>>The Cube presents UI Path Forward five, brought to you by UI Path. >>Hi everybody. Welcome to Las Vegas. We're here in the Venetian, formerly the Sans Convention Center covering UI Path Forward five. This is the fourth time the Cube has covered forward, not counting the years during Covid, but UiPath was one of the first companies last year to bring back physical events. We did it at the Bellagio last year, Lisa Martin and myself. Today, my co-host is David Nicholson, coming off of last week's awesome CrowdStrike show back here in Vegas. David talking about UI path. UI path is a company that had a very strange path, as I wrote one time to IPO this company that was founded in 2005 and was basically a development shop. And then they realized they got lightning in a bottle with this RPA thing. Yeah. And Daniel Deez, the founder of the company, just really drove it hard and they really didn't do any big kind of VC raise for several years. >>And then all of a sudden, boom, the rocket ship took off, kind of really got out over their skis a little bit, but then got to IPO and, and has had a very successful sort of penetration into the market. The IPO obviously has not gone as well. We can talk about that, but, but they've hit a billion dollars in arr. There aren't a lot of companies that, you know, have hit a billion dollars in ARR that quickly. These guys had massive valuations that were cut back, obviously with the, with the downturn, but also some execution misuses. But the one thing about UiPath, Dave, is they've been very successful at penetrating customers. And that's the thing you always get at forward customer stories. And the other thing I'll, I'll, I'll add is that it started out with the narrative was, oh, automation software, robots, they're gonna take away jobs. The opposite has happened, the zero unemployment. Now basically we're heading into a recession, we're actually probably in a recession. And so how do you combat a recession? You put automation to work and gain if, if, if, if inflation is five to 7% and you can get 20% from automation. Well, it's a good roi. But you sat in the keynotes, it was really your first exposure to the company. What were your thoughts? >>Yeah, I think the whole subject is interesting. I think if you've been involved in tech for a while, the first thing you think of is, well, hold on a second. Isn't this just high tech scripting? Aren't you essentially just automating stuff? How, how cool can that possibly be? >>Well, it kinda was in the >>Beginning. Yeah, yeah. But, but, but when you dig into it, to your, to your point about the concern about displacing human beings, the first things that can automate it are the mundane and the repetitive tasks, which then frees individuals up frontline individuals who are doing those tasks to do more strategic things for the business. So when you, when we, you know, one of the things that was talked about in the keynote was this idea of an army of citizen developers within an organization. Not, you know, not just folks who are innovating and automating at the core of enterprise applications, but also folks out on the front line automating the tasks that are interfering with their productivity. So it seems like it's a win-win for, for everybody throughout the enterprise. >>Yeah. So let's take a, let's take folks through the, the keynote to, basically we learned there are 3,500 people here, roughly, you know, we're in the Venetian and we do a lot of shows at, at the Venetian, formerly the San Convention Center. The one thing about UiPath, they, they are a cool company. Yeah, they are orange colors, kinda like pure storage, but they got the robots moving around. The setup is very nice, it's very welcoming and very cool, but 300 3500 attendees, including partners and UiPath employees, 250 sessions. They've got a CIO, automation council and a pickleball court inside this hall, which pickleball is, you know, all the rage. So Bobby, Patrick and Mary Telo kicked it off. Bobby's the cmo, Mary's the head of branding, and Bobby raised four themes. It it, this is a tool that it's, this is RPA is going from a tool to a way of operating and innovating. >>The second thing is, the big news here is the UI path business platform, something like that. They're calling, but they're talking about about platform and they're really super gluing that to digital transformation. The third is really outcomes shifting from tactical. I have a robot, a software robot on my desk doing, you know, mimicking what I do with the script to something that's transformative. We're seeing this operationalized very deeply. We'll go into some examples. And then the fourth theme is automation is being featured as a strategic line item in annual reports. Bobby Patrick, as he left the stage, I think he was commenting on my piece where I said that RPA automation is more discretionary than some other things. He said, this is not discretionary, it's strategic. You know, unfortunately when you're heading into a recession, you can, you can put off some of the more strategic items. However, the flip side of that, Dave, is as they were saying before, if you're gonna, if if you're, if you're looking at five to 7% inflation may be a way to attack that is with automation. Yeah. >>There's no question, there's no question that automation is a way to attack that. There's no question that automation is critical moving forward. There's no question that we have moved. We're in the, you know, we're, we're still in the age of cloud, but automation is gonna be absolutely critical. The question is, what will UI path's role be in that market? And, and, and when you hear, when you hear UI path talk about platform versus tool sets and things like that, that's a critical differentiator because if they are just a tool, then why wouldn't someone exploit a tool that is within an application environment instead of exploiting a platform? So what I'm gonna be looking for in terms of the, the folks we talked to over the next few days is this question of, you know, make the case that this is actually a platform that extends across all kinds of application environments. If they can't seize that high ground moving forward, it's it's gonna be, it's gonna be tough for them. >>Well, they're betting the company on >>That, that's Rob Ensslin coming in. That's why he's part of the, the equation. But >>That platform play is they are betting the company. And, and the reason is, so the, the, the history here is in the early days of this sort of RPA craze, Automation Anywhere and UI path went out, they both raised a ton of money. UI Path rocketed out to the lead. They had a much e easier to install, you know, Automation Anywhere, Blue Prism, some of the other legacy business process folks, you know, kind of had on-prem, Big Stacks, UiPath came in a really simple self-serve platform and took off and really got a foothold in the market. And then started building or or making some of these acquisitions like Process Gold, like cloud elements, which is API automation. More recently Reiner, We, which is natural language processing. We heard them up on the stage today and they've been putting that together to do not just rpa but process mining, task mining, you know, document automation, et cetera. >>And so Rob Ins insulin was brought in from Google, formerly Google and SAP, to really provide that sort of financial and go to market expertise as well as Shim Gupta who's, who's the cfo. So they, they, and they were kinda late with that. They sort of did all this post ipo. I wish they had done it, you know, somewhat beforehand, but they're sort of bringing in that adult supervision supervision that's necessary. Rob Sland, I thought was very cogent. He was assertive on stage, he was really clear, he was energetic. He talked about the phases, e r p, Internet cloud and the now automation is a new S-curve. He quoted a Forester analyst talking about that. He also had a great quote. He said, you know, the old adage better, faster, cheaper, pick two. He said, You don't have to do that anymore with automation. He cited reports from analysts, 50% efficiency improvement, 40% productivity improvement, 40% improvement in customer satisfaction. >>And then what I always, again, love about UiPath is they're no shortage of customers. They do as good a job as anybody, and I think I would say the best of, of, of getting customers to talk about their experiences. You'll see that on the cube all this week, talked about Changi airport from Singapore. They're adding 50 able to service 50 million new customers, new travelers with no new headcount company called Vital or retail. And how you say that a hundred thousand employees having access to it. Uber, 150% ROI in one year. New York state getting 1.2 million relief checks out in two weeks and identifying potentially 12 billion in fraud. They also talk about 25% of the, of the UI path finance team is digital. And they've, they've only incremented headcount, you know, very slightly one and a half times their revenue's grown. What a 10 x? And really he talked about how to, for how to turn automation into a force multiplier for growth. And to your point, I think that's their challenge. What were your thoughts on Rob ens insulin's keynote? >>First of all, in addition to his background, Rob brings a brand with him. Rob Ensslin is a brand, and that brand is enterprise overarching platform. Someone you go to for that platform play, not for a tool set. And again, I'll, I'll say it again. It's critically important that they, that they demonstrate this to the marketplace, that they are a platform worth embracing as opposed to simply a tool set. Because the large enterprise software providers are going to provide their own tool sets within their platforms. And if you can't convince someone that it's worth doing two things instead of one thing, you're, you're, you're never gonna make it. So I've had experiences with Rob when he was at Google. He's, he's, he's the right person for the job and I, and I I I buy into his strategy and narrative about where we are and the critical nature of automation question remains, will you I path to be able to benefit from that trend. >>So a couple things on that. So your point about sap, you know, is right on EY was up on stage. They, EY is a huge SAP customer and they chose UI path to automate their SAP installation, right? And they're going all in with UI path as a partner. Of course. I I often like to say that the global system integrators, they like to eat at the trough, right? When you see GSIs like EY and others coming into the ecosystem, that means there's business being done. We saw Orange up on stage, which was really interesting. >>Javier from Spain. Yeah. Yep. >>Talking about he had this really cool dashboard and then Ted Coomer was talking about the business automation platform and all the different chapters and the evolution. They've gotta get to a platform play because the thing I failed to mention is Microsoft a couple years ago made a tuck in acquisition and got it to this market really providing individual automations and making it, you know, it's Microsoft, they're gonna make it really easy to add it really >>Cheaply. SAP would tell you that they have the same thing and, >>And then, and then just grow from that. So UiPath has to pivot to a platform play. They started this back in 2019, but as you know, it takes a long time to integrate stuff. Okay. So they're, they're, they're working through that. But this is, you know, Rob ends and put up on the, the slide go big, I, I tweeted, took a page outta Michael Dell. Go big or go home. Final thoughts before we break? >>I think go big or go home is pretty much sums it up. I mean this is, this is an existential mission that UiPath is on right now, starting to stay forward. They need to seize that high ground of platform versus tool set. Otherwise they will never get beyond where they are now. I I I, I do wanna mention too, to folks in the audience, there's a huge difference between a billion dollar valuation and a billion dollars in revenue every year. So, so, you know, these, these guys have reached a milestone, there's no question about that. But to get to that next level platform, platform, platform, and I know we'll be, we'll be probing our guests on that question over the next couple years. >>Yeah. And the key is obviously gonna be keep servicing the customers, you know, all the financial machinations and you know, they reduced yesterday their guidance from the high end being 25% ARR growth down to roughly 20% when you, when you factor out currency conversions. UiPath has a lot of business overseas. They're taking that overseas revenue and converting it back to dollars though dollars are appreciated. So they're less of them. I know this is kind of the inside baseball, but, but we're gonna get into that over the next two days. Dave Ante and Dave, you're watching the Cubes coverage of UI path forward, five from Las Vegas. We'll be right back, right after this short break.

The Cube presents UI Path Forward five. Brought to you by UI Path. >>Hi, everybody went back live at the Venetian, formerly the Sands Convention Center. Dave Ante with David Nicholson. UI. Paths forward five. This is the fourth forward conference that the Cube has done. So we've seen the ascendancy of UI path, the growth customers. UiPath is one of the first companies to actually come back Post Covid. Last year, 2021 at the Bellagio. They took a chance and it actually worked out great at a couple thousand people there. Lots of customers. We're here with Lauren Joyce, who's the global automation lead at Whirlpool. She's joined by Regener Facade rp, who is the global automation lead at Accenture. Good to see you again. Lauren. Welcome to the Cube first timer. Very much, >>Yes, thank >>You. So you're relatively new to automation, but you, as we were talking, you're a process with talk about the center of excellence that you're building out. What's the importance of that to Whirlpool? >>Absolutely. So we are first looking at automation from our finance organization and they were coming to us with, Hey, here are 12 things we wanna automate. And really what we are finding is that not all of these things were suitable for automation. So we've started on the COE journey of, well, how do we make sure that we're getting the most ROI for our business? Starting with discovery, making sure that what we're automating it makes sense, it's the right process versus just an upgrade or, or retooling set. So for us, especially being a global company, making sure that we had that governance in place, that mindset and what should be automated and when really made sense and helped us on our journey pursuing. >>And, and, and I presume that's where Accenture comes in. I mean, rp, you got deep industry expertise, you've got automation expertise. What role do you play in that prioritization exercise? >>So the, the way we approach any automation implementation is similar to what we did here in our pool. First step is, you know, I call it as knowing where you are in the automation journey. Like what always is, if you don't know where you are on a map, a map won't help you. So baselining the current automation maturity and the current journey where they are. And once you do that, you identify you are not star and prioritization and the goals that are required and then you build a plan. And exactly how we approach in establishing a center of excellence that drives the automation with rigor, knowing where you are and where you want to get to, >>What's the team look like in a, in a, who's on the bus, You know, who's who's, who's in in the circle if you will. How do you com you know, build, you've written about this, it's like a sports team. You put it together, you need be a quarterback, you need a lineman, you need, you know, wide receivers who's on the center of excellence team. >>So the way you always build the center of excellence is making sure that your business partners and the senior leadership team is committed to the entire automation journey. That's the key ingredient for success. Then you build, one of the critical aspect is the talent, the quarterback, you said the talent. In today's world, automation talent is just not about knowing, you know, RPA techniques or you know, process optimization, but it is an end to end technology stack starting from cloud to data to analytics and entire platform capabilities of automation that combined and coupled with change management and how do you drive an enterprise chain management is very, very critical in terms of implementing automation. >>Absolutely. Lauren, I'm curious, did, did Accenture bring UI path to Whirlpool or did you bring, or did you bring Accenture in and UI path in together? How, how did that interaction? >>Yes. So we brought Accenture in and they really helped us along with that journey and they brought UI path to us. Our European business was actually using Blue Prism and that's when we said no, we wanna standardize specifically on UI path and make sure from a global standpoint we're using the same tooling. And that really helped that as we were building our team, we leaned on their expertise and then even we're retooling people within our corporation of, hey, we took our SAP lead, our GCP lead to be our technical architect and and people that could help speak the language and translate from process and explain that doesn't have to be a large project and explain what automation is to help drive return investment for sure. >>Now you're early in, but have you seen results, you know so far? Can you talk about that, quantify it in any way or? >>Absolutely. So we started our journey December of 2020. We've automated about 60 or so bots, but really everything that we've done is based on hours saved. So we're at about 60,000 hours automated and with some of our biggest, like our big box stores and our KitchenAid small appliances, we've even had hard dollar savings that we had a bot that went live about in 60 days. We had a $3 million return and take took out 3000 hours of human interaction. That was great for us. >>So the world's kind of a mess right now. You got supply chain issues, you got inflation, you got a recession, you got the United States. Anyway, you got the Fed trying to figure out, oh there's sling shoting, you know, some people are, you know, really hurting stock market is starting to show that there's a lot of confusion out there. The world is changed quite a bit obviously the last few years. How do you guys see it? What role has, I wonder if both of you could answer, what role has automation played in helping like, for instance, Whirlpool with maybe supply chain problems or maybe bigger forecasting and, and what are you seeing across organizations? But Lauren if you could start. >>Absolutely. So for us being able to show improvement in a six to eight week development cycle and instead of saying here's a heavy dollar investment or a new tooling that you gotta get people resources up to speed on, we can take where we are today, automate save hours where we're getting our employee engagement scores of I'm overworked, I have too much on my plate, how can you help me? And automation is there to support and that's really helped our business one take unnecessary work off their plate and show very quick value add to the business without having to have huge dollar investments in our, I'm you trying to save money. >>Are people, what are you seeing in terms of, so some of the problems that people I see as sign out here said, oh, in inflation at five to 7% go after productivity and make it in 20% gains. I mean, what are you seeing in the field? >>More than ever, More than ever, automation is more relevant now given the current economy environment that we are operating. Because automation always free up or optimizers the capacity that every enterprise has. Optimizing capacity is very important so that you can take your talented employees and the talented resources to do more strategic transformation program, which helps to sustain and stay and scale in your business. So I see that automation playing a significant role to impact business imperative. >>What are some of the common misconceptions? I mean we talk a lot about people's fear of automation. You know, I don't think that's necessarily a misconception. I think a lot of times people are fearful about automating though. Maybe they, they shouldn't be. We had Dentsu on today, DS like, you know, this giant global branding firm and they get a lot of young kids, they're like, No, bring it on. I don't want to do all this mundane stuff. But you know, a lot of folks are are are concerned, but, so that maybe is one misconception. Are there others, Lauren, that you found that you can share? >>I think we were lucky that we didn't necessarily have that fear of being replaced by automation. I think our change management plan really helped drive that. We included some fun things of any time a bot went live you got almost like a birth certificate of here's the process we save for you, here's how it's grown over six, six months, 12 months, 18 months. But I'm not sure if we had any other major gaps like that or or pitfalls >>Or, or p anything that, >>So my philosophy is automation is human plus machine combination. You can't run just, you know, people can't think that, you know, if my task get automated, I lose the, I lose my my jobs. That's not how it works because you, you do need human expertise, competency skills to kind of argument what you do with automation. And most important thing when you do this change is that most of the enterprises do not believe, do not understand that you have to get even process, right? You don't want to, you know, have an inefficient process and put automation on the top of it. Then you just made your inefficiency run more faster. So you need to kind of make sure that you address inefficiency, optimize your process, then infuse automation, then have human plus machine capability to strengthen your automation. >>Is it really that easy? Sounds easy, right? It, >>So from an, from an Accenture perspective, if you're, if you're looking at the market as a whole or looking at industry verticals, what's the difference between an organization that is leveraging automation and an organization that is not leveraging organ leveraging automation? Is there, is there sort of a range of percentage of efficiency that you can put on that? What does it mean for their bottom line? >>Essent, you must have data on this. Yeah, I mean what, >>Yeah, >>Today, today's world in the technology world, every organization understands the importance of automation that's given. That's a table stake. Now, where an organization is in the journey differs some of the enterprises maybe at the beginning of the maturity spectrum. In my book I talk about automation maturity framework wherein there are the initial stages of automation. Some of them are intelligent automation at the end of the spectrum where they're using data cloud and AI to drive the automation journey. But in every enterprise, the key success of automation depends upon whether you do automation and enterprisewide not in a silo in the organization, but if you do enterprise wide apply across, you get a lot more benefits, lot more efficiency to drive. >>Does does automation being more strategic or key? Does it, does it in a way make investments in automation more, more scrutinized or more circumspect? I, I would, I would use the term discretionary. We heard Bobby Patrick today say this is not discretionary, it's strategic to me. If it's strategic it might be a mandate but it's might be something I can kick down the road. What are you seeing there in the field just in terms of overall demand and sentiment? >>Automation today, as I said, is a table stake. When it becomes an integrated DNA of enterprise, it is always, you know, whether you want to call one pillar of strategy, key DNA of your strategic roadmap you are in investments have to be directly proportional to what you want to accomplish as your business KPIs to thrive and deliver your business with. Otherwise, if you do it as like a one off thing, you know you won't get the benefit. Yeah. >>Or from your standpoint, where do you want to take the automation initiative inside a whirlpool? How are you thinking about scaling it? What have you learned that you can apply to driving scale? >>So we put some strict governance in place who weren't just automating everything under the sun cuz >>Wild west >>Yeah, I can't support that. Right? So we made sure that everything had at least less than a one year invest return on investment and 500 hours worth of automation for us to even consider it as part of our coe. So because of that, we do have some automations that would make sense, but that's why we're looking at a citizen development program or low code, no code. What other types of options are there to make sure that it does become a part of our culture and dna that you can automate those even small parts of your workflow to, to make your day better. >>When, when you're looking at those workflows, do you, are you, are you literally looking over someone's shoulder with a stopwatch and measuring, Measuring how time >>And motion studies? No >>Question. Yeah. I mean is it time and motion studies? I mean, is that sort of the entry level data that that you use or is it more, or is it more automated than that? >>I would say it's a little more automated than that, but we do sit down and we ask our business process, show me what this process looks like to you. And then from that we can take some task mining and look at, okay, how long did it take you to do this? How often are you doing it? And then based on how long the automation would take, see how many hours are saved and how many people are doing that same task on a monthly, daily, weekly basis. >>Great. All right guys, thanks so much for coming in the cube and sharing your story. A whirlpool and always love to have Accenture on. You guys got such a massive observation space, global depth of industry. So thank you very much both. Thank you. Thank you. You're very welcome. All right, keep it right there. Dave Nicholson and Dave Ante will be back right to the short break, you watching the cubes coverage of UI path forward. Five live from Las Vegas.

