The number 5 ranked vendor in the HFS RPA products Top 10, Kryon, is the latest automation ISV to be scooped up via acquisition. This is a continuation of the typical M&A activity we’ve been seeing with the pure-play automation software firms getting bought up by large enterprise ISV platforms, since we introduced the technology to the industry in 2012.
These enterprise ISV RPA acquisitions started with Pega in 2016 when it acquired desktop automation firm OpenSpan, before SAP, Microsoft, SAP, Mulesoft/Salesforce, Appian, Hyland, Nintex, ServiceNow, Uniphore, and SS&C made their moves into the space. With Kryon off the block, only Automation Anywhere, Laiye and WorkFusion are the last remaining scaled RPAs that are yet to IPO / get sold to one of the enterprise ISVs.
The world does not need more RPA tools… enterprise customers are focusing more on Process Intelligence (Mining and Discovery)
Our latest Pulse study covering 600 decision-makers across Global 2000 organizations shows that process intelligence (mining and discovery) is the third most prioritized emerging technology:
Now the red hot process intelligence market is the latest in-demand tech getting acquired – ABBYY (who started the trend with Timeline PI), UiPath, IBM, SAP, Appian, Automation Anywhere and now Nintex have all hopped on the PI party train. Even process mining market leader Celonis hasn’t been immune, seeing minority investments from ServiceNow.
The purpose is different though. RPA has a clear leader – UiPath and a clear #2 in Automation Anywhere, while the service providers and consultants are also feverishly cuddling up to Microsoft because it’s easier to sell to CIOs. Diehards will state Blue Prism is the best but we may as well just start calling them Chorus, which is the platform they’ll be rolled into at their new parent SS&C. The world does not need more RPA tools. But RPA is a useful widget to have as part of a tool kit when grappling with legacy integration needs. Thus the burgeoning purpose of an RPA acquisition these days is to add RPA functionality to a broader platform. Most of the aforementioned vendors who have acquired RPA ISVs do not license the tech outright. It is tucked into their broader stacks.
For process intelligence, the domain also has a clear leader in decacorn Celonis, but the whole log versus desktop discovery and how PI supports automation versus broader transformation leaves a ton of room for viable competitors like Soroco, Minit, and Skan. The PI market is still decently nascent and full of hype and hope like the early days of RPA. Thus the primary purpose for PI acquisitions at the moment is shiny new toy syndrome – tapping into the latest trendy tech to help drive up valuations and enrich automation value propositions. Don’t get us wrong – there is value in the mash-up. But limiting PI to automation enablement is like using a Ferarri to drive to the grocery store once a week (see more on our commentary about FortressIQ’s similar fate with AAI ).
So what does this new Kryon / Nintex cocktail look like?
Kryon is a desktop discovery pioneer which bundled the coolest part of its tech with RPA. So customers paid for attended RPA but also got desktop discovery. As the blush came off the RPA rose, Kryon perhaps realized its proposition was the wrong way round. Thus in 2021 we started seeing a much greater emphasis on process discovery-centric themes such as “data-led transformation” and “continuous process optimization”. They were still “full cycle automation” inclusive of process discovery, but they realized and pivoted towards the value of process intelligence. The automation vendor’s product roadmap and updates in the last year skewed towards speeding up, enhancing, and expanding the use of process discovery insights, albeit all under the context of automation.
How will Nintex change with Kryon under its wing?
As for Nintex, founded in Australia in 2006, it has grown by acquisition and created a Swiss Army knife of a platform that includes process mapping, digital forms, mobile apps, workflow, RPA, document generation and signing, process analytics, and connectors to extend and orchestrate workflows, tasks, documents, and forms across most systems and services. When we last caught up with company leadership in late 2021, they indicated their interest in adding process intelligence into the mix, supported by investment from their new majority shareholder TPG Capital.
Will Kryon be the acquisition that helps Nintex’s alphabet soup of functionality line up? Unlikely. Nintex needs to decide what it is and stop trying to surf the increasingly ill-defined automation wave. What is not automation these days? Its greatest asset is its fabulous customer base. Its best bet is to stop emphasizing generic automation and get more specific about the rich process management and digital document workflow capabilities it offers. In this context, Kyron makes sense.
The Bottom-line: Beyond this automation bubble, will we see any of the pureplay automation or PI vendors trying to consolidate and move into adjacent markets, or will we continue to see the large ISVs expanding the capabilities of their core platforms?
UiPath is likely to engage in strategic M&A at some point to justify their still lofty market cap. Conversely, Celonis might tie the knot with ServiceNow and move in the opposite direction. Yet, the biggest consolidation move thus far comes from the IT Operations space. Cisco just bid $20bn for Splunk. If successful, this could create a new AIOps/Observability behemoth. Cisco’s AppDynamics would become the clear leader in the AIOps/Observability space whilst expanding into security. Conceptually, AIOps/Observability is the pendant of PI on the IT Operations side. The diverging valuations between Kryon and Splunk are striking. And Cisco’s move provides more pointers for the next frontier for automation and PI. It will be around providing actions and ultimately automation on all the insights gleaned. Against this background, Nintex acquisition of Kryon appears a bit like a sideshow.
Kryon CEO Harel Tayeb (pictured right) before he got rich