Is UiPath prepping for a Microsoft sale?

October 24, 2019 | Phil Fersht

We've been speculating for years about who will eventually buy who in this robotic software world.  However, when it comes to "outright" RPA acquisitions, so far it's only been bite-sized stuff like Pega/OpenSpan, SAP/Contextor, Blue Prism/Thoughtonomy.  While there have been a lot of strategic partnerships and development initiatives between "Big Iron" software and emerging RPA firms, noone has - as of yet - made a concerted move to outright acquire one of the "Big Three" of Automation Anywhere, Blue Prism or UiPath.

However, if you happened to catch Microsoft's earnings call last week:

"Now let's turn to our workflow cloud Power platform. Automating workflows across every function will be key to productivity gains for every organization. We are building Power platform as the extensibility framework for both Microsoft 365 inclusive of Microsoft Teams, as well as Dynamics 365. It brings together low-code, no-code app development, robotic process automation and self-service analytics, enabling everyone in an organization to build an intelligent app or workflow where none exists.

Power platform already has more than 2.5 million monthly active citizen developers. Power apps helps domain experts, those closest to the business problem to design, build and publish custom apps fast. And 84% of the Fortune 500 have already created Power applications."

Oh, the mind boggles when you think where this conversation is heading... so

Is it any coincidence that UiPath is rightsizing itself?

One of the Big Iron software houses has to take the plunge soon. Firstly, we have long-speculated that Microsoft may be the likeliest endgame for UiPath, while IBM may be the ultimate home for Blue Prism.  Meanwhile, AA has been fluttering its eyelashes at the likes of IBM, Microsoft, Salesforce and Workday.

UiPath is popular with developers, which appeals to the Microsoft culture. One of the major reasons UiPath has experienced such popularity is its Ui alignment with developers' needs.  Blue Prism has always been the darling of the business process executives who hate code, while the low-code appetites of developers eager to learn RPA have drawn many of them to UIPath.   AA hopes its new platform A2019 is a bridge between both worlds.

Daniel Dines (UiPath CEO) came out of Microsoft, understands the technology overlaps and how they operate.  While one can argue that much of the UiPath tech is already present in the Microsoft UI automation ecosystem  Microsoft clearly lacks the know-how to pull it all together into one coherent platform that puts AI+OCR+Workflow+RPA+BI in front of both the business and IT C-Suite.

The RPA market "standalone" isn't where the broader opportunity lies, but it is a critical piece of the jigsaw.  As we pointed out over the weekend, the market UIPath (and others) has been hyping up is far bigger than what RPA is currently addressing. It's the whole discovery, analysis, mining and management of processes and transformation.  The recent acquisitions of ProcessGold and StepShot are clear moves in addressing the broader process automation opportunity.

The Bottom-line - After seven years of robotic love-affairs, is it time for the market to get serious?

Let's face facts, it's taken an awfully long time for the tech majors to understand what RPA is all about.  Low-code software that business users can operate to fix creaking workflows and tasks?  Actually digitizing manual workarounds instead of using APIs?  Heaven forbid...

But the world of enterprise software is bored, there's only so much you can bleat on about AI without actually delivering anything real.  Rolling your sleeves up and actually using technology to help you redesign processes has always been the Holy Grail, long before ERP came around over two decades ago.  RPA is the first time the worlds of real business processes and IT have come together where both business and IT professionals have no choice but to lock heads and figure out solutions that address highly competitive markets.

The tech purists will tell you that Microsoft does not need UiPath - that they have the tech already.  However, what Microsoft does not have is a 1000+ customer base purchasing RPA specifically because it is RPA.  A customer base where the prime customer is not sitting in the CIO's organization.  It's also clear that the tech majors are all waiting to see who blinks first with RPA.  Just buying up some kit (i.e. SAP/Contextor) isn't going to do much.  Partnering only really works when there is real skin in the game and a colossal global services network to implement and support the product.  UiPath can claim is has built a pretty decent global delivery infrastructure and channel to market - and its huge show in Las Vegas was clearly designed to show that off to the world

The bigger issue is money, and how much these big guys are really prepared to spend on this.  Sometimes a few billion add weight to an area to get attention, but the $7bn number UiPath was declaring was probably turning them all off.  Maybe a little more realism, a little belt-tightening will reinvigorate the desire to take the plunge and make this market real... And there's also Blue Prism, whose market cap is well under $1 billion these days, and Automation Anywhere who's CEO likes to talk about IPO a lot these days.  All three provide a plug-in infrastructure to the likes of a Microsoft which has ambitions in the process automation world.  But - again - who is going to blink first, and did we just see UiPath blink?

Posted in: #CrazymergerideasRobotic Process AutomationEnterprise Integration Platforms

Never Miss A Story

Sign up for the HfS Research newsletter and get the best research delivered to your inbox weekly.

2

1 Comments

2 Comments

  1. S. Sarangi
    Posted Oct 28, 2019 01:36 PM | Permalink Reply

    1- On the RPA customer outcomes front, much remains to be done. This is the real proof of the pudding. All sharks will look beyond hype for evidence of sufficient customer success. 2- A root cause of 1 above is the pending work that is required to upgrade existing RPA products - as witnessed by continued major product revamps by ‘big 3’ vendors. This will play out over at least next two years.

    However, the recent hullabaloo seems to be a case of poor leadership communication. A more seasoned leadership team would have handled the matter of layoffs in a more matter of fact and convincing manner. This points us to the perennial issue of suitable management at the helm of high-growth firms.

  2. Arthur Leitão
    Posted Oct 28, 2019 01:39 PM | Permalink Reply

    There is a promise for automation anywhere to work on Linux, and I think it is a natural way for other IBM acquisitions (RedHat). If Microsoft doesn't want to waste time, it's necessary to create your own or pay that small fortune.

    https://www.linkedin.com/in/arthurleitao/

Post a Comment

Your email is never published nor shared.