabilities in RPA to start with and can therefore easily suggest free offerings. However, in a market where very few understand the technical details of RPA tools and their impact on broader process flows, perceptions are likely to remain as blurred as they are now.

But there is possibly another subplot here. I believe that the leading RPA tool providers will be absorbed over the next 18 months by M&A. Thus, free RPA tools could weigh on valuations while management of RPA tool providers will be forced to focus on accelerating their roadmaps as the key value proposition is being forcibly commoditized. RPA Express could easily be seen as a spammer thrown into those M&A scenarios. Having said that, Blue Prism’s share price has not yet suffered, but then again, the broader market does not yet have seemed to digest the news of WorkFusion’s move.

Bottom-line: Disruption, but at what price?

We are seeing the move as a strong positive for WorkFusion as it will accelerate its customer acquisition but equally the progress toward higher value services. For the broader industry, however, the jury is still out. While WorkFusion might succeed in squeezing competitors boosted by a strong balance sheet, the market might lose important educators on the broader notion of IA. Obituaries on the demise of RPA might be premature, but the stakes have been raised significantly. It could hasten M&A in either direction.  However, it could be a case of forced commoditization that carries significant risks for the broader market. A “self-medication” with free RPA tools might throw the hard-fought progress in understanding RPA as part of transformation projects off track. Put in a nutshell, it could be a highly disruptive move. It will take more clarity from WorkFusion’s partners to understand how they are planning to balance their ecosystems and what the detailed strategies are. Therefore, be braced for disruptive counter moves.

Posted in: Robotic Process AutomationIntelligent Automation

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1 Comments

4 Comments

  1. Johnny Ramondino
    Posted Jan 05, 2017 11:43 AM | Permalink Reply

    Phil, Thanks for this article. I think you are bringing to the forefront something that everyone in the industry was a little puzzled by and many even quickly dismissed as tat another marketing stunt. From Workfusion's POV it makes sense to provide RPA as part of their portfolio so their is no need to depend on others just as RPA providers are adding OCR down their value chain. In either case I don't see the market flocking to one solution but the RPA market immaturity certainly makes it more interesting. My questions:

    1. Will WorkFusion's RPA offering stack up against the three you mention? If not, I don't think it will hurt them as much as it may allow WorkFusion to speed up theor market penetration.
    2. How quickly can WorkFusion get available skills on the market for their RPA offering?

    What a great start to the new year! Keep em coming.

  2. Posted Jan 05, 2017 09:16 PM | Permalink Reply

    Thanks, Johnny, I take it as a compliment that you assumed Phil had written the blog ;)

    Much around automation is in the eye of the beholder, therefore the feedback from clients is not consistent. As I suggested WorkFusion's focus is more on cognitive automation. The positioning and capabilities around RPA are a conduit to sell a much broader proposition. Thus, my reading is that RPA Express is less about competing with Blue Prism, UiPath and AutomationAnywhere in "core RPA" but more about disrupting the emerging ecosystems around these technologies. I am not sure I am subscribing to the argument that RPA has become table stakes. Too many failed projects and a lack of talent that really understands the impact of those technologies on complex process flows seem to speak against that.

    With that in mind, WorkFusion is ramping up aggressively their partner channel to extend their reach and scope, but again not just confined to RPA. The way I think about it is, over time we will see automation ecosystems emerging. Thus, this move should be seen as an opening gambit for dominance in such broader ecosystems - but not for dominance in "core RPA".

    Tom

  3. Rob
    Posted Mar 03, 2017 01:10 AM | Permalink Reply

    Tom, any further news on the release date of RPA Express. Ive tweeted them, but no response. Is there a chance that this is all vapourware?

  4. Posted Mar 03, 2017 07:14 AM | Permalink Reply

    I believe it is forthcoming, Rob. From my discussions with WorkFusion, they appear very serious about all of this.

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