 Live from Las Vegas, it's theCUBE, covering UiPath Forward Americas 2019. Brought to you by UiPath. Hello everybody, welcome to Las Vegas. This is day two of the UiPath Forward Conference, UiPath Forward Three. So what UiPath does is they name their events, one, two, three, last year we were at Miami, the year before was one, their North American event, which was in New York City, here's three at the Bellagio Hotel in Las Vegas. 3,000 people here for this rocket ship company, growing revenues, they've got over $300 million in annual recurring revenue. That's up from 25 million in 2017. So you're talking about a greater than 12x increase in annual recurring revenues, over 3,000 employees now. Daniel Dinez, the CEO, just named the industries, the tech industry's latest billionaire. He's now dressing like a billionaire. Last year he was in a T-shirt this year, he looks more like a CEO, so we're going to be interviewing him later on today, but let's get right into it. The keynotes today comprised Guy Kirkwood who gave up some predictions, and that's where I'm going to go. I'm going to talk about his predictions, I'm going to make some comments on those predictions and give you some thoughts of my own, maybe throw in a few predictions from Dave Vellante. And then Craig Leclerc from Forrester gave a keynote. He was on theCUBE yesterday, very knowledgeable analyst, probably one of the industry's top analysts, and I'll make some comments on some of the things he said. So let me get right into it. Guy Kirkwood, when you do these predictions, you know, he put them out there, of course, he's smart, he's going to do these things and make them somewhat self-serving for RPA and UiPath. So I'll make some comments on that. His first one was there'll be a global economic downturn. I can't remember if he actually pinned a date, but I think he said it's pending. Let's say 2020, he said that's good for RPA. Why would that be good for RPA? Because if there's an economic downturn, people are going to want to get more for less and they're going to want to automate, they're going to want to spend money and get fast ROI, and RPA potentially is a way to do that. It's not necessarily good news for low-wage workers. They're doing mundane tasks, but nonetheless he made the statement that it's good for RPA. I would say this, I think a lot of this is going to depend on 2020 and the election in the United States as to what happens. I think it's very unclear right now. You saw the Democratic debates last night. It's very clear that there's a swing to the left. Elizabeth Warren is kind of a period to be the front runner, so I would make this prediction. I actually think Trump is going to win the election. Don't hate me for saying that, all you Trump haters. But I think whatever happens, maybe he doesn't win the election, maybe he wins the election, and then the subsequent election goes to the Democrats. But I think there's going to be a major swing back to the left. And I think that what that's going to do, it's going to open up the checkbooks and put more pressure on debt. And I don't think there's a real issue right now of too fast economic growth of inflation. It's obviously something economists watch. But if interest rates start rising back to the Clinton era levels, that means big trouble for the economy. But I don't see that necessarily happening in 2020. I think 2020, we'll see some moderation. I definitely think we're seeing less tech spending expected for Q4. And I think that'll spill into 2020 based on the ETR, Enterprise Technology Research Data that we see. But I think it's actually a healthy pullback. I kind of agree with Guy on that front. And I actually think it is good for RPA. I think RPA is one of those sectors that you see in the ETR surveys that is gaining share relative to other tech spending. And I think that will continue in any downturn. So I expect softness, however you define downturn, I don't think it's going to be falling off the cliff or a disaster, but I definitely think spending will be more tepid. Second thing he said is RPA will become the YouTube for automations. Think of YouTube as a container. I'm not going to spend a lot of time on this one. I know YouTube and RPA, I think one's a consumer, but his analogy was around a container for automations just like YouTube is a container for video. I think they have aspirations to scale like YouTube. But I mean, look at RPA is right now back office B2B business function. And I think it'll stay that way for a couple of years. I'll make some statements on that. Automations will move from snowflake to snowball. What does he mean by that? Well today, automations are all unique. Every company, and he made this statement, feels like its automations are a snowflake. They're, everyone is different. And what he's predicting is that over time these automations will become, there'll be more commonality in those automations. I think that's true. I do think while there are definite business processes that are unique to companies, that there are a lot of similarities. Things like the UiPath marketplace will allow people to share automations. And I think there will be much more commonality. I think it's critical for scale. Number four, he said students entering the workforce will force employers to use automation. He didn't give a timeframe on this, but I'll tell you one thing, it ain't 2020. I got three kids in college, well two kids in college, one that's recently graduated. Let