 From the SiliconANGLE Media Office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Dave Vellante. Hi everybody, welcome to the special edition of theCUBE Insights powered by ETR. Over the past several weeks, we've been running breaking analysis on various market segments, and today we're going to talk about the robotic process automation market. The spending data from ETR really shows that that market is poised for continued growth, it's been rocketing. These segments are independent editorial, they are not sponsored in any way, although two of the companies that I'll be talking about today are sponsors of theCUBE Automation Anywhere and UiPath, both sponsor theCUBE, we attend their shows, but they have absolutely no input over these editorial segments. It's 100% data-driven based on ETR data and CUBE Insight opinions, in my opinions. So thank you for watching, let's get into it. So, Alex, if you bring up the first slide, I want to share with people what the robotic process automation market is and what you need to know about it. It's a small but very fast growing market, according to a combination of Forrester and Gartner data, it's around one and a half to $1.7 billion this year, and it's growing at over 60% per year. Gartner calls it the fastest growing software sub-segment that they track. Gartner just put out a magic quadrant on this space, which is always interesting reading, despite what you think about magic quadrants. It's essentially software robots that are automating repetitive mundane tasks, and I underline tasks in this chart because it's largely tasks, simple tasks, that are being automated in a big way, as opposed to really big complex processes. They tend to be targeted at a line of business users, and they're very popular in environments like finance and service roles and back office areas where there are repetitive common tasks that people frankly hate, and we're going to give you some feedback from customers. There are a number of upstarts in this space, UiPath, Automation Anywhere, Blue Prism, these companies have attracted massive influx of venture capital, particularly UiPath and Automation Anywhere, over a billion and a half dollars in the last couple of years, they have monster evaluations take those three companies, their valuations are up over $10 billion and growing. UiPath, for example, several months ago announced that it had more than $200 million in annual recurring revenue. They were just at $8 million two years ago. So you're seeing just this massive growth, a lot of influx of capital and a lot of jockeying for position. Now users that we've talked to will express a great deal of business impact related to the introduction and application of RPA in their business. So I want you to take a look at this video of one practitioner that we interviewed at a CUBE event. Let's listen to see what Jean Younger has to say and then we'll come back and talk about it. It's interesting because I also teach the six Sigma courses there. And one of the slides I've had for years teaching that class is most business processes are like between 3.2 and 3.6, 3.8 Sigma, which is like 95 to 98% accurate. And I said that's all the better we can usually do because of the expense that it would normally be to get us to a six Sigma. You look at the places that have six Sigma, it's life-threatening, airline, airplane engines. You hope there are at least seven Sigma. Those type of things, but business processes, three, five, three, two. But now I get to change that because with RPA I can make them six Sigma very cheap, very cheaply because I can pull them in, I got my bot, it comes over, pulls the information and there's no double keying, there's no miskeys, it's accuracy, 100% accuracy. So this is a perfect example of how companies are applying robotic process automation to improve existing business processes. You would never try to get a standard business process up to six Sigma, it's just not worth it. And as Jean Younger explained, now she can get there very inexpensively with RPA. There are many, many other use cases, but I wanted to share that one with you. Now the next slide I'm going to show you comes from ETR. ETR is an organization that runs a panel, it's about a 4,500 user panel and they focus on spending intentions, they do periodic surveys throughout the year, they capture a fairly large number of users and what they're spending on, they've built this great taxonomy and we've been partnering with ETR to share with you some of that insight. So what this slide shows is really spending intentions from the July 2019 survey, asking about the second half spending intentions on the sector of robotic process automation. You can see here the end is 1068 respondents in that July survey, on the left hand side you can see four vendors that we've chose to profile, UiPath, Automation Anywhere, Blue Prism and Pegasystems, a company that's been around for a long time and is not exclusively focused on RPA, they've got more of a business process focus and I'll come back to that. But what this slide shows is really the spending intentions around four areas. The bright red is we're going to leave the platform, stop spending, we're out of here. The lighter red is we're going to spend less in the second half. The gray is we're flat. The dark green is we're going to increase spending and the lime green is we're a new customer coming on. So if you subtract the red from the green you get what ETR calls the net score and that is an indication of spending, intentions and momentum. So the higher the net score the better. You can see here UiPath leads the pack with an 81% net score. Ironically, that's the identical net score as was Snowflake in this survey. We profiled the enterprise data warehouse market and Snowflake was one of the leaders there. So UiPath and Snowflake, even though they're sort of different markets and different levels of maturity sort of around the same net score. So two very hot companies. And you can see going down the list, automation anywhere