- Microsoft’s acquisition of Softomotive boosts the tech giant’s ability to offer robotic automation tools to enterprise clients for automating common, repetitive computer tasks.
- It also highlights the rapid growth of the robotic processing automation, or RPA, industry, one of the fastest-growing segments in tech, whose importance became even more pronounced in the COVID-19 crisis.
- Microsoft’s move has prompted leading RPA startups, Automation Anywhere and UiPath, to prepare for stiffer competition with the tech behemoth.
- Click here for more BI Prime stories.
One of the hottest sectors in the tech industry is poised for a major upheaval.
Last week, Microsoft bought robotic process automation startup Softomotive, boosting the $1.4 trillion tech giant’s ability to offer clients tools to automate common and repetitive computer tasks.
The acquisition highlights the growth of RPA, which has been one of tech’s fastest growing segments.
And its importance has become even more pronounced in the COVID-19 crisis, as first responders, government agencies, and companies turn to the software to respond quickly to the outbreak.
“Microsoft is further democratizing RPA and enabling everyone to create bots to automate manual business processes,” the company said in a blog post announcing the deal.
RPA also has become an increasingly competitive arena, which was underscored by reactions from the industry’s two leading startups — UiPath and Automation Anywhere — to the Microsoft deal.
“We are happy to compete with a company like Microsoft in this space,” Bobby Patrick, UiPath’s chief marketing officer, told Business Insider. “We do not underestimate Microsoft. This will force us to invest even more in R&D. In fact,” he added, the company was “announcing 100 new R&D open positions.”
Dayna Fried, Automation Anywhere’s senior communications director, echoed a similar view, telling Business Insider: “We welcome competition in this category and are confident in our ability to continue to lead … RPA is all we do, and we do it well.”
A surge in demand
RPA remains a relatively small market, which Gartner estimated was worth $850 million in 2018. But it’s growing rapidly, in that year expanding more than 60% year-over-year.
And the coronavirus crisis has accelerated that growth.
Recently, the industry’s three major heavyweights — Automation Anywhere, UiPath, and Blue Prism — described a surge in demand amid the coronavirus pandemic.
UiPath, for example, said it is adding more than 10 customers every day as first quarter revenue surged past internal forecasts.
Automation Anywhere says it has seen an uptick in demand in major industries, including airlines, hotels, financial services, and hospitals.
“We’ve seen strong demand for automation, particularly from customers wanting to accelerate digital transformation projects to enable business continuity and return-to-work,” said Riadh Dridi, Automation Anywhere’s chief marketing officer.
Blue Prism Chairman and CEO Jason Kingdon also said businesses are rapidly making adjustments to their operations.
“You are seeing people lean into it amid a rapid adjustment in business processes,” he told Business Insider. “Compared to other businesses, we are probably in a more fortunate position.”
And experts say the wave will continue well into a post-coronavirus world, as companies navigate new social distancing requirements and a workforce split between the physical and virtual worlds.
“Automation has been a major force reshaping work since long before the pandemic; now, it’s taking on a new urgency in the context of business risk and resiliency,” analysts from research firm Forrester wrote in a recent report.
“Firms will look to automation as a way to mitigate the risks that future crises pose to the supply and productivity of human workers,” they added.
The outlook is so rosy that UiPath may actually accelerate its plans to go public in 2021, CEO Daniel Dines told Business Insider previously.
But the sector itself is going through a transition. The Microsoft acquisition gives the company a key foothold in an industry that, until now, was largely composed of upstart players and devoid of any significant pressures from tech industry titans.
But while Microsoft now poses a threat to top RPA players, such as UiPath and Automation Anywhere, analyst Ray Wang of Constellation Research said they should be more worried about broader trends in enterprise tech. The rise of AI and other automation technologies could make RPA less attractive as a separate tool.
“RPA vendors shouldn’t be worried about Microsoft as the RPA competitor,” Wang told Business Insider. “They should be more worried about how AI and automation will become features, not standalone products, in the future, and how hyperscalers such as Amazon, Google, and Microsoft will embed these into their platforms for developers.”
Still, Automation Anywhere, UiPath, and Blue Prism are seeing a plethora of widespread use cases amid the pandemic, from both private and public sector clients.
The Centers for Medicare and Medicaid Services, one of the major federal healthcare agencies, used software from UiPath to administer a remote wellness survey for its 4,100 employees.
And in New York’s Suffolk County, CIO Scott Mastellon employed the company’s tools to automatically input data from as much as 4,000 lab tests per day into a shared repository with the local healthcare organizations — freeing up roughly 15 full-time employees from manually entering the information.
Large and small banks alike used RPA to quickly submit thousands of loan requests from small businesses looking to capitalize on new government funding.
Florida-based First Home Bank, for example, tapped Blue Prism’s software to make the submission process 30 times faster than manual entry — ultimately saving what the bank estimated at 100,000 jobs.
The technology was so successful that the Small Business Administration prohibited lenders from using it in the application process after it crashed the agency’s website.
But despite expanding books of business, there are signs some power players are bracing themselves for tougher economic times.
In April, Softbank-backed Automation Anywhere laid off a reported 10% of its workforce — a move the company said would help support a pivot to cloud-based solutions.
Prior to that announcement, CEO Mihir Shukla had told Business Insider that “interest from customers has increased significantly overall” since the start of the pandemic.