>>The Cube presents UI Path Forward five. Brought to you by UI Path. >>Hi everybody. We're back at UI path forward to five. This is Dave Ante with Dave Nicholson. Derek Mu is here. He's automation product line lead for Merck. Thank you, by the way, for, you know, all you guys do, and thank you Dave for having in the, in the, in the vaccine area, saving our butts. And Bill Engel is back on the cube. He's the director at cgi. Guys, good to see you again. >>Good to see you. Thank >>You. So Merrick, Wow, it's been quite a few years for you guys. Take us through Derek, what's happening in sort of your world that's informing your automation strategy? >>Well, Dave, I mean as you know, we just came out of the pandemic. We actually have quite a few products like Gabriel Antiviral Pill. Obviously we worked, you know, continue to drive our products through a difficult time. But, you know, is during these can last few years that, you know, we've accelerated our journey in automation. We're about four years plus in our journey, you know, so just like the theme of this conference we're we're trying to move towards, you know, bigger automations, transformational change, continue to drive digital transformation in our company. >>Now Bill, you've been on before, but CGI tell people about the firm. It's not computer graphics imaging. >>Sure. No, it's, it's definitely not. So cgi, we're a global consultancy about 90,000 folks across the world. We're a, we're both a product company and a services company. So we have a lot of different, you know, software products that we deliver to our clients, such as CGI Advantage, which is a state local government EER P platform. And so outside of that, we, my team does automation and so we wrap automation around R IP and deliver that to our clients. >>So you guys are automation pros, implementation partners, right? So, so let's go back. Yep. Derek said four years I think. Yep. Right, You're in. So take us through what was the catalyst, how did you get started? Obviously it was pre pandemic, so it's interesting, a lot of companies pre pandemic gave lip service to digital transformation. Sounds like you guys already started your journey, but I'll come back to that. But take us back to the Catalyst four years ago. Why automation? We'll get into why UI path, >>Right. So I, I would say it started pretty niche in our company. Started first in our finance area. Of course, you know, we were looking in technology evaluating different companies, Blue Prism, ui P. Ultimately we chose UI p did it on-prem to start to use automation in sort of our invoice processing, sort of our financial processes, right? And then from there, after it was really when the pandemic hit, that's when sort of we all went to remote work. That's when the team, the COE continued to scale up, especially during pandemic. We were trying to automate more and more processes given the fact that more and more of our workers are remote, they reprocesses. How, how do you do events? You know, part of our livelihood is, is meeting with engaging with customers. Customers in this case is, are doctors and physicians, right? How do you engage with them digitally? How do you, you know, you know, a lot of the face to face contact now have to kind of shift to more digital, digital way. And so automation was a way to kind of help accelerate that, help facilitate that. >>You, you, I think you mentioned COE as in center of excellence. Yep. So, so describe your approach to implementing automation. It's, that sounds like when you say center, it sounds like something is centralized as, as opposed to a bunch of what we've been hearing a lot about citizen developers. What does that interaction >>Look like? We do have both. I would say in the beginning was more decentralized, but over time we, over the few years as, as we built more and more bots, we're now at maybe somewhere between four to 500 bots. We now have sort of internal to the company functional verticals, right? So there's an animal health, we have an animal health function. So there's, there's a team building engaging with the animal health business to build animal health box. There's human health, which is what I work on as well as hr, finance, manufacturing, research. And so internally there's engagement leads, one of the engagement leads that interact with the business. Then when there's an engineering squads that help build and design, develop and support and maintain those as well as sort of a DevOps team that supports the platform and maintains all the bot infrastructure. >>So you started in finance common story, right? I'm sure you hear this a lot Belt, How did you decide what to target? Was it, was it process driven decision? Was it, was it data oriented? Like some kind of combination? How did you decide, Do you remember? Or do you, could you take >>Us back to Oh yeah. So for, for cgi how we started to engage with MER is, you know, we, we do a lot of other business with Merck. We work on all their different business lines and we, we understand the business process. So we, we knew where there was potential for automation. So we brought those ideas to Merck and, and really kind of landed there and helped them realize the value from automation from that standpoint. And then from there the journey just continued to expand, you know, looking for those use cases that, that, you know, fit the mold for, for, for RPA to start. And now the evolution is to go to broader hyper automation. >>And, and was it CFO led into the finance department and then, or was it sort of more bottoms >>Up? Yeah, so, so I think it started in, in finance and, and, but we actually really started out in the business line. So out in regulatory clinical, that's, that's where we, we have the life science expertise that are embedded. And so I partnered with them to come up with, hey, here's a real solution we could do to help streamline, say submission archiving. So when, when submissions come back from the fda, they need to be archived into, you know, the, their system of record. So that's, those are the types of use cases that, that we helped automate. >>Okay. Cause you're saying a human had to sort physically archive that and you were able to sort of replicate that. Okay. And you started with software robots, obviously rpa and now you're expanding into, we we're hearing from UI this the platform message. How does that coincide Derek, with what you guys are doing? Are you sort of adding platform? What aspects of the platform are, are you adding? >>Yeah, no, I mean we are, we are on-premise, right? So we have the platform, but some of the cool things we just had, another colleague of mine presented earlier today. Some of the cool things we're, we're doing ephemeral infrastructure. So infrastructure as code, which essentially means instead of having all these dedicated bot machines, that that, you know, cuz these bots only in some cases run 10 minutes and they're done. So we're, we're soon of doing all on demand, you know, start up a server, run the bot when it's finished, you know, kill the server. So we only pay for the servers that we use, which allows us to save a whole >>Lot of money. Serverless bots. So you, but you're doing that OnPrem, so you >>No, >>No, but >>That's >>Cloud. We, >>We, we we're doing it OnPrem, but our, our bot machines that actually run the, let's say SAP process, right? We spin that machine up, it's on the cloud, it runs it finish, Let's say it's processed in one hour and then when it's done, we kill that machine. So we only play for that one hour usage of that bot machine. >>Okay. So you mentioned SAP earlier you mentioned Blue Prism when you probably looked at other competitors too. You pull the Gartner Magic quadrant, blah, blah, you know, with the way people, you know, evaluate technology, but SAP's got a product. Why UI path mean? Is it that a company like SAP two narrow for their only sap you wanted to apply it other ways? Maybe they weren't even in the business that back then four years ago they probably weren't. Right? But I'm curious as to how the decision was made for UiPath. >>Well, I think you hit it right on the nail. You know, SAP sort of came on a little later and they're specific to sort of their function, right? So UiPath for us is the most flexible tool can interact by UI to our sales and marketing systems, to, to workday, to service Now. It's, it cuts across every function that we have in the company as well as you're the most mature. I mean, you're the market leader, right? So Right. Definitely you, you continue to build upon those capabilities and we are exploring the new capabilities, especially being announced today. >>And what do you see Bill in the marketplace? Are you, are you kind of automation tool agnostic? Are you more sort of all in on? I >>Would say we are, we are agnostic as a company, but obviously as part of a, as an automation practice lead, you know, I want to deliver solutions to my clients that are gonna benefit them as a whole. So looking at UI path, you know, that this platform is, it covers the end to end spectrum of, of automation. So I can go really into any use case and be able to provide a solution that, that delivers value. And so that's, that's where I see the value in UI path and that's why CGI is, is a customer as well. We automate our internal processes. We actually have, we just launched probably SALT in the, in the market last week, expanded partnership with UiPath. We launched CGI, Excel 360. That's our fully managed service around automation. We host our clients whole UI path infrastructure and bots. It's completely hands off to them and they just get the value outta >>Automation. Nice, nice. Love >>It. Derek, you mentioned, you mentioned this ephemeral infrastructure. Yeah. Sounds like it's also ethereal possibility possibly you're saying, you, you're saying you have processes that are running on premises, right? But then you reach out to have an automation process run that's happening off pre and you're, and you're sort of, >>It's on the cloud, so, so yeah, so we have a in-house orchestrator, so we don't, we're not using your sort of on the cloud orchestrator. So, so we brought it in-house for security reasons. Okay. But we use, you know, so inside the vpn, you know, we have these cloud machines that run these automations. So, so that's, that's the ephemeral side of the, of the >>Infrastructure. But is there a financial angle to that in terms of when you're spinning these things up, are you, is it a, is it a pay by the drink or by the, by the CPU >>Hours, if you can imagine like we, you know, like I mentioned where somewhere between four to 500 bots and every bot has a time slot to run and takes a certain amount of time. And so that's hundreds and hundreds of bot machines that we in the old days have to have to buy and procure and, you know, staff and support and maintain. So in this new model, and we're just beginning to kind of move from pilot into implementation, we're moving all, all of bots this in ephemeral infrastructure, right? So these, okay, these machines, these bot machines are, you know, spun up. They run the, they, they run their automation and then they spin >>Down. But just to be clear, they're being spun up on physical infrastructure that is in your >>Purview and they spun up on aws. Yeah. Okay. And then they spin down. Okay, got >>It. Got it. Interesting. Four >>To 500 bots. You know, Daniel one point play out this vision of a bot chicken in every pot, I called it a bot for every employee. Is that where you're headed or is that kind of in this new ephemeral world, not necessary, it's like maybe every employee has access to an ephemeral bot. How, how are you thinking about that? >>That's a good question. So obviously the, the four to 500 is a mix of unattended bonds versus attended bonds, right? That, that we also have a citizen developer, sort of a group team. We support that as well from a coe. So, you know, we see the future as a mix. There's, there's a spectrum of, we are the professional development team. There's also, we support and nurture the personal automation and we provide the resources to help them build smaller scale automations that help, you know, reduce the, you know, the mundaneness and the hours of their own tasks. But you know, for us, we want to focus more and more on building bigger and bigger transfer transformational automations that really drive process efficiencies and, and savings. >>And what's the, what's the business impact been? You mentioned savings and maybe there's other sort of productivity. How do you measure the benefit, the ROI and, and >>Quantify that we, you know, I, I don't, I don't profess I don't think we have all the right answers, but yeah, simple metrics like number of hours saved or other sort of excitement sort of in like an nps, internal NPS between the different groups that we engage. But we definitely see automation demand coming from our, our functional teams going up, driving up. So it's, it's continued to be a hot area and hopefully we, we can, you know, like, like what the key message and theme of this, of this conference. Essentially we want to take and build upon the, the good work that we've done in terms of rpa and we want to drive it more towards digital transformation. >>So Bill, what are you seeing across the, your customer base in terms of, of, of roi? I'm not looking for percentages there. I'm sure they're off the charts, but in terms of, you know, you can optimize for fast payback, you know, maybe lower the denominator, you know, or you can optimize for, you know, net benefit over time, right? You know, what are you seeing? What are customers after they want fast payback and little quick hits? Or are they looking for sort of a bigger enterprise wide impact? >>Yeah, I think it's, it's the latter. It's that larger impact, right? Obviously they, you know, they want an roi and just depending upon the use case, that's gonna vary in terms of the, the benefits delivered. And a lot of our clients, depending on the industry, so in in life sciences it may be around, you know, compliance like GXP compliance is huge. And so that may may not be much of a time saver, but it ensures that they're, they're running their processes and they're being compliant with, you know, federal standards. So that's, that's one aspect to it. But you know, to, you know, a bank, they're looking to reduce their overall costs and and so on. But yeah, I think, I think the other, the other part of it is, you know, impacting broader business processes. So taking that top down approach versus kind of bottom up, you know, doing ta you know, the ones you choose the tasks is not as impactful as looking at broader across the entire business process and seeing how we can impact >>It. Now, Derek, when you guys support a citizen developer, how does that work? So, hey, I got this task I want to automate, I'm gonna go write a, you know, software robot. I'm gonna go do an automation. Do I just do it and then throw her to the defense? You guys, you guys send me a video on how to do it. Hold my hand. How's that work? >>Yeah, I mean, good question. So, so we obviously direct them to the UI path Academy, get some training. We also have some internal training materials to how to build a bot sort of internal inside Merck. We, we go through, we have writeups and SOPs on using the right framework for automations, using the right documentation, PDD kind of materials, and then ultimately how do we deploy bot inside the MER ecosystem. But I, I, maybe I'll just add, I think you asked the point about ROI before. Yeah. I'll also say because we're, we're a pharmaceutical company. I think one of the other key metrics is actually time saved, right? So if, if, if we have a bot that helps us get through the clinical process or even the getting a, a label approved faster, even if it's eight days saved, that's eight days of a product that can get out to the market faster to, to our patients and, and healthcare professionals. And that's, that, that's immeasurable benefit. >>Yeah, I bet if you compress that ELAP time of, of getting approval and so forth. All right guys, we've gotta go. Thanks so much. Congratulations on all the success and appreciate you sharing your story. Thank >>You so much. Appreciate it. You're welcome. >>Appreciate it. All right. Thank you for watching this Dave Ante for Dave Nicholson, The cubes coverage, two day coverage. We're here in day one, UI path forward, five. We'll be right back right after the short break. Awesome. >>Great.

