Technology that automates repetitive tasks and cost-cutting go hand in hand, so with a looming recession, it’s logical to expect RPA tools to do well. Overall, they are doing well, but in recent conversations with buyers, systems integrators, and resellers, things are not going as well as they should be.
To be transparent, we have not conducted a comprehensive market survey. Rather, we have spoken with SI’s and Resellers with a consistent story, but it’s a compelling one nonetheless. In summary, the market for RPA in Banking, financial services, and insurance (BFSI) is slowing down a bit; healthcare, on the other hand, is surging forward. The mid-market is growing, but it’s been a slow grind. Many mid-market buyers have little idea what RPA is and have been poorly marketed to and undervalued by vendors in the past. It’s an unsettling time for all as there is a double whammy of economic uncertainty alongside staff shortages.
But what made our ears prick up were two critical common themes, competition for RPA business is hotting up, and pricing is becoming an issue.
The past five years of RPA have been dominated by three names UIPath, BluePrism, and AutomationAnywhere. But there is a consensus that Microsoft Power Automate (seemingly bundled for free) is making substantial headway and gaining serious traction. So too are lower-priced RPA options from the likes of China-based Laiye.
Pricing concerns are not simply focused on the search for cheaper options but on pricing uncertainty. We shan’t name and shame, but one of the big three, in particular, has been catching the wrath of SI’s and resellers by regularly changing and raising prices and reconfiguring pricing models. Of course, pricing will always be flexible, but it makes it hard, if not impossible, to justify simple repetitive automation work to clients if the buyer is unsure what they will pay later this year or next.
Though we are analysts who look for innovation and shiny new objects in the market, we are also pragmatists and recognize that new features and functions take a long time to gain market traction. Hence we also found it interesting to hear how many are now starting to tinker with and a few deploying document processing capabilities with bots. For most, this is not IDP (Intelligent Document Processing); instead, it’s basic OCR or NLP to accelerate or heighten a bots sophistication, but it’s likely something that will gain considerable traction over the coming year. So too, were we interested to hear the discussion or at least the early exploration of the use of Task Mining in RPA projects. Again, we at Deep Analysis and the industry bubble have championed this for some time, but we are now starting to step out (albeit slowly) onto the main stage.
RPA vendors had a heady few years of being heralded as the next big thing with spectacular valuation; the last 18 months have seen them face a reality check. But RPA is not going away; instead, it is slowly finding its place within the broader Enterprise Automation world. Today’s buyers are focused on deploying a handful of bots to automate the most simple and repetitive tasks, creating a solid market for core RPA that will likely not diminish. Moving forward, an even bigger market awaits as document and language understanding (aka NLP) gains visibility in the buyer community. A recession and a focus on cutting staff will keep the momentum going. But transitioning from core RPA to more sophisticated use cases is a tricky path to follow and one that the established vendors will have to take cautiously. It’s a necessary transition, but increased competition and a buyer community largely unaware of the possibilities means they must be careful on pricing and invest much more in buyer and reseller education than they have to date.