RPA at the crossroads—to ISV or not to ISV?

The RPA (robotic process automation) market is at a crossroads. Is there life left in the RPA-centric automation market, or are customer requirements shifting toward the ISV (independent software vendor) ecosystems and disruptive providers that position themselves with comparable automation narratives, such as Celonis and Workato?

Catching up with the leadership of major RPA incumbent Automation Anywhere at the flagship event Imagine in New York offered an opportunity to take stock of the market dynamics.

The RPA market is in a state of flux

The corporate development of the three major RPA incumbents couldn’t be more different. RPA poster child Blue Prism got sold to SS&C for a moderate $1.6 billion. UiPath went from being the darling of Wall Street to seeing its market cap slashed to $7.5 billion in October 2022, in contrast to the dizzying heights of $40 billion in 2021. Automation Anywhere is somewhere in between those extremes, with an IPO as its most-likely next strategic step. Yet, there is much more activity beyond the incumbents, with many new market entrants such as Mulesoft, Worksoft, and CloudShore. Simultaneously, Workato, Celonis, and ServiceNow are articulating ambitions very close to the RPA incumbents’ expansion intentions.

Automation Anywhere sets its direction toward the “automation economy”

The theme connecting Automation Anywhere’s announcements at Imagine is what it has named “the automation economy.” Its characteristics include engaging a broad set of stakeholders, ease of use, and, fundamentally, being platform driven. In the wake of the acquisition of FortressIQ, Automation Anywhere is doubling down on positioning its offerings as an “automation success platform.” It is around the notion of an RPA-centric platform where Automation Anywhere follows UiPath to demonstrate there is enough value left in RPA by emphasizing a platform approach, even though its executives contend they are hardly using the moniker at all. It is trying to differentiate by having its digital assistant AARI integrated into many of the leading ISV platforms, thus emphasizing customer success and emerging ecosystems. AARI stands for “Automation Anywhere Robotic Interface”. In practical terms, AARI pops in platforms like Salesforce or SAP when automation-relevant activities occur.

The most noteworthy announcements at Imagine included:

• Resilient automation: An acknowledgment of the brittleness of the underlying applications, this is a tool to help enterprises understand interdependencies and keep up to date with changes occurring across their systems that could otherwise lead to automation fail points.
• CoE manager: In partnership with Shibumi (a strategic program and portfolio management software provider), Automation Anywhere launched a new COE (center of excellence) manager to help COE leaders build, monitor, and scale in a centralized command center. Users can manage everything, including idea submissions, ROI measurement, governance, and access controls.
• Pathfinder: A persona-based guidance offering that guides on best practices while providing access to community and partner-created automation blueprints. The fundamental idea of this program is to accelerate the automation journey for organizations.

Planned IPO reiterates belief in RPA-centric automation market

The new announcements mark Automation Anywhere’s progress and identify its fundamental belief that RPA-centric automation remains relevant. They will likely help Automation Anywhere talk up the addressable market for its planned IPO. Yet, the decline of UiPath’s share price and the comparatively low sale price for Blue Prism is a warning that investors might have a different view. Furthermore, as Exhibit 1 outlines, organizations focus more on hyperscalers’ and ERP suites’ digital automation platforms than on RPA. How long can RPA-centric opportunities be exploited before branching to a more holistic automation approach? Automation Anywhere clearly believes there is a lot of mileage left in RPA.

Exhibit 1: RPA is not top-of-mind for automation investments

Sample: 2021 HFS Survey in collaboration with Blue Prism, n= 200
Source: HFS Research, 2022

The Bottom Line: RPA-centric automation has some life left, but its timespan is limited.

The RPA market continues to mature, yet we question how long the RPA-centric automation market will satisfy customer requirements. Much of the requirements are likely to shift to ISV ecosystems. As HFS keeps saying, automation should not be an enterprise strategy. Rather, it should be a discipline applied to help you get the data to drive decisions to win in your markets and achieve the business outcomes you desire. Organizations should evaluate Automation Anywhere’s new capabilities but be mindful of the shifting market dynamics. Clients will welcome the broader scale of the platform, but the question remains about which lens to apply to automation requirements. Even though Automation Anywhere didn’t use the term “RPA,” it should go bolder to legacy, cloud native, and beyond.