(upbeat music) >> Welcome back to Supercloud22. This is an open community event, and it's dedicated to tracking the future of cloud in the 2020s. Supercloud is a term that we use to describe an architectural abstraction layer that hides the underlying complexities of the individual cloud primitives and APIs and creates a common experience for developers and users irrespective of where data is physically stored or on which cloud platform it lives. We're now going to explore the nuances of going to market in a world where data architectures span on premises across multiple clouds and are increasingly stretching out to the edge. Paula Hansen is the President and Chief Revenue Officer at Alteryx. And the reason we asked her to join us for Supercloud22 is because first of all, Alteryx is a company that is building a form of Supercloud in our view. If you have data in a bunch of different places and you need to pull in different data sets together, you might want to filter it or blend it, cleanse it, shape it, enrich it with other data, analyze it, report it out to your colleagues. Alteryx allows you to do that and automate that life cycle. And in our view is working to break down the data silos across clouds, hence Supercloud. Now, the other reason we invited Paula to the program is because she's a rockstar female in tech, and since day one at theCube, we've celebrated great women in tech, and in this case, a woman of data, Paula Hansen, welcome to the program. >> Thank you, Dave. I am absolutely thrilled to be here. >> Okay, we're going to focus on customers, their challenges and going to market in this cross cloud, multi-cloud, Supercloud world. First, Paula, what's changing in your view in the way that customers are innovating with data in the 2020s? >> Well, I think we've all learned very clearly over these last two years that the global pandemic has altered life and business as we know it. And now we're in an interesting time from a macroeconomic perspective as well. And so what we've seen is that every company in every industry has had to pivot and think about how they meet redefined customer expectations and an ever evolving competitive landscape. There really isn't an industry that wasn't reshaped in some way over the last couple of years. And we've been fortunate to work with companies in all industries that have adapted to this ever changing environment by leveraging Alteryx to help accelerate their digital transformations. Companies know that they need to unlock the full potential of their data to be able to move quickly to pivot and to respond to their customer's needs, as well as manage their businesses most efficiently. So I think nothing tells that story better than sharing a customer example with you, Dave. We love to share stories of our very innovative customers. And so the one that I'll share with you today in regards to this is Delta Airlines, who we're all very familiar with. And of course Delta's goal is to always keep their airplanes in the air flying passengers and getting people to their destinations efficiently. So they focus on the maintenance of their aircraft as a necessary part of running their business and they need to manage their maintenance stops and the maintenance of their aircraft very efficiently and effectively. So we work with them. They leverage our platform to automate all the processes for their aircraft maintenance centers. And so they've built out a fully automated reporting system on our platform leveraging tons of data. And this gives their service managers and their aircraft technicians foresight into what's happening with their scheduling and their maintenance processes. So this ensures that they've got the right technicians in the service center when the aircrafts land and that everything across that process is fully in place. And previously because of data silos and just complexity of data, this process would've taken them many many hours in each independent service center, and now leveraging Alteryx and the power of analytics and bringing all the data together. Those centers can do this process in just minutes and get their planes back in the air efficiently and delivering on their promises to their customers. So that's just one of many examples that we have in terms of the way the Alteryx analytics automation helps customers in this new age and helping to really unlock the power of their data. >> You know, Paul, that's an interesting example. Because in a previous life I worked with some airlines and people maybe don't realize this but, aircraft maintenance is the mission critical application for carriers. It's not the booking system. Because we've been there before, we show you there's a problem when you're booking or sometimes it's unfortunate, but people they get de booked. But the aircraft maintenance is the one that matters the most and that keeps planes in the air. So we hear all the time, you just mention it. About data silos and how problematic they are. So, specifically how are you seeing customers thinking about busting the data silos? >> Yeah, that's right, it's a big topic right now. Because companies realize that business processes that they run their business with, is very cross-functional in nature and requires data across every department in the enterprise. And you can't keep data locked in one department. So if you think of business processes like pay to procure or quote to cash, these are business processes that companies in every industry run their business. And that requires them to get data from multiple departments and bring all of that data together seamlessly to make the best business decisions that they can make. So what our platform does is, and is really well known for, is being very easy for users number one, and then number two, being really great at getting access to data quickly and easily from all those data silos, really, regardless of where it is. We talk about being everywhere. And when we say that we mean, whether it's on-prem, in your legacy applications and databases, or whether it's in the cloud with of course, all the multiple cloud platforms and modern cloud data warehouses. Regardless of where it is, we have the ability to bring that data together across hundreds of different data sources, bring it together to help drive insights and ultimately help our customers make better decisions, take action, and deliver on the business outcomes that they all are trying to drive within their respective industries. And what's- >> You know- >> Go ahead. >> Please carry on. >> Well, I was just going to say that what I do think has really sort of a tipping point in the last six months in particular is that executives themselves are really demanding of their organizations, this democratization of data. And the breaking down of the silos and empowering all of the employees across their enterprise regardless of how sophisticated they are with analytics to participate in the analytic opportunity. So we've seen some really cool things of late where executives, CEOs, chief financial officers, chief data officers are sponsoring events within their organizations to break down these silos and encourage their employees to come together on this democratization opportunity of democratization of data and analytics. And there's a shortage of data scientists on top of this. So there's no way that you're going to be able to hire enough data scientists to make sense of all this data running around your enterprise. So we believe with our platform we empower people regardless of their skillset. And so we see executives sponsoring these hackathons within their environments to bring together people to brainstorm and ideate on use cases, to share examples of how they leverage our platform and leverage the data within their organization to make better decisions. And it's really quite cool. Companies like Stanley Black & Decker, Ingersoll Rand, Inchcape PLC, these are all companies that the executive team has sponsored these hackathon events and seen really powerful things come out of it. As an example Ingersoll Rand sponsored their Alteryx hackathon with all of their data workers across various different functions where the data exists. And they focused on both top line revenue use cases as well as bottom line efficiency cases. And one of the outcomes was a use case that helped with their distribution center in north America and bringing all the data together across their various applications to reduce the amount of over ordering and under ordering of parts and more effectively manage their inventory within that distribution center. So, really cool to see this is now an executive level board level conversation. >> Very cool, a hackathon bringing people together for collaboration. A couple things that you said I want to comment on. Again, one of the reasons why we invited you guys to come on is, when you think about on-prem data and anybody who follows theCube and my breaking analysis program, knows we're big fans of Zhamak Dehghani's concept of data mesh. And data mesh is supposed to be inclusive. It doesn't matter if it's an S3 bucket, Oracle data base, or data warehouse, or data lake, that's just a note on the data mesh. And so it should be inclusive and Supercloud should include on-prem data to the extent that you can make that experience consistent. We have a lot of technical sessions here at Supercloud22, we're focusing now and go to market and the ecosystem. And we live in a world of multiple partners exploding ecosystems. And a lot of times it's co-opetition. So Paula, when you joined Alteryx you brought a proven go to market discipline to the company. Alignment with the customer, playbooks, best practice of sales, et cetera. And we've seen the results. It's a big reason why Mark Anderson and the board promoted you to president just after 10 months. Summarize how you approached the situation at Alteryx when you joined last spring. >> Yeah, I think first we were really intentional about what part of the market, what type of enterprises get the most benefit from the innovation that we deliver? And it's really clear that it's large enterprises. That the more complex a company is, most likely the more data they have and oftentimes the more decentralized that data is. And they're also really all trying to figure out how to remain competitive by leveraging that data. So, the first thing we did was be very intentional that we're focused on the enterprise and building out all of the capability required to be able to serve the enterprise. Of course, essential to all of that is having a platform capability because enterprises require that. So, with Suresh Vittal our Chief Product Officer, he's been fantastic in building out an end to end analytic platform that serves a wide range of analytic capabilities to a wide range of users. And then of course has this flexibility to operate both on-prem and in the cloud which is very important. Because we see this hybrid environment in this multicloud environment being something that is important to our customers. The second thing that I was really focused on was understanding how do you have those conversations with customers when they all are in maybe different types of backgrounds? So the way that you work with a business analyst in the office of finance or supply chain or sales and marketing, is different than the way that you serve a data scientist or a data engineer in IT. The way that you talk to a business owner who wants not to really understand the workflow level of data but wants to understand the insights of data, that's a different conversation. When you want to have a conversation of analytics for all or democratization of analytics at the executive level with the chief data officer or a CIO, that's a whole different conversation. And so we've built very specific sales plays to be able to have those conversations bring the relevant information to the relevant person so that we're really making sure that we explain the value proposition of the platform. Fully understand their world, their language and can work with them to deliver the value to them. And then the third thing that we did, was really heavily invest in our partnerships and you referenced this day. It's a a broad ecosystem out there. And we know that we have to integrate into that broad data ecosystem. and be a good partner to serve our customers. So, we've invested both in technology integration as well as go to market strategies with cloud data warehouse companies like Snowflake and Databricks, or RPA companies like UiPath and Blue Prism, as well as a wide range of other application and all of the cloud platforms because that's what our customers expect from us. So that's been a really important sort of third pillar of our strategy in making sure that from a go to market perspective, we understand where we fit in the ecosystem and how we collectively deliver on value to our joint customers. >> So that's super helpful. What I'm taking away from this is you didn't come to it with a generic playbook. Frank Lyman always talks about situation leadership. You assess the situation and applied that and a great example of partners is Snowflake and Databricks, these sort of opposites, but trying to solve similar problems. So you've got to be inclusive of all that. So we're trying to sort of squint through this Paula and say, okay, are there nuances and best practices beyond some of the the things that you just described that are unique to what we call Supercloud? Are there observations you can make with respect to what's different in this post isolation economy? Specifically in managing remote employees and of course remote partners, working with these complex ecosystems and the rise of this multi-cloud world, is it different or is it same wine new bottle? >> Well, I think it's both common from the on-prem or pre-cloud world, but there's also some differences as well. So what's common is that companies still expect innovation from us and still want us to be able to serve a wide range of skill sets. So our belief is that regardless of the skill set that you have, you can participate in the analytics opportunity for your company and unlocking the potential of your data. So we've been very focused since our inception to build out a platform that really serves this wide range of capabilities across the enterprise space. What's perhaps changed more or continues to evolve in this cloud world is just the flexibility that's required. You have to be everywhere. You have to be able to serve users wherever they are and be able to live in a multi-cloud or super cloud world. So when I think of cloud, I think it just unlocks a whole bigger opportunity for Alteryx and for companies that want to become analytic leaders. Because now you have users all over the globe, many of them looking for web-based analytic solutions. And of course these enterprises are all in various places on their journey to cloud and they want a partner and a platform that operates in all of those environments, which is what we do at Alteryx. So, I think it's an exciting time. I think that it's still very early in the analytic market and what companies are going to do to leverage their data to drive their transformation. And we're really excited to be a part of it. >> So last question is, I said up front we always like to celebrate women in tech. How'd you get into tech.? You've got a background, you've got somewhat of a technical background of being technical sales. And then of course rose up throughout your career and now have a leadership position. I called you a woman of data. How'd you get into it? Where'd you find the love of data? Give us the background and help us inspire some of the young women out there. >> Oh, well, but I'm super passionate about inspiring young women and thinking about the future next generation of women that can participate in technology and in data specifically. I grew up loving math and science. I went to school and got an electrical engineering degree but my passion around technology hasn't been just around technology for technology's sake, my passion around technology is what can it enable? What can it do? What are the outcomes that technology makes possible? And that's why data is so attractive because data makes amazing things possible. I shared some of those examples with you earlier but it not only can we have effect with data in businesses and enterprise, but governments globally now are realizing the ability for data to really have broad societal impact. And so I think that that speaks to women many times. Is that what does technology enable? What are the outcomes? What are the stories and examples that we can all share and be inspired by and feel good and and inspired to be a part of a broader opportunity that technology and data specifically enables? So that's what drives me. And those are the conversations that I have with the women that I speak with in all ages all the way down to K through 12 to inspire them to have a career in technology. >> Awesome, the more people in STEM the better, and the more women in our industry the better. Paula Hansen, thanks so much for coming in the program. Appreciate it. >> Thank you, Dave. >> Okay, keep it right there for more coverage from Supercloud 22, you're watching theCube. (upbeat music)

>> From theCUBE studios in Palo Alto in Boston, bringing you data driven insights from theCUBE and ETR, this is "Breaking Analysis" with Dave Vellante >> In its early days, robotic process automation emerged from rudimentary screen scraping, macros and workflow automation software. Once a script heavy and limited tool that largely was used to eliminate mundane tasks for individual users, and by the way still is, RPA's evolved into an enterprise-wide mega trend that puts automation at the center of digital business initiatives. Hello and welcome to this week's Wikibon CUBE Insights, powered by ETR. In this breaking analysis, we present our quarterly update of the trends in RPA and automation and share the latest survey data from enterprise technology research. RPA has grown quite rapidly and the acronym is becoming a convenient misnomer in a way. I mean the real action in RPA has evolved into enterprise-wide automation initiatives. Once exclusively focused really on back office automation and areas such as finance, RPA has now become an enterprise initiative as many larger organizations especially, move well beyond cost savings and outside of the CFO's purview. We predicted in early "Breaking Analysis" episodes that productivity declines in the US and Europe especially, would require automation to solve some of the world's most pressing problems. And that's what's happening. Automation today is attacking not only the labor shortage but it's supporting optimizations in ESG, supply chain, helping with inflation challenges, improving capital allocation. For example, the supply chain issues today, think about what they require. Somebody's got to do research, they got to figure out inventory management, they got to go into different systems, do prioritizations, do price matching, and perform a number of other complex tasks. These are time consuming processes. Now the combination of RPA and machine intelligence is helping managers compress the time to value and optimize decision making. Organizations are realizing that a digital business goes beyond cloud and SaaS, and puts data, AI and automation at the core leveraging cloud and SaaS but reimagining entire workflows and customer experiences. Moreover, low code solutions are taking off and dramatically expanding the ability of organizations to make changes to their processes. We're also seeing adjacencies to RPA becoming folded into enterprise automation initiatives. And that trend will continue for example Legacy software testing tools. This is especially important as companies SaaSify their business and look for modern testing tools that can keep pace with their transformations. So the bottom line is, RPA or intelligent automation has become a strategic priority for many companies. And that means you got to get the CIO involved to ensure that the governance and compliance edicts of the organization are appropriately met. And that alignment occurs across the technology and business lines. A couple of years ago, when we saw that RPA could be much much more than what it was at the time, we revisited our total available market or TAM analysis. And in doing so, we felt there would be a confluence of automation, AI, and data and that the front and back office schism would converge. That is shown here. This is our updated TAM chart, which we shared a while back with a dramatically larger scope. We were interested that, just a few days ago by the way Forrester put out a new report, picked up by Digital Nation, that the RPA market would reach 22 billion by 2025. Now, as we said at the time our TAM includes the entire ecosystem including professional services as does Forrester's recent report and the projections they're in. So see that little dotted red line there, that's about at the 22 billion mark. We're a few years away but we definitely feel as though this is taking shape the way we had previously envisioned. That is to say a progression from back office blending with customer facing processes becoming a core element of digital transformations and eventually entering the realm of automated systems of agency where automations are reliable enough and trusted enough to make realtime decisions at scale for a much, much wider scope of enterprise activities. So we see this evolving over the 2020s or the balance of this decade and becoming a massive multi hundred billion dollar market. Now, unfortunately for later investors, this enthusiasm that I'm sharing around automation has not translated into price momentum for the stocks in this sector. Here are the charts, the stock charts for four RPA related players with market values inserted in each graphic. We've set the cross hairs approximately at the timing of UiPath's IPO. And that's where we'll start. UiPath IPOed last April and you can see the steady decline in its price. UiPath's Series F investors got in at $30 billion valuation, so that's been halved, more than half. But UiPath is the leader in this sector as we'll see in a moment. So investors are just going to have to be patient. Now, you know the problem with these hot tech companies is the cat gets let out of the bag before the IPO because they raise so much private money, it hits the headlines and then, at the time you had zero interest rates, you had the tech stock boom during the pandemic, so you're just going to have to wait it out to get a nice return if you got in sort of post IPO. You know, which... I think this business will deliver over the long term. Now, Blue Prism is interesting because it's being bought by SS&C Technologies after a bidding war with Vista. So that's why their stock has held up pretty reasonably. Vista's PE firm, which owns TIBCO and was going to mash it, Blue Prism that is, together with TIBCO. That was a play I always liked because RPA is going to be integrated across the board. And TIBCO is an integration company, and I felt it was in a good position to do that. But SS&C obvious said, "Hey, we can do that too." And look, they're getting a proven RPA tech stack for 10% of the value of UiPath. Might be a sharp move, we'll see. Or maybe they'll jack prices and squeeze the cashflow, I honestly have no idea. And we shelled the other two players here who really aren't RPA specialists. Appian is a low code business process development platform and Pegasystems of course, we've reported on them extensively. They're a longtime business process player that has done pretty well. But both stocks have suffered pretty dramatically since last April. So let's take a look at the customer survey data and see what it tells us. The ETR survey data shows a pretty robust picture frankly. This chart depicts the net score or customer spending momentum on that vertical axis and market share or pervasiveness relative to other companies and technologies in the ETR dataset, that's on the horizontal. That red dotted line at the 40% mark, that indicates an elevated spending level for the company within this technology. The chart insert you see there shows how the company positions are plotted using net score and market share or Ns. And ETR's tool has a couple of cool features. We can click on the dot and it allows you to track the progression over time, in this case going back to January, 2020 that's the lines that we've inserted here. So we'll start with Microsoft and we'll get that over with. Microsoft acquired a company called Softomotive for a reported a hundred million dollars thereabout, it's a little more than that. So pretty much a lunch money for Mr. Softy. So Microsoft bought the company in May and look at the gray line where it started showing up in the October ETR surveys at a very highly elevated level, typical Microsoft, right? I mean, a lot of spending momentum and they're pretty much ubiquitous. And it just stayed there and it's gone up and to the right, just really a dominant picture. But Microsoft Power Automate is really kind of a personal productivity tool not super feature rich like some of the others that we're going to talk about, it's just part of the giant Microsoft software estate. And there's a substantial amount of overlap between, for example, UiPath's and Automation Anywhere's customer bases and Power Automate users. And it's speaking with the number of customers. They'll say, "Yeah, we use Power Automate," but they see enterprise automation platforms as much more feature rich and capable and they see a role for both. But it's something to watch out for because Microsoft can obviously take a bite out of virtually any platform and moderate the enthusiasm for it. But nonetheless, these other firms that we're mentioning here, the two leaders, they really stand out, UiPath and Automation Anywhere. Both are elevated well above that 40% line with a meaningful presence in the data set. And you can see the path that they took to get to where they are today. Now we had predicted in 2021 in our predictions post that Automation Anywhere would IPO in 2021. So we predicted that in December of 2020 but it hasn't happened yet. The company obviously wasn't ready, and it brought in new management. We reported on that, Chris Riley as the Chief Revenue Officer, and it made other moves to show up their business. Now let me say this about Riley. I've known him him for years, he's a world class sales leader, one of the best in the tech business. And he knows how to build a world class go to market team, I guarantee that's what he's doing. I have no doubt he's completely reinventing his sales team, the alliances, he's got a lot of experience of that when he was at EMC and Dell and HPE, and he knows the channel really well. So I have a great deal of confidence that if Automation Anywhere's product is any good, which the ETR data clearly shows that it is, then the company is going to do very well. Now, as for the timing of an IPO, look, with the market choppiness, who knows? Automation Anywhere, they raised a ton of dough and it was last valued around... In 2019, it was just north of 7 billion. And so if UiPath is valued at 15 billion, you could speculate that Automation Anywhere can't be valued at much more than 10 billion, maybe a little under, maybe a little over. And so they might wait for the market volatility to chill out a little bit before they do the IPO or maybe they've got some further cleanup to do and they want to get their metrics better, but we'll see. Now to the point earlier about Blue