is 69%, blue prism 53% and PEGA systems 44%. Actually these are all very strong compared to some of the other market segments we track. Like for instance, if you look at the Discarray market and some of the legacy Discarray companies, some of the enterprise data warehouse companies you'll see sometimes negative scores. Now on the right hand side in the black you see shared accounts. What this says, this is the number of accounts that were mentioned as intending to spend on or in the case of the dark red leaf or in the case of the bright green ad. But the number of accounts out of that 1068 corpus of data that mentioned these respective companies. So you can see relatively small, you know 68 for UiPath, 42 for automation anywhere, 45 for blue prism and only 27 for PEGA systems. But these I remind you are still significantly, statistically significant enough to at least get indications. So you can see again, UiPath leads but all of the companies are actually quite strong on a relative basis. So the next slide that I want to show you Alex, if you bring this up is a time series for some of these leading competitors over time. So we'll go back to January of 18 and the number of shared accounts back then was relatively small. It was in the low double digits and in some cases a single digits. But as we go to the right, you can start to see it. It increases in terms of the shared accounts out of that 1068 from this past survey. So you can see UiPath at that 81% net score very high but also automation anywhere, very, very strong. Blue prism, you can see the decline in that yellow line. But again, very, very strong with a 53% net score. So this space is new and it's very hot. I say it's new and it's been around for a while but it's really starting to take off. And then you can see PEGA systems lower than these other companies but still very, very strong at 44%. Now I'll tell you the folks at Wikibon, the analyst side of our house have gone out. They've done some research. Maybe it was about 18 months ago. They downloaded UiPath's community edition. They tried to do the same for automation anywhere in blue prism. They tried to get access to the software so they could apply it and run some robots against some mundane tasks. They were only able to get the automation of the, sorry, the UiPath software which was very simple to install and apply and some simple tasks. They couldn't get the automation anywhere in blue prism. They had to go to resellers and it was sort of this complicated setup. So that was sort of a red flag that we put up. But the UiPaths claims that their stuff is easy to use. Some of their users that we've talked to talk about it in the context of low code. And so we've clarified some of that. We don't have as much data on automation anywhere in blue prism although we've covered automation anywhere as events. Customers seem quite happy and reporting strong business impacts, don't have as much information at this time on blue prism. We have attended some of the PEGA systems events just as observers. I was saying before I come back to them, they take more of a holistic approach to business process. It's really not, they're not positioning themselves as a standalone RPA vendor which frankly I wouldn't do if I were up against UiPath and automation anywhere because they've got so much influx of capital. They've got modern platforms that are ostensibly easier to use. So PEGA system seems to be look going after RPA in a much sort of broader context around process, business process engineering. So in summary, I just want to say, it's a very fast growing market but there's a lot of competition. You got UiPath, automation anywhere, blue prism. There's about 15 or 20 players in this space that are sort of sizable. It's a combination of as I say standalone robotic process automation players with integrated BPM players like PEGA systems. It's important to remember, you're largely here automating existing procedures and tasks. You're not doing a lot of necessarily re-engineering. And so that's, some people are concerned about that saying, okay, we're kind of paving the cart path. At the same time, practitioners are reporting that it's having a major business impact. And although they've also said that's not likely to reduce headcount, rather we're redirecting resources. You're not firing people because you're bringing in robots. So people aren't necessarily losing their jobs over this. They're just shifting away from that sort of undifferentiated heavy lifting that they hate doing, mundane tasks, automating that and moving on to more strategic items. So a lot of discussion in the industry about artificial intelligence and machine learning. And some folks have said, well, AI and RPA, they have nothing to do with each other. I would say this that machine learning has been injected into the RPA space via computer vision. And a good example is to recognize a button like a send button. If you're sending out emails or pushing a certain button every day, you can automate that process. So computer vision is a key part of this. And again, it's something that certain RPA vendors are touting. I know UiPath again talks about that a lot. But the business impact is tangible. And this is based on customer feedback. A lot of customer feedback, generally speaking, you're seeing CFOs are hopping onto this. They're seeing this as a really good way to take out some of the inefficiencies in their business, refocus people on higher value activities. And so we're going to continue to watch this RPA space. I think it's going to be big. We see big SIs coming into this. We're talking about companies like Accenture, IBM, Deloitte, PWC, Ernie Young. Those guys are starting to go after the space. And I've always said this about the big SIs. They love to eat at the trough. So if there's money there, they find it and they go hard after it. So thanks for watching everybody. We're going to continue to report on this space. This is Dave Vellante with Cube Insights powered by ETR. We'll see you next time.