I recently ran across this chart, based on data from HFS Research, and formatted/presented by Statista :
And this one chart explains it all. $24B in corporate spend on these three types of automation - in 2021. $34B in corporate spending by 2023. It’s a massive opportunity to have an impact in the operations of businesses world-wide. This one chart is going to drive three articles.
RPA Charts a Path to Growth
That blue band that grows from almost nothing to over $10B by 2023 is representing Robotic Process Automation (RPA) spending. And when that is the context of the world around you, you see UiPath announcing that they’re going public at a value north of $25B - but then going public and rising 23% on day one to… drumroll please… a $36B valuation - a full 60x trailing twelve month revenues.
Companies have increasingly digitized operations, but in silos, said lead director Rich Wong, a partner at Silicon Valley venture-capital firm Accel, an early investor in UiPath. The real efficiency, he said, comes from companies being able to connect those digital islands.
UiPath estimated the current market opportunity at more than $60 billion. “And we are at the very first or second inning of this process,” Mr. Wong said.
For context, UiPath’s revenue last year was reported at $607 million and grew 81% over the prior year - so the message UiPath investors are sending is that they expect a tremendous growth opportunity in front of them. The IPO netted $500M for UiPath (and another $700M for shareholders). You have to expect Automation Anywhere to make a push to go public in the near future. BluePrism is already public, and those are the big three vendors in the space.
Several smaller RPA firms have been acquired by bigger software vendors in the last year as well - IBM purchased WDG, Appian purchased Jidoka. IBM also just purchased process mining vendor MyInvenio. SAP and IBM are betting that they can acquire the technologies they need, bypassing the idea of acquiring the market leaders (which, let’s face it, are priced for perfection, and that ship has sailed).
I am here to tell you that if your business has more than $100M in revenue, and you aren’t investing in RPA software and services, you are lighting money on fire every quarter that could be flowing to your bottom line. And *that* is the reason that this category has been growing so quickly. BP3 has saved our clients millions of person hours of work with RPA tools.
I hope at this point you’re convinced that RPA is a real trend in corporate spending - and that it is happening for a reason (ROI) - and not just as part of some corporate IT fad. Leave a comment, I’m interested in your thoughts!
In the next post in this series, we’ll examine what’s going on in the Intelligent Process Automation space, which is, in my opinion, just as exciting. Please share or subscribe!