Prism, look at its position on the vertical axis, very respectable. Just a finer point on Pega. We've always said that they're not an RPA specialist but they have an RPA offering and a presence in the ETR data set in this sector. And they got a sizeable market cap so we'd like to include them. Now here's another look at the net score data. The way net score works is ETR asks customers, are you adopting a platform for the first time? That's that lime green there. Are you accelerating spending on the platform by 6% or more relative to last year, or sometimes relative to some other point in time, this is relative to last year. That's the forest green. Is your spending flat or is it, that's the gray, or is it decreasing by 6% or worse? Or are you churning? That's that bright red. You subtract the reds from the greens and you get net score which is shown for each company on the right along with the Ns in the survey. So other than Pega, every company shown here has new adoptions in the double digits, not a lot of churn. UiPath and and Automation Anywhere have net scores well over that 40% mark. Now, some other data points on those two, ETR did a little peeling of the onion in their data set and I found a couple of interesting nuggets. UiPath in the Fortune 500 has a 91% net score and a 77% net score in the Global 2000. So significantly higher than its overall average. This speaks to the company's strong presence in larger companies and the adoption and how larger companies are leaning in. Although UiPath's actually still solid in smaller firms as well by the way but... Now the other piece of information is, when asked why they buy UiPath over alternatives customers said a robust feature set, technical lead and compatibility with their existing environment. Now to Automation Anywhere. They have a 72% net score in the Fortune 500, well above its average across the survey, but 46% only in the Global 2000 below its overall average shown here of 54. So we'd like to see a wider aperture in the Global 2000. Again, this is a survey set, who knows, but oftentimes these surveys are indicative. So maybe Automation Anywhere just working that out, more time, figuring out the go to market in the Global 2000 beyond those larger customers. Now, when asked why they buy from Automation Anywhere versus the competition customers cited a robust feature set, just like UiPath, technological lead, just like UiPath, and fast ROI. Now I really believe that both for Automation Anywhere and UiPath, the time to value is much compressed relative to most technology projects. So I would highlight that as well. And I think that's a fundamental reason, one of the reasons why RPA has taken off. All right let's wrap up. The bottom line is this space is moving and it's evolving quickly, and will keep on a fast pace given the customer poll, the funding levels that have been poured into the space, and, of course, the competitive climate. We're seeing a new transformation agenda emerge. Pre COVID, the catalyst was back office efficiency. During the pandemic, we saw an acceleration and organizations are taking the lessons learned from that forced March experience, the digital I sometimes call it, and they're realizing a couple things. One, they can attack much more complex problems than previously envisioned. And two, in order to cloudify and SaaSify their businesses, they need to put automation along with data and AI at the core to completely transform into a digital entity. Now we're moving well beyond automating bespoke tasks and paving the cow path as I sometimes like to say. And we're seeing much more integration across systems like ERP and HR and finance and logistics et cetera, collaboration, customer experience, and importantly, this has to extend into broader ecosystems. We're also seeing a rise in semantic workflows to tackle more complex problems. We're talking here about going beyond a linear process of automation. Like for instance, read this, click on that, copy that, put it here, join it with that, drag and drop it over here and send it over there. It's evolving into a much more interpreter of actions using machine intelligence to watch, to learn, to infer, and then ultimately act as well as discover other process automation opportunities. So think about the way work is done today. Going into various applications, you grab data, you trombone back out, you do it again, in and out, in and out, in and out of these systems, et cetera, NASM, and replacing that sequence with a much more intelligent process. We're also seeing a lot more involvement from C-level executives, especially the CIO, but also the chief digital officer, the chief data officer, with low code solutions enabling lines of business to be much more involved in the game. So look, it's still early here. This sector, in my view, hasn't even hit that steep part of the S-curve yet, it's still building momentum with larger firms leading the innovation, investing in things like centers of excellence and training, digging in to find new ways of doing things. It's a huge priority because the efficiencies that large companies get, they drop right to the bottom line and the big ER the more money that drops. We see that in the adoption data and we think it's just getting started. So keep an eye on this space. It's not a fad, it's here to stay. Okay, that's it for now. Thanks to my colleagues, Stephanie Chan who helped research this week's topics and Alex Myerson on the production team who also manages the Breaking Analysis Podcast, Kristen Martin and Cheryl Knight, helped get the word out on social. Thanks guys. Your great teamwork, really appreciate that. Now remember, these episodes, they're all available as podcasts, wherever you listen just search "Breaking Analysis Podcast". Check out ETR's website at etr.ai. And we also publish a full report every week on wikibon.com and siliconangle.com. You can get in touch with me directly, david.vellante@siliconangle.com is my email. You can DM me @dvellante or comment on our LinkedIn posts. This is Dave Vellante for theCUBE Insights, powered by ETR. Have a great week, stay safe, be well, and we'll see you next time. (outro music)

>> From The Cube studios in Palo Alto in Boston, bringing you data driven insights from The Cube and ETR, this is Breaking Analysis with Dave Vellante. >> UiPath has always been an unconventional company. You know it started with humble beginnings. It's essentially a software development shop. Then it caught lightning in a bottle with its computer vision technology. It's really, it's simplification mantra and it created a very easy to deploy software robot system for bespoke departments so they could automate mundane tasks. You know the story. The company grew rapidly, was able to go public early this year. Now consistent with its out-of-the-ordinary approach, while other firms are shutting down travel and physical events, UiPath is moving ahead with Forward IV, it's annual user conference next week with a live audience there at the Bellagio in Las Vegas. It's also fast forwarding as a company, determined to lead the charge beyond RPA and execute on a more all-encompassing Enterprise automation agenda. Hello everyone and welcome to this week's Wikibond Cube Insights powered by ETR. In this breaking analysis and ahead of Forward IV, we'll update you in the RPA market the progress that UiPath has made since its IPO and bringing some ETR customer survey data that's contextualized the company's position in the overall market and relative to the competition. Here's a quick rundown of today's agenda. First I want to tell you theCube is going to be at Forward IV at the Bellagio next week. UiPath, this is their big customer event. It's live, it's a physical event. It's primarily outdoors. You have to be vaccinated to attend. Now, this not completely out of the ordinary. John Furrier and theCube were at AWS Public Sector this past week and we were at Mobile World Congress in one of the first big hybrid events of the year at Barcelona. We thought that event would kick of the fall event season, live event in earnest but the COVID crisis has caused many tech firms, most tech firms actually, to hit pause button. Not UiPath, they're moving ahead. They're going forward and we see a growing trend for smaller VIP events with a virtual component, topic maybe for another day. Now we've talked extensively about the productivity challenges and the automation mandate the pandemic has thrust upon us. Now, we've seen pretty dramatic productivity improvements as remote work kicked in but its brought new stresses. For example, according to Qualtrics, 32% of working moms said their mental health has declined since the pandemic hit. 15% of working dads said the same by the way. So, one has to question the sustainability of this perpetual workday. And we're seeing a continuum of automation solutions emerging and we'll talk about that today. We're seeing tons of M&A as well but now, in that continuum, on the left-side of the spectrum, there's Microsoft who in some ways, they stand alone and their Azure is becoming ubiquitous as a SaaS-Cloud collaboration and productivity platform. Microsoft is everywhere and in virtually every market, whether video conferencing, security, database, cloud, CRM, analytics, you name it. Microsoft is pretty much there and RPA is no different. With the acquisition of Softomotive last year, Microsoft entered the RTA market in earnest and is penetrating very deeply into the space, particularly as it pertains to personal productivity building on its software stake. Now in the middle of that spectrum if you will, we're seeing more M&A and that's defined really by the big software giants. Think of this domain as integrated software place. SAP, they acquired Contextere. They also acquired a company called Process Insights, Service now acquired Inttellebot. Salesforce acquired Servicetrace, we see Infor entering the frame and I would put even Pega, Pega systems in this camp. Software companies focused on integrating RPA into their broader workflows, into their software platforms and this is important because these platforms are entrenched Their well guardants of thoughts and complicated with lots of touchpoints and integration points and frankly they are much harder to automate because of their entrenched legacy. Now, on the far side of that spectrum, are the horizontal automation players and that's been let by UiPath with automation anywhere as the number two player in this domain. And I even put a blue prism in there more M&A recently announced that Vista is going to acquire them Vista also owns Tibco, they are going to merge those two companies. You know Tibco is come up with the integration play. So again I would put them in that you know, horizontal piece of the spectrum. So with that as background, we're going to look at how UiPath has performed since we last covered them and IPO and I'm going to bring in some ETR survey data to get the spending view from customers and we'll wrap up. Now, just to emphasize the importance of automation and the automation mandate, we talk about it all the time in this program. We use this ETR chart. It's a two dimensional view with net score which is the measure of spending momentum on the vertical axis and market share which is a proxy for pervasiveness in the data set that's on the horizontal axis. Now note that red dotted line, it signifies companies within elevated position on the net score vertical axis anything over that is considered pretty good. Very good. Now this shows every spending segment within the ETR taxonomy. And the four spending categories with the greatest velocity are AI, cloud, containers and RPA. And they have topped the charts for quite a while now. They are the only 4 categories which have sustained above that 40% line consistently throughout the pandemic and even before. Now the impressive thing about cloud of course is it has both spending momentum on the vertical axis and a very large market share or presence in the data set. The point is RPA is nascent still. It has an affinity with AI as a means of more intelligently identifying and streamlining process improvements. And so we expect those two to remain elevated and grow to the right together. UiPath pegs its TAM, total available market at 60 billion. And the reality is that could be understated. Okay, as we reported from the UiPath S1 analysis we did pre IPO, the company at that time had an ARR annual recurring revenue of $580 million and it was growing at 65% annually. And nearly 8000 customers at the time, a 1000 of which had an ARR in excess of a 100k. And the net revenue retention the company had was over 145%. So let's take a look at the pictures 6 months forward. We mentioned the $60 billion TAM, ARR now up over $726.5 million on its way to a billion ARR holding pretty steady at 60% growth as is NRR, net revenue retention and more then a 1000 new customers and 200 more with over a 100000 in ARR and a small operating profit which by the way exceeded the consensuses pretty substantially. Profitability is not shown here and no one seems to care anyway these days. It's all about growing into that TAM. Well that's a pretty good looking picture, isn't it? The company had a beat and a raise for the quarter earlier this month, so looking good right. Well you ask how come the stock is not doing better. That's an interesting question. So let's first look at the stocks performance on a relative basis. Here we show UiPath performance against Pega systems and blue prism, the other two publicly traded automation. Pure plays sort of in the case of Pega. So UiPath outperformed post its IPO but since the early summer Pega is been the big winner while UiPath slowly decelerated. You see Blue prism was at the lag until it was announced that it was in an acquisition talks with a couple of PE firms and the prospects of a bidding war sent that yellow line up as you can see. UiPath as you can see on the inset, has a much higher valuation than Pega and way higher than blue Prism. Pega interestingly is growing revenues nicely at around 40%. And I think what's happening is that the street simply wants more. Even though UiPath beat and raised, Wallstreet is still getting comfortable with management which is new to the public market game and the company just needs to demonstrate a track record and build trust. There's also some education around billings and multi-year contracts that the company addressed on its last earnings call. But the street was concerned about ARR for new logos. It appears to be slowing down sequentially and a notable decline in billings momentum which UiPath CFO addressed on the earnings call saying look they don't need the trade margin for prepaid multi year deals, given the strong cash position. Why give anything up. And even though I said nobody cares about profitability well, I guess that's true until you guide for an operating loss when you've been showing small profit in recent quarters what UiPath did. Then, obviously people start to care. So UiPath is in bit of an unknown territory to the street and it has a valuation, it's pretty rich. Very rich actually at 30 times revenue multiple or greater than 30 times revenue multiple. So that's why in my view, investors are being cautious. But I want to address a dynamic that we have seen with this high growth rocket chip companies. Something we talked about Snowflake and I think you are seeing some of that here with UiPath. Different model in the sense that Snowflake is pure cloud but I'm talking about concerns around ARR and from new logos and that growth in a sequential basis. And here's what's happening in my view with UiPath. You have a company that started within departments with a smaller average contract size, ACV maybe 25000, may be 50000 but not deep six figure deals. That wasn't UiPath's play. And because the company focused so heavily on simplicity and made it really easy to adapt, customers saw really fast ROI. I mean break-even in months. So we very quickly saw expansion into other departments. So when ACV started to rise and installations expanded within each customer, UiPath realized it had to move beyond a point product and it started thing about a platform and making acquisitions like Processgold and others and this marked a much deeper expansion into the customer base. And you can see that here in this UiPath chart that they shared at their investor deck, customers that bought in 2016 and 2017 expanded their spend 13, 15, 18, 20x So the LTV, life time value of the customer is growing dramatically and because UiPath is focused on simplicity, and has a very facile premium model much easier to try before you buy than its competitors it's CAC, Customer acquisition cost are likely much lower than some of its peers. And that's a key dynamic. So don't get freaked out by some of those concerns that we raised earlier because just like Snowflake what's happening is that the company for sure is gaining new customers, may be just not at the same rate but don't miss the forest through the trees I.e getting more money from their existing customers which means retention, loyalty and growth. Now speaking of forest, this chart is the dynamic I'm talking about, its an ETR graphic that shows the components of net score against spending momentum. Net score breaks down into 5 areas. That lime green at the top is new additions. Okay, so that's only 11% of the customer mentions. By the way we are talking about more than a 125 responses for UiPath. So it's meaningful, it's actually larger in this survey or certainly comparable to Microsoft. So that's just something right there. The next bar is the forest green. Forest green is what I want you to focus. That's customer spending 6% or more in the second half of the year relative to the first half. The gray is flat spending which is quite large. The pink or light red, that's spending customers spending 6% or worse, that's a 4% number. But look at the bottom bar. There is no bar, that's churn. 0% of the responders in the survey are churning. And Churn is the silent killer of SaaS companies. 0% defections. So you've got 46% spending more, nobody leaving. That's the dynamic powering UiPath right now and I would take this picture any day over a larger lime green and a smaller forest green and a bigger churn number. Okay, it's pretty good, not Snowflake good but it's solid. So how does this picture compare to UiPath's peers. Let's take a look at that. So this is ETR data, same data showing the granularity net score for Microsoft power automate, UiPath automation anywhere, Blue Prism and Pega. So as we said before, Microsoft is ubiquitous. What can we say about that. But UiPath is right there with a more robust platform. Not to overlook Microsoft, you can't but UiPath will you that the don't compete head to head for enterprise automation deals with Microsoft and may be they will over time. They do however compete head to head with automation anywhere. And their picture is quite strong as you can see here. You know as is Blue Prism's picture and even Pega. Although Blue Prism automation anywhere UiPtah and power automate all have net scores on this chart as you can see the tables in the upper right over 40%, Pega does not. But you can see Pega as a pure play RPA vendor it's a little bit of sort of apples and oranges there but they do sell RPA and ETR captures in their taxonomy so why not include them. Also note that UiPath has as I said before more mentions in the survey than power automate which is actually quite interesting given the ubiquity of Microsoft. Now, one other notable note is the bright red that's defections and only UiPath is showing zero defections Everybody else has at least little of the slims on defections. Okay, so take that as you will but its another data point, the one that is powerful nit only for UiPath but really for the entire sector. Now the last ETR data point that we want to share is the famous two dimensional view. Like the sector chart we showed earlier, this graphic shows the net score on the vertical axis that's against spending velocity and market share or pervasiveness on the horizontal axis. So as we said earlier, UiPath actually has a greater presence in the survey than the ever present Microsoft. Remember, this is the July survey. We don't have full results from the September-October survey yet and we can't release them until ETR is out of its quiet period but I expect the entire sector, like everything is going to be slightly down because as reported last week tech spending is moderated slightly in the second half of this year. But we don't expect the picture to change dramatically UiPath and power automate we think are going to lead in market presence and those two plus automation anywhere is going to show the strength in spending momentum as will most of the sector. We'll see who comes in above the 40% line. Okay, what to watch at Forward IV. So in summary I'll be looking for a few things. One, UiPath has hinted toward a big platform announcement that will deepen its capabilities to beyond being an RPA point tool into much more of an enterprise automation platform, rewriting a lot of the code Linux, cloud, better automation of the UI, you are going to hear all kind of new product announcements that are coming so I'll be listening for those details. I want to hear more from customers that further confirm what I've been hearing from them over the last couple of years and get more data especially on their ROI, on their land and expand, I want to understand that dynamic and that true enterprise automation. It's going to be good to get an update face to face and test some of our assumptions here and see where the gaps are and where UiPath can improve. Third, I want to talk to ecosystem players to see where they are in participating in the value chain here. What kind of partner has UiPath become since its IPO, are they investing more in the ecosystem, how do partners fit into that flywheel. Fourth, I want to hear from UiPath management Daniel Dines and other UiPath leaders, their exiting toddler wheel and coming into an adolescence phase or early adulthood. And what does that progression look like, how does it feel, what's the vibe at the show. And finally I'm very excited to participate in a live in-person event to see what's working, to see how hybrid events are evolving, we got to good glimpse at Mobile congress and this week in DC at public sector summit. As you know theCube is doing hybrid events for years and we intend to continue to lead in this regard and bring you the best real time information as possible. Okay, that's it for today. Remember these episodes are all available as podcasts wherever you listen, all you do is search breaking analysis podcast. We publish each week on Wikibound.com and Siliconangle.com and you can always connect on twitter @dvellante or email me at David.vellante@siliconangle.com Appreciate the comments on LinkedIn and don't forget to check out ETR.plus for all the survey data. This is Dave Vellante for theCube insights powered by ETR. Be well and will see you next time. (upbeat music)

>> From theCUBE studios in Palo Alto and Boston, bringing you data-driven insights from theCUBE and ETR, this is Breaking Analysis with Dave Vellante. >> The steepest drop in the stock market since June 11th flipped the narrative and sent investors scrambling. Tech got hammered after a two-month run, and people are asking questions. Is this a bubble popping, or is it a healthy correction? Are we now going to see a rotation into traditional stocks, like banks and maybe certain cyclicals that have lagged behind the technology winners? Hello, everyone, and welcome to this week's episode of Wikibon's CUBE Insights powered by ETR. In this Breaking Analysis, we want to give you our perspective on what's happening in the technology space and unpack what this sentiment flip means for the balance of 2020 and beyond. Let's look at what happened on September 3rd, 2020. The tech markets recoiled this week as the NASDAQ Composite dropped almost 5% in a single day. Apple's market cap alone lost $178 billion. The Big Four: Apple, Microsoft, Amazon, and Google lost a combined value that approached half a trillion dollars. For context, this number is larger than the gross domestic product for countries as large as Thailand, Iran, Austria, Norway, and even the UAE, and many more. The tech stocks that have been running due to COVID, well, they got crushed. These are the ones that we've highlighted as best positioned to thrive during the pandemic, you know, the work-from-home, SaaS, cloud, security stocks. We really have been talking about names like Zoom, ServiceNow, Salesforce, DocuSign, Splunk, and the security names like CrowdStrike, Okta, Zscaler. By the way, DocuSign and CrowdStrike and Okta all had nice earnings beats, but they still got killed underscoring the sentiment shift. Now the broader tech market was off as well on sympathy, and this trend appears to be continuing into the Labor Day holiday. Now why is this happening, and why now? Well, there are a lot of opinions on this. And first, many, like myself, are relatively happy because this market needed to take a little breather. As we've said before, the stock market, it's really not reflecting the realities of the broader economy. Now as we head into September in an election year, uncertainty kicks in, but it really looks like this pullback was fueled by a combination of an overheated market and technical factors. Specifically, take a look at volatility indices. They were high and rising, yet markets kept rising along with them. Robinhood millennial investors who couldn't bet on sports realized that investing in stocks was as much of a rush and potentially more lucrative. The other big wave, which was first reported by the Financial Times, is that SoftBank made a huge bet on tech and bought options tied to around $50 billion worth of high-flying tech stocks. So the option call volumes skyrocketed. The call versus put ratio was getting way too hot, and we saw an imbalance in the market. Now market makers will often buy an underlying stock to hedge call options to ensure liquidity in these cases. So to be more specific, delta in options is a measure of the change in the price of an option relative to the underlying stock, and gamma is a measure of the volatility of the delta. Now usually, volatility is relatively consistent on both sides of the trade, the calls and the puts, because investors often hedge their bets. But in the case of many of these hot stocks, like Tesla, for example, you've seen the call skew be much greater than the skew in the downside. So let's take an example. If people are buying cheap out of the money calls, a market maker might buy the underlying stock to hedge for liquidity. And then if Elon puts out some good news, which he always does, the stock goes up. Market makers have to then buy more of the underlying stock. And then algos kick in to buy even more. And then the price of the call goes up. And as it approaches it at the money price, this forces market makers to keep buying more of that underlying stock. And then the melt up until it stops. And then the market flips like it did this week. When stock prices begin to drop, then market makers were going to rebalance their portfolios and their risk and sell their underlying stocks, and then the rug gets pulled out from the markets. And that's really why some of the stocks that have run dropped so precipitously. Okay, why did I spend so much time on this, and why am I not freaking out? Because I think these market moves are largely technical versus fundamental. It's not like 