The robotic process automation (RPA) and digital process automation markets have just received a big jolt that promises to be a harbinger for consolidation in those markets in 2020 (and beyond).
The wake-up call came from Appian, which just announced the acquisition of Jidoka—a small RPA software company in Spain. This is Appian’s first acquisition, and that alone makes the announcement a big deal. But it’s also a highly strategic move. Previously, Appian always developed new functionality in-house—or in the case of RPA, created partnerships with leading vendors—based on its assessment of the needs of the market it serves. This acquisition takes things to a new level by bringing RPA in-house, too. It’s a shout-out to the importance of RPA within the digital process automation market, and to the business strategy of Appian, a top-tier digital process automation vendor.
Even more importantly, the acquisition points to a consolidation trend and the near-term market evolution from digital process automation to intelligent business automation platforms. These expanded platforms will incorporate RPA and digital process automation alongside other functionalities such as process mining and discovery, digital decisioning, intelligent capture, AI/ML, customer journey mapping, predictive analytics, process business applications, and other intelligent capabilities.[i] (See Figures 1 & 2.)
The Appian/Jidoka acquisition is a big deal for three reasons:
- A native RPA offering will add more fuel to Appian’s competitiveness and growth in digital process automation. Appian is moving quickly to integrate the Jidoka RPA platform with the full Appian stack.[i] Appian’s strategy is sound: it will not sell the newly named Appian RPA product separately but rather position RPA as an additional feature of digital process automation. This dovetails with Appian’s point of view that process automation tackles business processes while RPA focuses on tasks, and it takes both to fully automate work activities. Pricing the new, cloud-based RPA offering at $5,000 per month for an unlimited number of bots will undoubtedly attract new buyers to Appian, help Appian extend its footprint with existing customers, and generate accretive revenues from new RPA sales. Most importantly, Appian believes that acquiring RPA is another step in the digital process automation market’s inevitable consolidation. We agree with that viewpoint and last year predicted RPA/digital process automation as a near-term trend.
- This acquisition will shake up the other digital process automation vendors. Until recently it was almost impossible for process automation vendors to buy RPA companies because of excessively high valuations.[ii] Appian has shown another way to go about it—look for small, innovative RPA software providers rather than trying to hunt elephants. Up until Appian made this acquisition, there were only three digital process automation players (that we know of) offering native RPA alongside process automation. They are Kofax (which acquired Kapow in 2013), Pegasystems (which acquired OpenSpan in 2016) and Nintex (which acquired EnableSoft last year). Given Appian’s prominence in the industry, this latest acquisition will have consequences, resulting in more process automation vendors (e.g., OpenText, IBM, and others) finding a way to make acquisitions and move beyond RPA partnerships alone.
- RPA acquisitions will accelerate the move to intelligent automation platforms that not only encompass RPA and digital process automation but also encompass many other technologies. As Figure 1 shows, not only will intelligent business automation platforms include RPA and process automation, but also, for example, cognitive services, intelligent content, engagement technologies and many others. As a result of this on-going transition from process to business automation, the digital process automation market will be in rapid transition from 2020 to 2025. Figure 2 shows show how the digital process automation platform has evolved and how it will continue transitioning over the next five years. As a result, the market, and its buyers, are already on the road to an integrated, intelligent business automation platform that surpasses process automation and RPA alone. Watch this space.
[ii] (Previously, Appian was teamed with Blue Prism, Automation Anywhere and UI Path and going forward, Appian will still partner with Blue Prism. Appian and Blue Prism have approximately thirty joint customers.
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