me tell you something, kids in college have no clue what robotic process automation is, let alone what the acronym RPA stands for. So, it's going to take some time. Asked 100 college kids what RPA is, and I bet you maybe one or two have heard of it, even know what it is. So, that's not happening today. I think that'll take probably another two cycles of graduates before that really hits. We heard from the college of William & Mary yesterday, where Tom Clancy and the college have partnered to really push an RPA into the curriculum, and I think that's great. I mean, I talk to Tom Clancy, he's a superb expert in the area of training and education, but that's going to take some time to bake out. So, I would put that, again, guy didn't give a timeframe, but I would say that's five to eight years away. Number five, we'll continue to be surprised by the intelligence of machines and the stupidity of humans. What he meant by that was, there are some things that humans do that are repetitive, that are mistakes. They make the same mistakes over and over and over again, and machines won't necessarily do that. I do think this, that the gap, or the number of things, if you make a list between the number of things that humans can do versus what robots can do, whether physical or software robots, that gap is closing, there's no question about it. Like, you know, short few years ago, robots couldn't even climb stairs, and now they can. And you're seeing things like chatbots improving. There's still, you know, a lot of them are still crap, frankly, but you're going to see a lot of money go into chatbots. And so I do think that that gap will close, and I think it's going to come down to education and creativity in terms of the impact on job loss, and I'll make some comments about that in a moment. His sixth prediction, there are seven overall, so bear with me here. Automation will be discussed in the United Nations, and the context will be jobs, wages, and global economics, that's already happened. It's already happening. People are concerned about the impact on productivity, and so, you know, that's a lock. The last one was consolidation amongst RPA vendors, and automation-led services will accelerate. I totally agree with this. He mentioned work fusion and AMP works as two companies that are going to, where we're going to see consolidation. We've already seen it, SAP got, bought Contexta, so you've seen the big whales come into this market. Infor talks a lot about RPA. Anytime there's a fast-growing software segment like RPA, and there's a leader like UiPath, with two other companies, you know, on their tail, Automation Anywhere and Blue Prism. Automation Anywhere and UiPath have a ton of dough. You're going to see the big software companies say, wait a minute, I need a piece of that pie, because software companies generally feel like every dime that's spent on software should go to them. That's the mentality of an SAP, or an Oracle, or even IBM, and so, unquestionably, you're going to see some consolidation. He mentioned service providers as well, companies like Symphony. I've been making a lot of comparisons this week between what I see in the UiPath ecosystem, and what I saw way back in the early part of this decade in the ServiceNow ecosystem. You had a company, for instance, like Cloud Sherpa, which nobody ever heard of. They were a service management, ITSM expert, and Accenture eventually snapped them up and came in. You saw DXC or CSC at the time do the same thing. And so, I think you'll see the same thing here in this ecosystem. You know, this ecosystem here is happening. It's buzzing, but it's got to grow. And you're already seeing Deloitte, and Cognizant, and EY, and PWC, the big guys could have jumped in here. I often say that SIs love to eat at the trough, and they know where the money is. And the money appears to be in RPA, because really, there's so many screwed up processes inside companies, RPA can actually give them a quick ROI. Now, let me turn to some of my thoughts on this. Let me talk about the job impact of automation. The vendors would have you believe that it's all good, that people love this, and when they bring in software robots, it makes their lives better because they're doing less of the mundane tasks, and they're able to focus on new, more strategic things. To a customer that we've talked to here in theCUBE, and also privately, this is true. People do love your software robots, and we heard Jean Younger yesterday from Security Benefit. If you see it, most excited she's ever been. Having said that, Craig LeClaire's research shows that over the next 10 years, we will see a 16% job loss, and jobs will disappear, roles will disappear. And by the way, Forrester is at the low end of the spectrum of that forecast. Most forecasts say 30, 40% of jobs are going to get disrupted. I tend to believe that Craig's number is probably a better one at the lower end of that spectrum, but that's still a huge number. You are going to see unquestionably job impact from automation. Absolutely no question in my mind. I think you're already seeing it. Now look, humans have always been replaced by machines, but for the first time in history, we're seeing cognitive functions replacing humans, and that is going to have a big disruptive impact on the workforce, and the other piece of this, I would predict we are going to see a productivity boost. I think a significant productivity boost. Let me share you some data with the Bureau of Labor Statistics, which you may look at that in question, some of their methodologies, but over the long term, I think it's a viable metric. From 2007 to 2018, productivity grew at 1.3%. That's an anemic rate. From 1947 to 2018, productivity grew at 2.1%. 