1999. We had a double whammy of technical rug pulls combined with poor underlying fundamentals for high-flying companies like CMGI and Internet Capital Group, whose businesses, they were all about placing bets on dot-coms that had no business models other than non-monetizable eyeballs. All right, let's take a look at the NASDAQ and dig into the data a little bit. And I think you'll see what I mean and why I'm not too concerned. This is a year-to-date chart of the NASDAQ, and you can see it bottomed on March 23rd at 6,860. And then ran up until June 11th and had that big drop, but was still elevated at 9,492. And then it ran up to over 12,000 and hit an all-time high. And then you see the big drop. And that trend continued on Friday morning. The NASDAQ Composite traded below 11,000. It actually corrected to 10% of its high, 9.8% to be precise, and then it snapped back. But even at its low, that's still up over 20% for the year. In the year of COVID, would that have surprised you in March? It certainly would have surprised me. So to me, this pullback is sort of a relief. It's good and actually very normal and quite predictable. Now the exact timing of these pullbacks, of course, on the other hand is not entirely predictable. Not at all, frankly, at least for this observer. So the big question is where do we go from here? So let's talk about that a little bit. Now the economy continues to get better. Take a look at the August job report; it was good. 1.4 million new jobs, 340,000 came from the government. That was positive numbers. And the other good news is it translates into a drop in unemployment under 10%. It's now at 8.4%. And this is really good relative to expectations. Now the sell-off continued, which suggested that the market wanted to keep correcting, so that's good. Maybe some buying opportunities would emerge in over the next several months, the market snapped back, but for those who have been waiting, I think that's going to happen. And so that snapback, maybe that's an indicator that the market wants to keep going up, we'll see. But I think there are more opportunities ahead because there's really so much uncertainty. What's going to happen with the next round of the stimulus? The jobs report, maybe that's a catalyst for compromise between the Democrats and the Republicans, maybe. The US debt is projected to exceed 100% of GDP this calendar year. That's the highest it's been since World War II. Does that give you a good feeling? That doesn't give me a good feeling. And when we talk about the election, that brings additional uncertainty. So there's a lot to think about for the markets. Now let's talk about what this means for tech. Well, as we've been projecting for months with our colleagues at ETR, despite what's going on in the stock market and its rise, there's those real tech winners, we still see a contraction in 2020 for IT spend of minus 5 to 8%. And we talk a lot about the bifurcation in the market due to COVID accelerating some of these trends that were already in place, like digital transformation and SaaS and cloud. And then the work-from-home kicks in with other trends like video conferencing and the shift to security spend. And we think this is going to continue for years. However, because these stocks have run up so much, they're going to have very tough compares in 2021. So maybe time for a pause. Now let's take a look at the IT spending macroeconomics. This data is from a series of surveys that ETR conducted to try to better understand spending patterns due to COVID. Those yellow slices of the pies show the percent of customers that indicate that their budgets will be impacted by coronavirus. And you can see there's a steady increase from mid-March, which blend into April, and then you can see the June data. It goes from 63% saying yes, which is very high, to 78%, which is very, very high. And the bottom part of the chart shows the degree of that change. So 22% say no change in the latest survey, but you can see much more of a skew to the red declines on the left versus the green upticks on the right-hand side of the chart. Now take a look at how IT buyers are seeing the response to the pandemic. This chart shows what companies are doing as a result of COVID in another recent ETR survey. Now of course, it's no surprise, everybody's working from home. Nobody's traveling for business, not nobody, but most people aren't, we know that. But look at the increase in hiring freezes and freezing new IT deployments, and the sharp rise in layoffs. So IT is yet again being asked to do more with less. They're used to it. Well, we see this driving an acceleration to automation, and that's going to benefit, for instance, the RPA players, cloud providers, and modern software vendors. And it will also precipitate a tailwind for more aggressive AI implementations. And many other selected names are going to continue to do well, which we'll talk about in a second, but they're in the work-from-home, the cloud, the SaaS, and the modern data sectors. But the problem is those sectors are not large enough to offset the declines in the core businesses of the legacy players who have a much higher market share, so the overall IT spend declines. Now where it gets kind of interesting is the legacy companies, look, they all have growth businesses. They're making acquisitions, they're making other bets. IBM, for example, has its hybrid cloud business in Red Hat, Dell has VMware and it's got work-from-home solutions, Oracle has SaaS and cloud, Cisco has its security business, HPE, it's as a service initiative, and so forth. And again, these businesses are growing faster, but they are not large enough to offset the decline in core on-prem legacy and drive anything more than flat growth, overall, for these companies at best. And by the time they're large enough, we'll be into the next big thing, so the cycle continues. But these legacy companies are going to compete with the upstarts, and that's where it gets interesting. So let's get into some of the specific names that we've been talking about for over a year now and make some comments around their prospects. So what we want to do is let's start with one of our favorites: Snowflake. Now Snowflake, along with Asana, JFrog, Sumo Logic, and Unity, has a highly anticipated upcoming IPO. And this chart shows new adoptions in the database sector. And you can see that Snowflake, while down from the October 19th survey, is far outpacing its competitors, with the exception of Google, where BigQuery is doing very well. But you see Mongo and AWS remain strong, and I'm actually quite encouraged that it looks like Cloudera has righted the ship and you kind of saw that in their earnings recently. But my point is that Snowflake is a share gainer, and we think will likely continue to be one for a number of quarters and years if they can execute and compete with the big cloud players, and that's a topic that we've covered extensively in previous Breaking Analysis segments, and, as you know, we think Snowflake can compete. Now let's look at automation. This is another space that we've been talking about quite a bit, and we've largely focused on two leaders: UiPath and Automation Anywhere. But I have to say, I still like Blue Prism. I think they're well-positioned. And I especially like Pegasystems, which has, for years, been embarking on a broader automation agenda. What this chart shows is net score or spending velocity data for those customers who said they were decreasing spend in 2020. Those red bars that we showed earlier are the ones who are decreasing. And you can see both Automation Anywhere and UiPath show elevated levels within that base where spending is declining, so that's a real positive. Now Microsoft, as we've reported, is elbowing its way into the market with what is currently an inferior point product, but, you know, it's Microsoft, so we can't ignore that. And finally, let's have a look at the all-important security sector, which we've covered extensively and put out a report recently. So what this next chart does is cherry-picks of a few of our favorite names, and it shows the net score or spending momentum and the granularity for some of the leaders and emerging players. All of these players are in the green, as you can see in the upper right, and they all have decent presence in the dataset as indicated by the shared NS. Okta is at the top of the list with 58% net score. Palo Alto, they're a more mature player, but still, they have an elevated net score. CrowdStrike's net score dropped this quarter, which was a bit of a concern, but it's still high. And it followed by SailPoint and Zscaler, who are right there. The big three trends in this space right now are cloud security, identity access management, and endpoint security. Those are the tailwinds, and we think these trends have legs. Remember, net score in this survey is a forward-looking metric, so we'll come back and look at the next survey, which is running this month in the field from ETR. Now everyone on this chart has reported earnings, except Zscaler, which reports on September 9th, and all of these companies are doing well and exceeding expectations, but as I said earlier, next year's compares won't be so easy. Oh, and by the way, their stock prices, they all got killed this week as a result of the rug pull that we explained earlier. So we really feel this isn't a fundamental problem for these firms that we're talking about. It's more of a technical in the market. Now Automation Anywhere and UiPath, you really don't know because they're not public and I think they need to get their house in order so they can IPO, so we'll see when they make it to public markets. I don't think that's an if, that I think they will IPO, but the fact that they haven't filed yet says they're not ready. Now why wouldn't you IPO if you are ready in this market despite the recent pullbacks? Okay, let's summarize. So listen, all you new investors out there that think stock picking is easy, look, any fool can make money in a market that goes up every day, but trees don't grow to the moon and there are bulls and bears and pigs, and pigs get slaughtered. And I can throw a dozen other cliches at you, but I am excited that you're learning. You maybe have made a few bucks playing the options game. It's not as easy as you might think. And I'm hoping that you're not trading on margin. But look, I think there are going to be some buying opportunities ahead, there always are, be patient. It's very hard, actually impossible, to time markets, and I'm a big fan of dollar-cost averaging. And young people, if you make less than $137,000 a year, load up on your Roth, it's a government gift that I wish I could have tapped when I was a newbie. And as always, please do your homework. Okay, that's it for today. Remember, these episodes, they're all available as podcasts, wherever you listen, so please subscribe. I publish weekly on wikibon.com and siliconangle.com, so check that out, and please do comment on my LinkedIn posts. Don't forget, check out etr.plus for all the survey action. Get in touch on Twitter, I'm @dvellante, or email me at david.vellante@siliconangle.com. This is Dave Vellante for theCUBE Insights powered by ETR. Thanks for watching, everyone. Be well, and we'll see you next time. (gentle upbeat music)

>> From theCUBE studios in Palo Alto in Boston, bringing you data-driven insights from theCUBE and ETR. This is breaking analysis with Dave Vellante. >> Robotic process automation solutions remain one of the most attractive investments for IT buyers. This is despite our overall 2020 IT spending forecast, which remained depressed at minus four to minus 5% for the year. Relative to previous surveys, we do see some softness in traditional RPA strongholds such as large financial services and big insurance and giant public and privates. But RPA relative to other IT investments remains at the top as a sector with the highest spending momentum ahead of machine learning, ahead of AI, ahead of containers, and ahead of cloud computing. Hello, everyone, this is Dave Vellante, and welcome to this week's Wikibon Cube Insights powered by ETR. In this breaking analysis, we want to update you on the latest RPA trends and share fresh ETR data with our community. So let's get right into it with a quick summary. Now, as I said, despite our pretty tepid IT spending outlook for the entire year in 2020, demand for RPA software continues to grow at a 60 to 70% clip. Now remember, RPA mimics human computer interactions, it uses software scripts or robots that execute human tasks in a runtime assembly of discrete steps. The practice first became popular for back office functions mostly, is unattended bots. The pandemic appears to be accelerating front office adoption and this is creating a bit of a schism between front and back office. Digital transformation initiatives in many ways, they're going to create the connective tissue between front and back of the house. Now competitive dynamics are heating up. The two emergent leaders Automation Anywhere and UiPath are separating from the pack. Large incumbent software vendors like Microsoft, IBM and SAP are entering the market and positioning RPA as a feature. Meanwhile, legacy business process automation players continue to focus on taking their install bases on a broader automation journey. However, all three of these constituents are on a collision course in our view, where deeper automation objective is kind of the North Star. Now there are two material changes to our previous scenario. First, we've expanded our thinking on the RPA TAM, and we're extending this toward a broader automation agenda more consistent with buyer goals. In other words, the TAM is much larger than we initially thought, and we'll explain why. Second, we no longer see this as a winner take all or even winner take most market. In this segment, we'll look deeper into the leaders and share some new data. In particular, well, it appeared in our previous analysis that UiPath was running the table in the market, we see a much more textured, competitive dynamic setting up. And the data suggests that other players including Automation Anywhere, and even some of the larger incumbents will challenge UiPath for leadership in this space. Now, as with many developing software markets, the ultimate leader is not crystal clear at this point. Let's talk about the effects of the pandemic. A conventional wisdom really suggests and by the way, we would agree that the automation mandate has accelerated by several years due to Coronavirus. It's three points here. One is that yes, COVID has put digital transformation on the front burner of executives priority lists. Second is automation isn't trivial. So there's a real difference between wanting and achieving. And third, we believe there's another driver for the automation mandate, which will survive a vaccine or herd immunity, and that is the productivity gap. So this chart here underscores that point and was brought to our attention by a friend of ours, Dave Moschella. Specifically, we've seen a noticeable decline in productivity in the US and EU, since remember the personal productivity boom from the personal computer? The PC and the internet brought forth those trends in Moschella's premise and we agree is that in order to solve the grand challenges of the 2020s and beyond automation is going to be necessary. Think about climate change, global competitiveness, aging populations and infrastructure, massive deficits, mass immigration, sustainable food sources, healthcare. These are all going to require huge injections of automation into the system to solve problems associated with these areas. Human labor just isn't the answer. So this in part has influenced our expanded thinking on the total available market. The diagram we're showing here updates our expectations on the TAM for RPA. The first takeaway is that we're envisioning a market for business automation well beyond software bots, which are represented really in the first two layers, that back office and front office divide, if you will. And we see that coming together in the third layer, those two are really going to happen through digital transformation initiatives. But we also envision a massive market for automated decision making, and very deep business integration where systems are communicating to each other, system to system, machine to machine, and also making real time decisions on behalf of humans. Sometimes we call that systems of agency. Now, I won't go deep into this TAM, as it's a bit academic, but suffice it to say this is an enormous market comprising many layers of the tech stack and services stacks. And this represents a serious opportunities for multiple players, both vendors and buyers. Okay, let's get a little bit more tactical and look at the spending data, the latest spending data, from the ETR survey. The chart we're showing here is one of our favorites. And it compares leading RPA vendors on two dimensions. The y-axis is net score or spending momentum. It's a simple metric, that for this last survey asked buyers are you spending more or less in the second half of the year than you had originally planned. Net score is derived by subtracting the lesses from the mores, and is really shown in the upper right of this chart. You can see that in the green highlights. Note that the total N in the survey is around 1200. And you can see that the number of responses for each vendor is shown in the upper right in that gray area. We eliminated any RPA vendor that didn't get at least 25 mentions in responses in the survey. And you can see that Automation Anywhere and UiPath have essentially traded positions on the vertical axis. Indicating that Automation Anywhere customers expect greater spending momentum with the company than UiPath customers for the second half of this year, than they did in the first half. UiPath at 62% net score is still very, very high but this marks the first time since our reporting that AA, has taken the lead ahead of UiPath in net score. And the small arrow show the general direction of their respective momentum over the last couple of surveys, and I'll discuss this later on. Now on this chart, you can also see Blue Prism and Pegasystems and, while they're significantly below Automation Anywhere and UiPath, these are very respectable net scores for more mature players like these. But I don't really consider them RPA specialists, and especially Pega. I mean, they have an automation play well beyond RPA and have built really an awesome business and in many ways are benefiting from the hype being created by the newbies. I have to say I'm in awe of the business that Alan Trefler and his team have built. We're talking about a billion dollar company here. They've got a valuation, over 9 billion, the stock's near an all time high, and they never took a dime of outside capital prior to their IPO, which is just unreal. Oh, yeah, one more thing I want to call your attention to. There's Microsoft with power automate, and kind of crashing the party with a 1.0 product that is making some noise in the marketplace. Now on the y-axis, you can see UiPath has the market share lead, but I want to remind you what this is. Market shares I mentioned of pervasiveness in the data set in the survey and is, calculated by dividing the number of mentions for a vendor in a sector by the total mentions in the survey. So you can see that UiPath has the share of voice lead, but it's still under 10% of the total survey base. So lots of room for this market to grow. But I want to make an important note here because UiPath has historically been a collection of point products, whereas Automation Anywhere their go to market typically involves going to larger accounts and selling this sort of Mongo and digital transformation project to the line of business. As I said earlier, these two and other companies are on a collision course because that is the big prize. UiPath has restructured its product and pricing strategy, done some acquisitions to go after this. But it stands to reason that UiPath has a bigger presence in the ETR data set as measured by market share. So it makes sense that Automation Anywhere, their number one net score position, it makes it even more impressive. Now the other nuance is that ETR tends to be somewhat weighted to the IT side of the house. And although it most certainly picks up line of business spending, there's a bias in the data toward IT. So that means RPA is most likely even stronger in the context of spending initiatives, and it's already number one relative to other sectors. So that's pretty impressive. Now let's look at how net score has changed over time. This chart shows the change in net score or spending momentum for Automation Anywhere, UiPath, Blue Prism and Pegasystems over the last three survey periods. You see last October, this past April, the height of the lockdown in the US and the most recent July survey. And here you see that Automation Anywhere is accelerating and taking the lead over UiPath. And is the only one in the chart growing net score. Again, UiPath remains elevated despite the relative decline from previous surveys. The other two, I have to caution you again, the Pegasystems for example, and they're killing it in the market. The stock is up nearly 40% year to date, it's over 60% in the last 12 months. So because they're not so RPA only focused and they really are not an IT play per se, the survey data has to be digested in that context. But you do see them coming down from elevated levels last October. Now here's a time series view of that net score. This chart really what it does is it just extends the timeframe and shows more granularity of survey data back to January 2018. So we're talking about 11, quarterly survey data points and snapshots here. This really underscores the power of the ETR platform, because you can stretch the data over time. And you'll see Automation Anywhere overtakes UiPath for the first time since we started capturing the segment. UiPath along with the other shows a noticeable decline in net score in this survey, except for Microsoft, who's, you know, they're just showing up, as I said, they're elbowing their way into the marketplace. Now let's take that same sort of time series view but let's flip to market share. And this next chart shows that other favorite metric that we use all the time as market share or pervasiveness in the dataset, over a time series. Now remember, this is really mentions as a percent of the total. It's not an indication of spending amount, but it's a data point and we pay attention to this. And you can see how UiPath broke away from the pack. They did this back in October 2018, and that coincides with their big push on things like, events, and training, they really have done a good job of building a presence and awareness in the market. I've superimposed on the chart the upper left corner for context that shows net scores in the green and shared N in the gray. It's sorted off of that shared N. This refers to the number of mentions in the dataset for each vendor out of the 1192 total responses. So some of these have small Ns. So I'm not going to put too much emphasis on this except, that UiPath escalation is notable and hopefully I've explain that sufficiently. Okay, let's wrap. So we talked about the automation mandate, and the COVID wrecking ball effect. But it's more than that. The productivity pressures on the US and EU in particular make it exceedingly difficult to just throw labor at the world's grand problems. So this has opened up an enormous opportunity for technology companies and practitioners to drive automation. You know, we said this during the initial in the early days of the big data era. In fact, Peter Goldmacher, had this discussion with us on theCUBE really in the early part of last decade, that those companies that can implement automation at the time he was talking about big data are going to be the big big winners. So it's not just the tech players. Now of course, as we've seen, many of the big tech companies are benefiting enormously from the mega automation trend, but the broader set of industries has massive, massive upside. Now what this sets up is a multi-dimensional competitive environment. We have Automation Anywhere and UiPath battling it out to achieve escape velocity. Automation Anywhere just brought in Chris Riley to run go to market. So you know they're serious. He's a player who understands complex enterprise selling. And now you have UiPath, they're hiring engineers as fast as they can. And the other dimension is a classic battle of best of breed specialists like Automation Anywhere and UiPath, up against the bundlers, selling RPA as a feature of their services. Microsoft, IBM, SAP, etc, all see automation is a huge opportunity and everyone's going to hop on the bandwagon because this is worth hundreds of billions of dollars, at least. Okay. Thanks for watching this episode of theCUBE Insights powered by ETR. Remember all these episodes are available as podcasts wherever you listen. Check it out, we've also put up an archive of all the breaking analysis segments on wikibon.com. There's a link on the menu bar right at the top of the homepage that has all 46 episodes that we've done since inception. I write weekly on that wikibon.com platform and I also publish on siliconangle.com where you can find all the relevant news. And don't forget to check out etr.plus for all the survey data and analysis. Go there and sign up for a trial of the software. It's awesome. Okay, this is Dave Vellante, be well, and we'll see you next time. (bright music)

>> Automation is being viewed as increasingly strategic by business executives. A prominent example can be seen in the form of robotic process automation, RPA. Despite the pandemic, RPA continues to show strong growth in the market, and that's really confirmed in the survey data from our partner, ETR. Hi everybody, this is Dave Vellante, and welcome to this special presentation from the CUBE team with support from UI Path. Earlier this month UI Path had a big launch event and today we're going to provide some perspective and analysis of the market. We're also going to interview some of the UI Path execs to get a better understanding of the market trends and the competitive environment. Let me lay out the program. It's going to start with my independent, unsponsored breaking analysis segment. This is pure editorial. In this first video we're going to discuss some of the RPA challenges and early issues that customers had with RPA. And we're going to update you on the market, we're going to look at the latest ETR spending data. We have some comments on the competition. And we're particularly going to focus on of course, UI path, but also automation anywhere, Blue Prism, and we even have some thoughts on Pega Systems. Now you can go to wikibond.com and read the full analysis of that breaking analysis. It's also on siliconangle.com if you really want more details on this data. After that, we have four UI Path execs that we interview including the CMO, Bobby Patrick, Ted Cumert their new head of products. He's going to talk to us about software development and platform architectures. And then we also interview Terek Madcore about RPA in the cloud. And then we're going to close with Brandon Knott. And I'm going to push Brandon a little bit on how much of that UI Path vision, i/e a robot for every person. How much of that is real, how much of that is marketing hype, and what can we expect going forward in terms of that adoption? So thanks for watching everybody. I hope you enjoy the program.

