Last week, Microsoft bought robotic process automation (RPA) company Softomotive, an acquisition which may be a sign of things to come in the RPA market, according to Pegasystems CEO Alan Trefler.
During a press call on Wednesday, Trefler said he'd been surprised by the move.
"I was surprised because Microsoft had previously taken the position that they had it already," he said. "It's always interesting when a company does that because it proves there was something they couldn't do."
Trefler described Softomotive as a "very simplistic package" and said he expected more RPA companies to be snapped up by the giants or go under, describing many of them as "horrifically overvalued".
"They're going to see, I predict, very, very sharp declines in revenue. So you'll see more consolidation, you'll see the bone collectors come in, the companies that scoop up nearly dead firms for their parts and I think that will be the legacy of the RPA business."
Trefler, of course, was taking a swing at his rivals. In 2016, Pegasystems made an RPA acquisition of its own, OpenSpan, which it subsequently integrated into its customer engagement and digital process automation platform, Pega Infinity. Like most of Pegasystems' software, Pega Infinity is used mostly by very large corporations meaning that it has been protected somewhat from the hype-driven swings in the RPA marketplace as well as the shock of the coronavirus lockdown. Trefler differentiated this platform approach from the more point-type RPA vendors which have recently been experiencing financial difficulties.
"People have realised that they're not going to get end-to-end intelligent automation from a bunch of the robots being brought in. I mean it was wishful thinking, and I think those birds have come home to roost," he said.
The pandemic has disproportionately hit smaller firms, and in addition RPA is following the traditional hype cycle in terms of expectations. In April, Silicon Valley 'unicorn' Automation Anywhere, which was valued at $7 billion in 2019, shed 10 per cent of its workforce, while Romania's UiPath, which had a similar valuation, followed the same track before the virus hit, losing 11 per cent of its 3,000 or so employees in October.
Meanwhile, the UK's Blue Prism seems to be weathering the storm a little better, raising £100 million in April, although continued financial losses led to the departure of founder and CEO Alastair Bathgate at the same time. In March 2020, I&AM company SailPoint announced a collaboration with Blue Prism to extend identity management in its Predictive Identity platform to software robots.
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