07 to 18.5, the long term productivity gain. 2000 to 2007, 2.7%. What we saw in Q1 of 19, 3.4% uptick in productivity. Is that sustainable? I think it is. I think we're now entering a new phase of productivity growth, and I think it's going to be driven by things like RPA and other automation. So that is going to have an impact back to the earlier statements on job loss. Okay, the other thing is, I want to talk about the forecast, the market. Last year at UiPath 2 in Miami, I said that I thought that Forester's forecast was low. They had like $4 billion by 2020, and I sort of called out Craig Leclerc on that, and so I said this could be $10 billion by 2020. Now, he clarified that today up on stage. I was including services in my prediction, and Craig Leclerc follows this market much more closely than I do, so I'll defer to him on that. But he put in the services number, and he showed the services to license ratio of around three X or so. He actually had this very similar number, about $10 billion by 2020, so I felt good about that, my back a napkin prediction. He used to do this stuff at IDC for a living, so actually got a little knack for that on an analog basis. Then he showed sort of his forecast for the market, growing at a very linear rate. Now I would say this, I think hot markets like RPA, they generally don't grow at a linear steady rate. If you look at some of the emerging forecasts that, for instance, IDC had in my years there, we would always have these linear, smooth growth forecasts. Some of those big markets, think early days of the PC, the internet, flash storage, things of that nature. They tend to, these disruptive technologies tend to grow in an O-Give curve or an S-Curve. So what you see is sort of this momentum building where the market is being seeded. Gartner has RPA now in the trough of disillusionment. So you're seeing sort of this, okay, the little engine that could. And then what you see is this steep part of the S-Curve growing. And then after it explodes and hits escape velocity, it sort of stretches out into maturity. And I think that's what you're going to see with RPA. But some things have to happen before that happens. And one is specifically the RPA has to move from the back office to the front office. It has to move from only really dealing with pretty simple mundane tasks to more complicated automations. It's got to be able to deal with unstructured data. It's got to be able to handle unattended or rather attended bots where you're injecting humans into the equation and you're actually using machine learning and artificial intelligence to learn and then identify other areas of automation and actually have systems of agency that can act. In other words, a bot will call another bot that actually can complete a transaction. And so you're going to see a lot of money spent here. This is a big chasm I think that RPA has to cross. We're going to talk to Daniel Danez about this. He's a big thinker. He's a go big or go home guy. And so I think those things, I would predict those things actually are going to happen because you're going to see so much effort and money and emphasis put into AI and for competitive advantage that I actually think that RPA can lead that. And then again, come back to the consolidation. I think you will see some consolidation. I think you're seeing UI path try to take the lead. Automation anywhere is kind of pressing the lead, if you will. Both companies have raised a couple billion dollars if you combine them. And I think the way this market shakes out is, and you're going to have some of the big whales come in like SAP. I think the way this happened is you're going to see one or two specialists emerge. I think UI path is on its way there. Automation anywhere as well. And the number one player is going to make a lot of money. The number two player is going to do okay. The number three player is going to struggle and everybody else is going to be either break even or they're going to bundle it in like SAP as part of their overall portfolio and compete on that basis. So I would predict that UI path will maintain its lead. I think it's got the culture to do that. I think automation anywhere, also a good company is going to keep pressing that lead. And those are two companies that you need to watch. I'm interested to see Blue Prism. I think they are somewhat undercapitalized. They went to the public markets. The spending data actually shows all three of these companies as well as some of the legacy companies like Pegasystems actually gaining sort of more share relative to other initiatives. So I think even some of these legacy companies are going to continue to chug along and actually do pretty well in the business. But the real darling, you know, I think is going to be UI path. All the bankers are hovering around earlier on this week trying to get their business. They know there's an IPO coming at some point. Again, we'll ask Daniel Dinez about that. So there you have it. That's my intro. Some of my predictions, some of Guy Kirkwood's predictions. Wall to Wall coverage on theCUBE today. Day two at UI path, forward three from Las Vegas. We'll be right back right after this short break.