from the cube studios in Palo Alto in Boston connecting with thought leaders all around the world this is a cube conversation we've been reporting that the Kovan pandemic has created a bifurcated IT spending outlook legacy on print on-prem infrastructure in traditional software licensing models they're giving away two approaches that enable more flexibility in business agility automation initiatives that reduce human labor labor that's not value add has really been gaining traction for the past 18 months the pandemic has only accelerated to focus on such efforts and robotic process automation or RPA along with machine intelligence have been the beneficiaries relative to other segments of the IT stack welcome to this week's wiki Vaughn cube insights powered by ETR my name is Dave Volante and in this breaking analysis we're gonna update you on the latest demand picture for the red-hot RP a sector will also focus on two main areas today first we're gonna review the basics of the RP a space for those that may not be as familiar with the market next we'll share with you the spending data and outlook in the RT ARPA space from ETR and we're really dig into the kovat impact on this market segment and take a look at the competitive outlook we're gonna pay particular attention to the leaders in this space and then we're gonna wrap up so let me start with kind of the RPI basics if you're not familiar with our PA here's what you really need to know happy hour PA gained traction by taking software robots and pointing them at existing applications to mimic human behavior and automate repeatable and well understood processes keyboard behavior that is now a challenge with early RPA implementations is that most customers chose to point these bots at legacy backend office systems now that the open emails and fill out forms and the like so that's great because it digitizes processes around legacy systems awesome ROI but the problem is that these bots will they interact with a user interface of that application and many of these apps they really don't have an API so any change in data or the interface breaks the automation down now more recently automations are interacting to apps through api's that makes them less brittle but of course you know the quality of api's as you well know will vary so enter your machine intelligence into the equation there's been a lot of discussion around the intersection of our PA and AI and that's allowed organizations to automate more processes that do so in a way that takes an augmentation approach using things like natural language processing or speech recognition and machine learning to iterate and improve automations and you know this trend holds a lot of promise and is a lot of talk about it in the marketplace particularly in the form of really trying to understand which processes to automate and where the best ROI can be achieved for organization but it's important to note it's really still early days with this AI intersection nonetheless investors you know they're ahead of the game they've they've poured money into this space as we've been reporting now for you know well over a year or two uipath an automation anywhere have raised close to two billion dollars and have been growing very very rapidly we're gonna talk more about that existing players like blue prism they've actually benefited from the automation tailwind and other you know process business process players take for example like Pegasus Toombs I mean they started in the early 80s they've added our PA to their platform as have many others by the way including Microsoft who has barely been trying to crack into this market for a while in fact Microsoft just bought a small company called soft emotive and to really try to shore up its RP a game but you know just a quick aside in our view Microsoft is their well behind the leaders it's gonna take years for them to get where the leaders are today yeah but it's Microsoft so you don't want to ignore them now the big buzzword here is hyper automation evidently it's a torrent a coin term coined by Gartner and uipath has picked up on this in a big way and so is automation anywhere now those both those companies are in hyper growth so it plays more established companies for example pega yeah they look at the term differently you know of course their vision is Rp a is a small portion of their their their vision these established firms they want to incorporate their business process automation z' that have been built over decades into a systems view of the organization using existing platforms the upstarts of course they want to build from new platforms what's really happening in the marketplace and like in many situations is this emergence of a hybrid you know quasi-equilibrium here we saw this in mainframes who certainly you know saw it in middleware enterprise data warehouses and we've seen it in the cloud you know where most companies don't just throw away the investments that they've made in legacy systems now they're stable they're operationalized and rather what they do is they overlay the more modern technologies and they kind of create an abstraction layer of their business that incorporates the old and the new but the growth is much much higher in the new as we know it and that leads me to the TAM the total available market let's look at the RPM you know we think the TAM expansion opportunity is pretty substantial we put this chart together awhile back that really underscores that the progression of our PA from you know simple BOTS automating back-office functions to really infusing automations in virtually all applications you know if you expand the definition beyond our PA software into the broader automation opportunities the other thing about it this this could be a much much larger than depicted here maybe well over a hundred billion dollar Tam as a I powered automation becomes fundamental to every organization in their operating model anyway it's a big opportunity and the data suggests that it's growing rapidly so let's turn to the data let's look at the spending and bring ETR into the equation so which technologies are showing new adoptions in tech on balance the tech sector has done pretty well despite this pandemic at the time of this video the Nasdaq Composite is up about a point and a half year to date and as we know from previous surveys that heading into 2020 there was a pullback in a narrowing of new technology adoptions as organizations began to operationalize their digital initiatives and place bets this chart shows new adoptions across three survey dates the gray is April last year the blue is January which is pre-pandemic really and the survey of more than 1,200 IT buyers is really the latest one which is the April so this survey took place at the height of the US lockdown and you can see look at all PA it's got 22% new adoptions what does that mean it means that 22% of the customers in the survey we're planning our PA spend there that are planning for our PA spend are planning new adoptions now that's a figure that says hi as machine learning and artificial intelligence and of course as we said these two technologies are increasingly playing a role together so our PA adoptions more than containers more than videoconferencing which has had this tailwind from work from home and more than cloud more than mobile device management so it's really one of the hottest sectors in terms of new adoptions now let's look at some of the players in our PA and try to really better understand their positions here's a chart that uses the two primary met work net metrics that we've been sharing over the past year net score or spending momentum is on the y-axis and market share which is a measure of pervasiveness in the data set is on the x-axis the chart plots are PA players in the et our data set and you can see uipath in automate anyway our the to market leaders they show both spending momentum and market awareness then you see blue prism and peg is in there and the rest of the pack and I'll say this about pegye systems I recently spoke to their CEO Alan trifler he's an amazing self-made billionaire he's got a great business you know peg that really doesn't see you know itself anyway as an RPA play and I don't either our PA is really a small part of their story but they're in the data set and certainly automation related so it's what's showing but it's a bit of an oranges and tangerines comparison now notice in the upper right of this chart you can see that the net scores are in the green shade and there's a little bit of red in there but remember net score is a simple metric sort of like Net Promoter Score in PS it subtracts customer spending less from those spending more and that's the difference and you can see very very strong net scores for both uipath in automation anywhere and I'm gonna discuss that more in a moment but there's lots of green in the chart and even pega or as I said it's really not an RPA specialist they've got a solid net score now let's look at a time series of this net score in the spending momentum what we do here is this chart takes the three leaders uipath automation anywhere and blue prism and it plots their net scores over time goes all the way back to the January 18 survey now let me make a couple of points here uipath in automation anywhere 70% plus net scores is very impressive and amongst the highest in the data set even though you see some of the Lawson momentum in the UI path line and the convergence with automation anywhere they're both very very strong and you can see in the upper right you can see the shared end which is an indicator of the presence of the company in the data set how many response is out of the 1200 plus so you might say well wait a minute you I passed the I had they had layoffs last fall and automation anywhere they more recently just recently had layoffs how can they show such strength well I make a few points first fast-growing companies like this that have raised you know nearly a billion dollars each they've got investors to serve and they're going to course-correct when they feel like there's some slack in the system yet to me it's not a sign of fundamental trouble second both of these companies are going to continue to invest heavily on research and development uipath has 60 openings on its website mostly in engineering automation anywhere they only have nine openings but I would expect both companies to up their engineering hiring especially given the Microsoft acquisition today third remember this is not an indicator of the amount of money spent in absolute dollars rather it looks at spending momentum of the doll in dollar terms as well if you were to cut the data by larger companies let's say the Fortune 1000 where the average contract values are higher you'd see that you I pass a net score jumps to 77% automation anywhere would drop into the 60s and blue prison would stay about the same where it is today today so let's look for example in the global 2000 so we'll expand that notion of a fortune 1000 let's go to the global 2000 where there's more of an end slice and you can see the picture changes from the overall data sample this chart shows the net scores in the global 2000 where the ends are more than 25 responses across all the three surveys gray as last April blue was January yellow is April 2020 and you can see the year-on-year decline and the modest step down during the the Colvin lockdown which again surveyed in April but still very elevated net scores for uipath and automation anywhere and respectable for the other so the point is Co vyd has not really crushed the RPA market I mean if anything is witnessed by the new adoptions it's maybe it's certainly better off than most IT sectors now let's dig into the net scores of the two leaders a little bit more uipath and automation anywhere remember net scores of very important metric and I want to spend the moment explaining how we use it you see this wheel chart this red green gray it really shows how the net score method is applied now we've taken the UI path example from the April survey net score works by asking buyers relative to last year are you adopting new that's the 28% are you increasing spend by 6 percent or greater that's 51 percent are you expecting flat spending that's 15 percent or a decrease in spend of 6 percent or more or finally are you replacing the vendor checking them out so look at this you can see for UI path added up 79 percent of respondents expect to increase spending in 2020 relative to 2019 and again remember this survey was taken at the height of the kovat lockdown let me show you the data for automation anywhere same exact methodology 72 percent of automation anywhere a customer's plan to spend more only 1 percent plan to spend less with zero replacements so very strong fundamentals as it relates to spending momentum for both UI path and automation anywhere now how is presents or what we call market share in the data set changing on a year-on-year basis well this is the last data point that I want to show and it relates to that metric of market share which again is the measure of pervasiveness it's calculated by dividing the number of mentions of a vendor in a sector by the total mentions of that sector in this case RP a and this chart shows the year-on-year change in customer growth comparing market share from the April 20 survey with that from the April 19 data and you can see the yellow line at 11% is the sector average uipath has the fastest growth automation anywhere is growing faster than the market average and blue prism is below the average now this looks back to last year and it'll be interesting to see how this picture changes with the next survey based on what we're seeing with the next net scores which is a forward-looking metric all right let's wrap so we're seeing that the bifurcated market is high that the automation trend generally is real and that the RP a drill down specifically shows us an example in action we think that kovat 919 not hit these numbers would actually be higher by maybe as much as 10% but in the near near to mid term we would expect a pretty fast return to normal patterns of demand if I put normal and air quotes for our PA in fact you know we don't expect a real v-shaped recovery across the board but our PA is you know one of those areas where we actually may see such a rebound the pandemic really underscores the need to accelerate digital transformations our PA we think is going to be a central player in that movie along with AI the cloud all right we have to leave it there for now so remember these episodes they're all available as podcasts just all you got to do is search breaking analysis podcasts please subscribe to the series would appreciate that and check out ETR dot plus for all the data I also publish a full report every week on wiki bound comm tons of data there as well and Silicon angle comm has all the news and I published there alright this is Dave Volante thanks for watching this episode of the cube insights powered by ETR we'll see you next time [Music]

>>This is Dave Volante, and I want to tell you about an event we're holding this week with support from you. I path. As you know, we've been reporting on the automation space and the impact of Cove it. Earlier this month, you I path had a big launch, and we're able to get some of their execs to come on the Cube and talk about the future of automation. So on Thursday, May 21st 12 noon, Eastern time, we're running a program on the cube dot net. It's going to start with my independent breaking analysis, talking about some of the r p a challenges and updating you on the market. And we'll be looking at the latest CTR spending data at commenting on the competition with a particular focus on your path, but also automation anywhere, Blue Prism and even some thoughts on Pegasystems. We then have four U i path exact execs that we've interviewed, including CMO, Bobby Patrick, Ted Kumar, who's their new head of products talking about software architectures. We also interviewed Erik Madkour about R p a in the cloud, and we close with Brendan not well, I'm gonna ask to defend you I pass vision of a robot for every person. Very ambitious. And I'm gonna push Brendan a little bit on how much? Israel versus marketing hype. So go the cube dot net. Look for the U I path event that you can add to your calendar. Thanks, everybody, and we'll see you there.

>> Announcer: Live, from Orlando Florida, it's theCUBE! Covering Microsoft Ignite, brought to you by Cohesity. >> Welcome back, everyone, to theCUBE's live coverage of Microsoft Ignite. We are here at the Orange County Convention Center in the middle of the show floor, one of Microsoft's biggest shows, 26,000 people from around the globe. I'm your host Rebecca Knight along with my cohost, Stu Miniman, and we're joined by a third cohost, but he is also the Principal CTO Advisor, Keith Townsend. Thank you so much for coming on theCUBE. >> Thanks for having me, guys. >> It's a pleasure to have you. So, you come to a lot of these shows, I'm interested in your thoughts and impressions of Microsoft Ignite 2019. >> So, I'm part of the V community, which is a pretty close knit community, very focused on one part of the whole IT pitch, which is infrastructure. It is amazing coming to a show like Microsoft Ignite where the breadth of content is so wide, and the conversation, so wide and, surprisingly, deep. This is been one of my, I think, favorite shows of the year so far. >> Talk about the content, you're absolutely right, we had so many product announcements, it felt like an Amazon Show, we were saying, because of the number of products that were being announced and demoed here. 87 pages from the Comms Team, so, does this feel like a different era for the company itself? >> You know what, Microsoft announced, I think UiPath has some crazy over billion dollar evaluation. Microsoft wildly announced that they're entering RPA, Robotic Process Automation, they're challenging SAP when it comes to data warehousing and data analytics. And then, they just happen to announce that, oh, yeah, by the way, we're making Kubernetes easier. Then, there's still the Teams announcements. The amount of content and the areas that Microsoft is going in, just to highlight it, Azure Arc replicates data, one of the jobs is replicate data, and they said they'll replicate data to AWS Cloud. Microsoft, great position. >> Keith, as you're alluding to, Microsoft has a large portfolio of applications. If you think business productivity, you're probably using Microsoft. Everything from Teams, that we're hearing a bunch about, to, of course, O365 is the solution that gave everybody the green light to go SaaS-ify as many of your applications as you will, and Arc, very much from what I've seen so far, takes that application specific view of Kubernetes, we know Kubernetes is supposed to help be that platform to build on top of, but, I've tended to hear a very infrastructure view of here's what you'll build in your data center and the compute network and storage that you need to think about, here's the IAS that it might live on. But, when you talk about Arc, they're talking about it's about SQL and databases and how those pieces go together. And this is a view for Microsoft, but, if you want to go do open shift, if you want to do spring with a Pivotal VMware or Tanzu with there, Microsoft, of course, is saying that that's your option but would love your view point so far as your Arc and where Microsoft sits in this broader ecosystem today. >> So, I'm coming off fresh a conversation with David Armor, the PM for Microsoft Arc for Azure stack, and their attention to detail is amazing. You know, I'm not the world's biggest Kubernetes fan, for some of the very reasons that you mentioned. It's too much attention to the details in order to provide a Kubernetes experience that developers will accept. Microsoft, a big developer focused company, so when you look at Arc and what it does for Kubernetes on Azure stack, it makes the provisioning, the storage networking, et cetera, invisible so that you can take Microsoft's cognitive services, deploy them on Azure stack, and just consume those services. Microsoft, again, when you look at it from a different angle, when you're not taking the infrastructure angle added and you're doing the whiz bang features of making sure that Kubernetes can do X, Y, and Z, more importantly, can I use it to build applications is Microsoft's approach, and you can see it in the Arc and how they approach it in the Azure stack. >> Absolutely, and you're talking, right now, about this app development for everyone. We had Satya Nadella, yesterday, talking about democratizing computing, anyone can do it, AI for all, too. What are the most exciting new tools that you're seeing, and what are the kinds of conversations that you're having with developers around these new tools? >> So, I just talked to a professional services architect, or an architect for professional services, one of the global big four's, and he was telling me that they've deployed RPA to the entire organization of over 100,000 consultants and end users, so that they can build robots to power the next phase of productivity increases within their organization. No rules, no constraints, just here's the tool, go out and do. Microsoft talked about 2.5 million non-technology focused developers, it is, I think, a key theory of the CTO advisors that their future of enterprise IT is that companies, like Microsoft, then, will push AI, machine learning, these robotic automation processes down to the end users so that they're creating the content. There's just not enough of Keiths and Stus in the world to do this by hand. So, great vision. >> And Keith, you brought up the SIs, and you've worked for some of the big SIs in the past. How is Microsoft doing out there? We've seen with Cloud and AI, the biggest guys, rolling out armies of people to help integrate this, to help customers adopt this. Cloud and AI, Cloud, specifically, was supposed to be cheap and easy and we know it's neither of those two things. So, if you look at Cloud and AI, how is Microsoft to be a partner with and I would love a little compare and contrast to the Vmwares and AWSs of the world. >> So, if you look, let's take a look at VMware, I'm a big VMware fan, but one of the things that if you're a VMware VAR, or you're in VMware period, if you go outside of your lane, that infrastructure lane, you go to have conversations, the technology is there. You can use VMware, vRealize, automation suites, the CloudHealth, the Heptio, they have the individual components, technology components, but they absolutely need the Pivotals of the world to go in and add credence to their talking points around these products because they don't have that reputation to come in and have the conversation with the CMOs or the application developers. Microsoft on the other hand, developers, developers, developers. And then, they also have Microsoft Dynamics, we ran into a customer, who was desperately just searching out, she came to the conference expecting to see Dynamic experts, and I'm sure she found them. Microsoft has the ecosystem to support their vision. >> One of the things we've been talking about on theCUBE this week, at Ignite, is that it seems like a different kind of Microsoft, it seems like one that is, not only embracing customers who choose Microsoft in addition to other companies, but championing them and supporting them and saying, "whatever you want, "we're meeting you where you are." Have you found that, and is that striking to you, based on the Microsoft of Yore, which was more proprietary about where it's customers went for it's technology. >> So, we mainly cover enterprise tech, but, I think today or tomorrow, the Surface Pro X gets released, which is an arm based device, that runs full version of Windows. I was in one of the Lightning talks, Microsoft Lightning talk, on a completely different topic, and at the bottom, they had a logo for UiPath, Automate Anywhere and Blue Prism, three of the, I think, leaders in a space of RPA. And they were talking about the integrations that Microsoft has gone on with these companies, and their own power automate was not even mentioned as part of that session. So, Microsoft is meeting customers where they're at. I think the AWS, the example for Arc, replicating to AWS, customers have AWS, they're the biggest Cloud provider, Microsoft isn't closing their eyes to it. >> Yeah, well, we noticed the biggest thing repeated over and over again in the key note yesterday was trust. And while the Microsoft of old days was you're going to buy my OS, and my apps, and everything Microsoft on top of it, and we're going to maximize our licensing, the Microsoft today is those choices. We talked to UiPath yesterday, they're not worried about their relationship with Microsoft. When I talked to the ecosystem of partners here, they trust that they can work with Microsoft. Compare that to some others out there in the industry, and the big Hyperscalers, there might not be as much trust. What I'm curious about, from you Keith, is do customers see that? Do they understand that today is a different Microsoft than the one that we grew up with? >> So, some of the conversation on Twitter, just remotely, people not here, this is the best Ignite I've ever seen. People who are not even here, this is from the keynote yesterday. I think customers are starting to embrace Microsoft and trust Microsoft. I think there's still some hold out, some people who remember this sting of forced to use Microsoft management suites on products that probably didn't integrate well with those suites. But, as that sting starts to subside, you have to look at it objectively and say, "Microsoft is a different company." This is not a show I think I would have enjoyed three years ago. >> What's driving it though? This is something we're seeing in the technology industry at large, this understanding of customers needing different things and wanting best in breed. But are there other elements that we're not privy to, would you say? >> I think it's the democratization of technology via Cloud. I talked to a just regular, small business owner. She runs a trucking business, she uses her computer as a tool, it was a five year old device, she really didn't care, did the job that she needed to do. We talked a business challenge that she was having, and I described Cloud in general and she never even considered Cloud as a thing. She just said, "you know what, "I want this solution and if it's Microsoft AWS or Google that provides it, or even VM Works." She didn't care, she wanted to buy it. And that relationship wasn't a traditional ISV, MSP, these are, I think, business owners and business leaders are being approached with, whether it's ISVs or consultants and business advisors, and they're being advised to adopt these technologies, regardless of the source. There's no loyalty anymore to just Microsoft. Remember when you bled blue? Whether it was IBM blue or Microsoft blue. I read an unfortunate article on one of the big ERP providers had a 100 million dollar failure, and the company just decided, you know what, we're not going to go with just one provider anymore, we're just going to go with best of breed across these business processes. >> So what does that mean for the competitive landscape? I mean, we talked a lot about this. Does Microsoft really have a shot at taking on AWS or will it always be number two. Well, Microsoft won a 10 billion dollar JEDI contract from the US. I wrote about this in my newsletter last week, is that one billion dollars over 10 years will make Microsoft Azure better. You can't help but to have that type of discipline that comes from a contract like that impact Azure. Will they catch up with Microsoft, I mean, with AWS? AWS is still a very, very small fraction of the overall IT landscape. That business owner I talked to never heard of AWS. 50,000 person conference in a month, she only knew Amazon as a book seller. So, to say that Microsoft won't catch up with AWS is a very, very short view of the landscape. >> We're just scratching the surface when it comes to Cloud. >> Keith, what other thing have you seen at the show jumping out at you? You said you might not have enjoyed the show three years ago so what are some of things that make this show enjoyable? I know for me, it is a different community than the V community out there, there are a lot of overlaps, a lot of friendly faces that I know here, but community, diversity, inclusion, super strong here, would love your comment on that and any other takeaways. >> So, someone pointed out to me that I didn't notice and I'm happy I didn't notice it, was that there is a lot of women at this show, and I looked up and I'm like wow, the lines for men's bathroom aren't as long. And that's a nice thing because I don't think it's just facilities. It is a massively diverse show, not just from a ethnicity and gender perspective, but from career levels and age groups. There's Millennials all the way up to Boomers, and the conversations, the conversations that I've had, I'm really surprised with. Straight on business conversations, to deep and dirty, you know what these are the Cloud providers Azure provides for Kubernetes. That's super geeky, and that conversation's all around best. Infrastructure, application, business, and then even social, I had that social conversation about diversity, and for a change, I wasn't the one that brought up the conversation. >> You know, that's a really good point, and even just even here, I mean, I know you made the schedule, which I salute you, because we are having many more women, many more people of color on our stage, which is reflective of who's here. >> And it's easier at this show than it is at most, as opposed to please find me some more underrepresented or diversity there. And luckily, there is a lot of options at a show like this. >> Yeah, the pool just hasn't, and other shows, the pool just isn't very big. Normally, I can usually say at a show, I'm the tall black guy with the beard, and hey, I'm the tall black guy with the beard, and this show is not that case. >> No, there's more, there's more, exactly. >> Well, Keith Townsend, thank you so much for coming on, a pleasure having you. >> Thank you, Rebecca. >> I'm Rebecca Knight for Stu Miniman and Keith Townsend, you are watching theCUBE. (techno music)

>> From the SiliconANGLE Media office in Boston, Massachusetts, it's theCUBE. Now, here's your host, Dave Vellante. (dramatic music) >> Hi, everyone, welcome to this week's Breaking Analysis. It's Friday, October 18th, and this is theCUBE Insights, powered by ETR. Today, ETR had its conference call, its webcast. It was in a quiet period, and it dropped this tome. I have spent the last several hours going through this dataset. It's just unbelievable. It's the fresh data from the October survey, and I'm going to share just some highlights with you. I wish I had a couple hours to go through all this stuff, but I'm going to just pull out some of the key points. Spending is flattening. We've talked about this in previous discussions with you. But, things are still healthy. We're just reverting back to pre 2018 levels and, obviously, keeping a very close eye on the spending data and the sectors. There is some uncertainty heading into Q four. It's not only tariffs, you know. 2020's an election year, so that causes some uncertainty and some concerns for people. But, the big theme from ETR is there's less experimentation going on. The last several years have been ones where we're pushing out digital initiatives, and there was a lot of experimentation, a lot of redundancy. So, I'm going to talk more about that. I'm going to focus on a couple of sectors. I'm going to share with you there's the overall sector analysis. Then, I'm going to focus in on Microsoft and AWS and talk a little bit about the cloud. Then, I'm going to give some other highlights and, particularly, around enterprise software. The other thing I'll say is that the folks from ETR are going to be in the Bay Area on October 28th through the 30th, and I would encourage you to spend some time with them. If you want to meet them, just, you know, contact me @dvellante on Twitter or David.Vellante@siliconangle.com. I have no dog in this fight. I get no money from these guys. We're just partners and friends, but I love their data. And, they've given me access to it, and it's great because I can share it with you, our community. So, let's get right into it. Alex, if you just bring up the first slide, what I want to show is the ETR pulse check survey demographics, so every quarter, ETR does these surveys. They've got a dataset comprising 4500 members, panelists if you will, that they survey each quarter. In this survey, 1336 responded, representing 457 billion in spending power, and you can see from this slide, you know, it's got a nice mix of large companies. Very heavily weighted toward North America, but you're talking about, you know, 12% AMIA out of 1300. Certainly substantial and statistically significant to get some trends overseas. You can see across all industries. And then, job titles, a lot of C level executives, VPs, architects, people who know what the spending climate looks like, so I really like the mix of data. Let me make some overall comments, and, Alex, the next slide sort of gives some snapshot here. The big theme is that there's a compression in tech spending, as they say. It's very tough to compare to compare to 2018, which was just a phenomenal year. I mentioned the tariffs. It was an election year. Election years bring uncertainty. Uncertainty brings conservatism, so that's something, obviously, that's weighing, I think, on buyers' minds. And, I'll give you some anecdotal comments in a moment that will underscore that. There's less redundancy in spending. This has been a theme of ETR's for quite some time now. The last few years have been a try everything type of mode. Digital initiatives were launched, let's say, starting in 2016. ETR called this, I love this, Tom DelVecchio, the CEO of ETR, called it a giant IT bake off where you were looking at, okay, cloud versus on prem or SaaS versus conventional models, new databases versus legacy databases, legacy storage versus sort of modern storage stacks. So, you had this big bake off going on. And, what's happening now is you're seeing less experimentation so less adoption of new technologies, and replacements are on the rise. So, people are making their bets. They're saying, "Okay, these technologies "are the ones we're going to bet on, "these emerging disruptive technologies." So, they're narrowing their scope of emerging technologies, and they're saying, "Okay, now, "we're going to replace the legacy stuff." So, you're seeing these new stacks emerging. I mentioned some others before, but things like cloud native versus legacy waterfall approaches. And, these new stacks are hitting both legacy and disruptive companies for the reasons that I mentioned before because we're replacing legacy, but at the same time, we're narrowing the scope of the new stuff. This is not necessarily good for the disruptors. Downturns, sometimes, are good for legacy because they're perceived as a safer bet. So, what I want to do, right now, is share with you some of the anecdotals from the survey, and I'll just, you know, call out some things. By the way, the first thing I would note is, you know, ETR did sort of an analysis of frequency of terms. Cloud, cost, replacing, change, moving, consolidation, migration, and contract were the big ones that stood out. But, let me just call a couple of the anecdotals. When they do these surveys, they'll ask open ended questions, and so these kind of give you a good idea as to how people are thinking. "We're projecting a hold based on impacts from tariffs. "Situation could change if tariff relief is reached. "We're really concerned about EU." Another one, "Shift to SaaS is accelerating "and driving TCO down. "Investing in 2019, we're implementing "and retiring old technologies in 2020. "There's an active effort to consolidate "the number of security vendor solutions. "We're doing more Microsoft." Let's see, "We have moved "to a completely outsourced infrastructure model, "so no longer purchasing storage," interesting. "In general, we're trying to reduce spending "based on current market conditions." So, people, again, are concerned. Storage, as a category, is way down. "We're moving from Teradata to AWS and a data lake." I'll make some comments, as well, later on about EDW and Snowflake in particular, who, you know, remains very healthy. "We're moving our data to G Suite and AWS. "We're migrating our SaaS offering to elastic. "We're sunsetting Cognos," which, of course, is owned by IBM. "Talend, we decided to drop after evaluating. "Tableau, we've decided to not integrate anymore," even though Tableau is, actually, looking very strong subsequent to the sales force acquisition. So, there's some comments there that people, again, are replacing and they're narrowing some of their focus on spending. All right, Alex, bring up the next slide. I want to share with you the sector momentum. So, we've talked about this methodology of net score. Every time ETR does one of these pulse surveys, they ask, "Are you spending more or are you spending less? "Or, are you spending the same?" And then, essentially, they subtract the spending less from the spending more, and the spending more included new adoptions. The spending less includes replacements. And, that comes out with a net score, and that net score is an indicator of momentum. And, what you can see here is, the momentum I've highlighted in red, is container orchestration, the container platforms, machine learning, AI, automation, big theme. We were just at the UiPath conference, huge theme on automation. And, of course, robotic process automation, RPA. Cloud computing remains very strong. This dotted red line that I put in there, that's at the, you know, 30%, 35% level. You kind of want to be above that line to really show momentum. Anything below that line is either holding serve, holding steady, but well below that line, when you start getting into the low 20s and the teens, is a red zone. That's a danger zone. You could see data warehouse software is kind of on that cusp. and I'm not, you know, a huge fan of the sector in general, but I love Snowflake and what they're doing and the share gains that are going on there. So, when you're below that red line, it's a game of share gain. Storage, same thing we've talked about. The overall storage sector is down. It's being pressured by cloud, as that anectdotal suggested. It's also being pressured by the fact that so much flash has been injected into the data center over the last couple of years. That given headroom for buyers. They don't need as much storage, so overall, the sector is soft. But then, you see companies, like Pure, continuing to gain share, so they're actually quite strong in this quarter survey. So, you could see some various sectors here. IT consulting and outsourced IT not looking strong, data center consolidation. By the way, you saw, in IBM's recent earnings, Jim Kavanaugh pointed to their outsourcing business as a real drag, you know. Some of these other sectors, you could see, actually, PC laptop, this is obviously a big impact for Dell and HP, you know, kind of holding steady. Actually, better than storage, so, you know, for that large of a segment, not necessarily such a bad thing. Okay, now, what I want to do, I want to shift focus and make some comments on Microsoft, specifically, and AWS. So, here's just some high level points on this slide on Microsoft. The N out of that total was 1200, so very large proportion of the survey is weighted toward Microsoft. So, a good observation space for Microsoft. Extremely positive spending outlook for this company. There's a lot of ways to get to Microsoft. You want cloud, there's Azure, you know. Visualization, you got Power BI. Collaboration, there's Teams. Of course, email and calendaring is Office 365. You need hiring data? Well, we just bought LinkedIn. CRM, ERP, there's Microsoft Dynamics. So, Microsoft is a lot of roads, to spend with Microsoft. Windows is not the future of Microsoft. Satya Nadella and company have done a great job of sort of getting out of that dogma and really expanding their TAM. You're seeing acceleration from Microsoft across all key sectors, cloud, apps, containers, MI, or machine intelligence, AI and ML, analytics, infrastructure software, data warehousing, servers, GitHub is strong, collaboration, as I mentioned. So, really, across the board, this portfolio of offerings powered by the scale of Azure is very strong. Microsoft has great velocity in the cloud, and it's a key bellwether. Now, the next slide, what it does is compares the cloud computing big three in the US, Azure, AWS, and GCP, Google Cloud Platform. This is, again, net score. This is infrastructure as a service, and so you can see here the yellow is Microsoft, that darker line is AWS, and GCP is that blue line down below. All three are actually showing great strength in the spending data. Azure has more momentum than AWS, so it's growing faster. We've seen this for a while, but I want to make a point here that didn't come up on the ETR call. But, AWS is probably two and a half to three times larger in infrastructure as a service than is Microsoft Azure, so remember, AWS has a $35 billion at least run rate business in infrastructure as a service. And, as I say, it's two and a half to three times, at least, larger than Microsoft, which is probably a run rate of, let's call it, 10 to 12 billion, okay. So, it's quite amazing that AWS is holding at that 66 to now dropping to 63% net score given that it's so large. And, of course, way behind is GCP, much smaller share. In fact, I think, probably, Alibaba has surpassed GCP in terms of overall market share. So, at any rate, you could see all three, strong momentum. The cloud continues its march. I'll make some comments on that a little bit later. But, Azure has really strong momentum. Let's talk, next slide if you will, Alex, about AWS. Smaller sample size, 731 out of the total, which is not surprising, right. Microsoft's been around a lot longer and plays in a lot more sectors. ETR has a positive to neutral outlook on AWS. Now, you have to be careful here because, remember, what ETR is doing is they're looking at the spending momentum and comparing that to consensus estimates, okay. So, ETR's business is helping, largely, Wall Street, you know, buy side analysts make bets, and so it's not only about how much money they make or what kind of momentum they have in aggregate. It's about how they're doing relative to expectation, something that I explained on the last Breaking Analysis. Spending on AWS continues to be very robust. They've got that flywheel effect. Make no mistake that this positive to neutral outlook is relative to expectations. Relative to overall market, AWS is, you know, kicking butt. Cloud, analytics, big data, data warehousing, containers, machine intelligence, even virtualization. AWS is growing and gaining share. My view, AWS will continue to outperform the marketplace for quite some time now, and it's gaining share from legacy players. Who's it hurting? You're seeing the companies within AWS's sort of sphere that are getting impacted by AWS. Oracle, IBM, SAP, you know, cloud Arrow, which we mentioned last time is at all time lows, Teradata. These accounts, inside of AWS respondents, are losing share. Now, who's gaining share? Snowflake is on a tear. Mongo is very strong. Microsoft, interestingly, remains strong in AWS. In fact, AWS runs a lot of Microsoft workloads. That's, you know, fairly well known. But, again, Snowflake, very strong inside of AWS accounts. There's no indication that, despite AWS's emphasis on database and, of course, data warehouse, that Snowflake's being impacted by that. The reverse, Snowflake is taking advantage of cloud momentum. The only real negative you can say about AWS is that Microsoft is accelerating faster than AWS, so that might upset Andy Jassy. But, he'll point out, I guess, what I pointed out before, that they're much larger. Take a look at AWS on this next slide. The net score across all AWS sectors, the ones I mentioned. And, this is the growth in Fortune 500, so you can see, very steady in the large accounts. That's that blue line, you know, dipped in the October 18 survey, but look at how strong it is, holding 67% in Fortune 500 accounts. And then, you can see, the yellow line is the market share. AWS continues to gain share in those large accounts when you weight that out in terms of spending. That's why I say AWS is going to continue to do very well in this overall market. So, just some, you know, comments on cloud. As I said, it continues to march, it continues to really be the watchword, the fundamental operating model. Microsoft, very strong, expanding its TAM everywhere, I mean, affecting, potentially, Slack, Box, Dropbox, New Relic, Splunk, IBM, and Security, Elastic. So, Microsoft, very strong here. AWS continues to grow, not as strong as '18, but much stronger than its peers, very well positioned in database and artificial intelligence. And so, not a lot of softness in AWS. I mentioned on one of the previous Breaking Analysis, Kubernetes', actually, container's a little soft, so we always keep an eye on that one. And, Google, again, struggling to make gains in cloud. One of the comments I made before is that the long term surveys for Google looked positive, but that's not showing up yet in the near term market shares. All right, Alex, if you want to bring up the next slide, I want to make some quick comments before I close, on enterprise software. There was a big workday scare this week. They kind of guided that their core HR business was not going to be as robust as it had been previously, so this pulled back all the SaaS vendors. And, you know, the stock got crushed, Salesforce got hit, ServiceNow got hit, Splunk got hit. But, I tell you, you look at the data in this massive dataset, ServiceNow remains strong, Salesforce looks, very slight deceleration, but very sound, especially in the Fortune 100 in that GPP, the giant public and private companies that I talked about on an earlier call. That's one of the best indicators of strength. Tableau, actually, very strong, especially in large accounts, so Salesforce seems to be doing a good job of integrating there. Splunk, (mumbles) coming up shortly, I think this month. Securities, the category is very strong, lifting all ships. Splunk looks really good. Despite some of the possible competition from Microsoft, there's no indication that Splunk is slowing. There's some anecdotal issues about pricing that I talked about before, but I think Splunk is really dealing with those. UiPath's another company. We were just out there this past week at the UiPath Forward conference. UiPath, in this dataset, when you take out some of the smaller respondents, smaller number of respondents, UiPath has one of the highest net scores in the entire sample. UiPath is on a tear. I talked to dozens of customers this week. Very strong momentum, and then moving into, got new areas, and I'll be focusing on the RPA sector a little later on. But, automation, in general, really has some tailwinds in the marketplace. And, you know, the other comment I'll make about RPA is a downturn actually could help RPA vendors, who, by the way, all the RPA vendors look strong. Automation Anywhere, UiPath, I mentioned, Blue Prism, you know, even some of the legacy companies like Pega look, actually, very strong. A downturn in the economy could help some of the RPA vendors because would be looking to do more with less, and automation, you know, could be something that they're looking toward. Snowflake I mentioned, again, they continue their tear. A very strong share in expansion. Slightly lower than previous quarters in terms of the spending momentum, but the previous quarters were off the charts. So, also very strong in large companies. All right, so let me wrap. So, buyers are planning for a slowdown. I mean, there's no doubt about that. It's something that we have to pay very close attention to, and I think the marker expects that. And, I think, you know, it's okay. There's less spaghetti against the wall, we're going to try everything, and that's having a moderating effect on spending, as is the less redundancy. People were running systems in parallel. As they say, they're placing bets, now, on both disruptive tech and on legacy tech, so they're replacing both in some cases. Or, they're not investing in some of the disruptive stuff because they're narrowing their investments in disruptive technologies, and they're also replacing some legacy. We're clearly seeing new adoptions down, according to ETR, and replacements up, and that's going to affect both legacy and disruptive vendors. So, caution is the watchword, but, overall, the market remains healthy. Okay, so thanks for watching. This is Dave Vellante for CUBE Insights, powered by ETR. Thanks for watching this Breaking Analysis. We'll see you next time. (dramatic music)

>>Live from Las Vegas. It's the cube covering UI path forward Americas 2019. Brought to you by UI path. >>We're back. You're watching the cube, the leader in live tech coverage. We go out to the events. This has been a great event. UI path forward three, the third North American event, and this is day two. We're just wrapping up. Brandon nod is here as a senior vice president with UI path and Kadar. Danny, who's the vice president of global accounts at UI path. So you guys got a store? >>Yeah, yeah, yeah, we do. Britta, what's the story you guys, one was a customer and customer that is to first customer. Um, so three years ago, something like that when you iPod, we just started out with a global expansion. We'd got our seed funding round in 2015 we started expanding and building our global sales team when he's 16. I joined in the UK, responsible globally for the banking financial services industry. And one, one fine day, I get a communication, an email from a prospective customer that, Hey, I want to talk to you about your platform. And it was a Brandon over here. Brandon, do you want to tell it? Tell them what a, how you found out about your iPad. >>Yeah, you bet. I was interviewing a couple of partners and looking at the different platforms and found that yeah, you, I've had really had what I was looking for, which is the openness of the platform, the ability to do training online and start my journey kind of on my terms. And so when I reached out to it was very much how can you help me get started? I've already made the business case internally, I'm ready to go. What year was this? 2016 and it's interesting, >>Daniel Donnez last night and his keynote said, you know, we really appreciate you guys who joined us in 2016 cause you know, the product didn't have all the features that we wanted. You know, it wasn't fully baked. This was my interpretation. That's right. But, but I, but I was saying earlier in the cube, the right move, that UI path made as you bet on simplicity. And he said, okay, let's get to market fast. Yeah. Simple. And that. And you said on your terms, what do you mean by that? >>So one of the things that I love about UI path is early on there was a principle of openness. Let people download the software. Don't be afraid, don't tease people, and then say, come to our site and we'll give you a call. Right? They said, come to our site, download, try it yourself. Here's what there's free training. And as UI path has grown, that principle is, is still very much precedent. You can go online right now and download, take free courses online. So what I wanted as a customer at that time was the ability to see it for myself. I wanted to make it real before I've made the investment. That was our experience. When Bobby Patrick first started, I said, you iPad today? He goes, go to the download a >>copy of our software, start building automations. I'm like, huh, yeah to it. And then go to automation anywhere, which by the way is the sponsor of ours. We love, we're an arms dealer. We love everybody. You know, go to blue prism, get their software too. So we tried, but we couldn't, you know, it was called the reseller will do pro what's your need? We just want to play with it, you know, so, so that's what you mean by bad on your terms and so yeah, that, that's worked pretty well for you guys, hasn't it? has and uh, you know, when we started off, right, community has always been a pillar within, within UI paths, you know, kind of strategy to to make sure that RPA is available to everyone. We call it democratization of, of automation and hence, you know, availability of the community edition. >>Uh, we go to the universities, students are able to download and use it for free and now we've tied up with certain universities to expand the education system with uh, getting, um, you know, when graduates pass out they come out ready knowing you want found RPA. Yeah, we had a, the college of William and Mary on and Tom Clancy, they were talking about that. Now I did my little review of the predictions in the morning. Guys predictions. He said that the students that come out of college, you're gonna force RPA on their companies. Most college kids don't know what RPA is. I got hit, I said it's gonna take a couple of cycles here, but, but so, okay, so run. Why did you join UI path? How did that all, you know, what drove you to say, okay, this is it. I'm going to have instead of applying the technology to make my existing company better, I'm gonna. >>So I ran operations for a mortgage company and we had already automated everything that we could using the classic tools and we are winning awards. And it was, you know, people were looking at the work that we are doing and they were impressed, but I still couldn't get past a certain point in my automations. So bringing in UI path allowed me to continue that journey to keep automating. And after a while, the more that I was working with you, I path weird, uh, I was a guest of, of them at conferences, speaking with guy Kirkwood and any number of folks. I looked at the culture of the company and thought this is a place that I want to be. And I looked at the roadmap and where the product was going and what I was able to do with it as a customer. And I thought, I want to help other people do this. I want to help them on their journey, get to this next level of automation that they're currently there. They're being kept at. >>Yeah, well a lot of people hop on the bandwagon. I saw folks from AWS, you know, have joined a gentlemen I know from Google, let's join them in these early leading companies and correct. So how are you guys spending your time these days? Special >> as I, my, my title suggests, you know, I'm responsible for the global account portfolio and I'm spending most of my time with our customers trying to help them on their automation journey. So these are some of the largest >>global customers, uh, big insurance companies, uh, automobile industry, uh, you know, Titans in that industry and they've all been our customers now for the last two years, in three years with a plan to kind of change the way they, uh, they run their business right. And RPA and you wipe out basically the automation platform that we have now with our new release come out as well, is giving these customers and end Duan a transformation engine. So it is our responsibility now to make them, uh, you know, more knowledgeable on how to apply that technology and get them successful with their plans for a, you know, transformation and automation of their business processes. Right. >>How are you spending your time, bro? I'm in product and in my focus is attended automation. So classically people are implementing unintended automation. This, this was the first big wave of RPA was really robots just working on a server somewhere. You don't, you don't interact with them. They just do their thing 24 hours a day. Now there's a huge push into attended automation, which is having a, a robot on your computer and the two of you working together, collaborating in real time throughout your day. So we're looking to save time to take out the the wasteful and small processes that nobody wants to do as well as creating an entirely new opportunities for value based on what the two of you can do together. How are you guys thinking about the way in which a user or worker interacts with that? That bot? Yeah, I think it's, it's more like a dance and and less like a task manager, right? >>So you might think in classic automation, you know, click a button, go do this thing, click a button, go do that thing that the automation is happening when you want it to. The way that our platform has written, the robot can listen to what you're doing. It can monitor for when you click on a specific button or for when you move files to a folder. So think about it less like a conscious effort to, to guide the robot and more as a collaborative effort where, where the robot is seeing what you're doing and taking action to help you and do things on your behalf and then letting you know when they're done. So it's the paradigm is changing for work and when you have a robot on your computer, it's going to open up a new way of doing your, your daily content. And the enabler there is what machine learning machine intelligence. >>It's a combination of things. So think about machine learning and AI as just one tool that that robot has to use both CR as well. You know, we did a demo earlier this week where we took receipts, moved him to a folder, the robot sees that you've moved receipts into a folder, can bounce it off and end point that and break apart those receipts using OCR, load that all into Excel and help you with your expense report. So think about things like this, you, things you need to do. You do what you would normally do, put receipts in a folder and the robot takes care of the rest. What, what things can, um, humans do that machines can't? Yeah, the ability to make on the fly judgment for complex cognitive tasks is very, very hard to replicate in, in AI right now because typically models are built on a set of specific information. >>We build our, our receipt and our invoice model off a ton of receipts and invoices. Therefore the robot can make quick work of those receipts way, way faster than we can, but present an unstructured problem or an open ended problem in an AI model might really struggle. Whereas a human can instantly make a judgment on that. So we want computers to do that. Those, those compiled activities and with the AI models that make sense for what they're doing and want humans to be thinking at higher levels, at creative levels, higher cognitive, cognitive and decision making levels. So this is as Daniel and others had mentioned, elevating the humanity when you think about it, >>but you definitely see some of your customers are certainly talking about this. This is robots taking action systems of agencies. Some people call it on behalf of the human and having to essentially make certain decisions. But you're saying those decisions are well understood and safe essentially. >>Absolutely. When you deploy a robot you don't, you don't just kind of hope for the best. Right? You have a very specific use case and you've coated the robot for that use case. I love it when when people say, you know, our compliance team is worried about the robots going wild or you know, we can have it gone the system, but he can't do anything that you haven't consciously told it to do, haven't written it to do. So it turns out it's actually even more compliant because it can throw off logs and a paper trail is as complex as you want it. So if I were a compliance officer, I would say get robots in immediately because I want more visibility into what's being done. >>So where do you see your customers going? So our customers say few. As Brandon was saying earlier, you know, customers started with this unattended robots first because everyone was trying to get an efficiency in their back office. We got a Y and that that is actually the core foundation for what comes next, which is the attended automation, the robot for every person vision that we have, we have fought for the, for the entire global customer community of ours. I mean the number of use cases where a human agent would with a robot. Now with having a robot on every desktop, I mean simple things like expense reports, time sheets or even simple things like downloading emails and reports on a daily basis. You don't need to engage with multiple systems. As a, as a human agent, you can get the robot to go ahead and do that for you. And as Brandon was saying, you know, you have much better control with the robot doing it. Then a human being who has a mind who could potentially, you know, cause certain security or compliance related issues because a human agent could go easily off track, do something different. Where as the robot has a certain set of parameters within which they work. >>Well guys, we've got to wrap, but so I'm going to ask each of you, give us the bumper sticker on UI path forward three a. When the trucks are pulling away from the Bellagio, what's the bumper sticker? Safe running. Try and keep up. >>Yeah, go, go big. Go big and go big now. >>Yeah, go bigger or go home. It's kind of seems to be the theme here. Well guys, thanks very much for. Congratulations on all the success you guys got a lot of work to do still for sure and best of luck. Thank you very much. Very welcome and thank you for watching everybody. It's a wrap from a UI path forward. You watching the cube, go to siliconangle.com check out all the news. We've got a bunch of in depth coverage of this show, RPA in general. We have five shows this week, so check that out and of course go to the cube.net to see what will be next week. Another big week. October has become the new may. So thank you for watching everyone. This is Dave Volante for the cube. Thanks guys. Great job today. We'll see you next time.

from the silicon angle media office in Boston Massachusetts it's the queue now here's your host David on tape hi everybody welcome to the special edition of the cube insights powered by ETR over the past several weeks we've been running breaking analysis on various market segments and today we're gonna talk about the robotic process automation market the spending data from ETR really shows that that market is poised for 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 the cube automation anywhere and uipath both sponsor the cube we 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 and Gartner data it's around one and a half to 1.7 billion dollars this year and it's growing at over 60 percent per year Gartner calls it the fastest growing software sub segment that they tracked garden just put out a Magic Quadrant on this space which was you know 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 line of business users and it very popular in environments like finance and service roles and and back office areas where they're a repetitive common tasks that people frankly hate and we're going to give you some feedback from from customers there are a number of upstarts in the space uipath automation anywhere blue prism these these companies have attracted a massive influx of venture capital particularly uipath an automation anywhere over a billion and a half dollars in the last couple of years there monster valuations take those three companies their valuations are up over ten billion dollars and growing uipath for example several months ago announced that it had more than 200 million dollars in annual recurring revenue they were just at eight million dollars two years ago so you're seeing just this 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 to see what Jeanne 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 them my slides I've had for years teaching that classes 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 you know airplane engines you hope they're at least 7 Sigma you know those type of things but business processes 3 5 3 2 but now I get to change that because with our PA I can make them Six Sigma very cheap very cheaply because I can pull them in I got my bought it comes over pulls the information and there's no double king there's no miss keys its accuracy 100% accuracy this is a perfect example of how companies are applying robotic process automation to 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 our PA there 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 is 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 that built this great taxonomy and we've been partnering with ETR to share with you some of that insights and 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 N 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 pega systems 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 gonna spend less in the second half the gray is we're flat the dark green is we're gonna increase spending in the lime green is where 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% next score ironically that's the identical next school 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 there are sort of different markets and different levels of maturity sort of around in the same net score so two very hot companies and you can see going down the list automation anywhere 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 disk array market and some of the legacy disk array companies some of the enterprise data warehouse companies you'll see sometimes negative scores now on the right-hand side and 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 leave or in the case of the bright green add but the number of counts 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% repair systems but these I remind you were still significantly statistically significant enough to at least get indications so you can see again your UI path 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 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 the 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 a thousand 1068 from this past survey so you can see uipath at that 81% next score of net score very high but 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% Nets so this space is is new and it's in it's very hot I say it's new and then it's been around for a while but it's really starting to take off and then you can see see Pegasus Thames you're lower than these other companies but still very very strong at 44% now we'll tell you the folks at Wycombe on the the analyst side of our house have gone out they've done some research they maybe it was about 18 months ago they they downloaded the UI paths Community Edition they tried to do the same for automation anywhere in blue prison they tried to get access to the software so they could apply it and you know 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 you know some simple tasks they couldn't get the automation anywhere in blue president you had to go to resellers and it was sort of this complicated you know setup so that was sort of a red flag that we put up but but the UI paths you know claims that their stuff was easy to use some of their users that we've talked to you know talked about it in the context of low code and so we've we've clarified some of that we don't have as much data on automation anywhere in blue prism although we've covered automation anywheres events customers you know seemed quite happy and and reporting strong business impacts don't have as much information at this time on blue prisms on blue prism we have attended some of the peg assistance 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 you know 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 easy to use so packet system seems to be look going after our PA in a much sort of broader context around process business process engineering so in summer you just want to say so the very fast-growing market there's a book 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 they say standalone robotic process automation players with integrated BPM players like Pegasus Thames it's important remember you're largely here automating existing procedures and tasks you know you're not doing a lot of necessarily re-engineering it so that's you know 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 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 in in machine learning and some folks have said well AI and RP a they have nothing to do with each other I will say this that that machine learning has been injected into the RP a space via computer vision and a good example is it recognized a button like a send button if you know you're sending out you know emails or pushing a certain button every day at the you can automate that process so computer vision is a key part of this and again it's something that certain RPF Enders 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 you know generally speaking you're seeing CFOs are hopping on to this they're seeing this is 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 s eyes coming into this we're talking about companies like Accenture IBM Deloitte PwC Ernie Young those guys are starting to you know go after the space and I've always said this about the the big sis they love to eat at the trough so with there's money there they find it and they go hard after it so thanks for watching everybody we're gonna continue to report on this space this is Dave Volante with cube insights powered by ETR we'll see you next time