>> Live from Miami Beach, Florida, it's theCUBE. Covering UiPathForward Americas. Brought to you by UiPath. >> Welcome back to Miami everybody. You're watching theCUBE, the leader in live tech coverage. We go out to events, we extract the signal from the noise. A lot of noise here but the signal's all around automation and robotic process automation. I'm Dave Vellante, he's Stu Miniman, my co-host. Guy Kirkwood's here he's the UiPath chief evangelist otherwise known as the chief injector of Kool-Aid. Welcome. (guests chuckling) And Craig LeClair, the Vice President at Forrester. Covers this market, wrote the seminal document on this space. Knows it inside out. Craig, great to see you again. >> Yeah, nice to see you again. It's great to be back at theCUBE. >> So let's start with the analyst perspective. Take us back to when you first discovered RPA, why you got excited about it, and what Forrester Research is all about in that space. >> Yeah, it's been a very a interesting ride. Most of these companies, at least that are the higher value ones in the category they've been around for a long time. They've been around for over a decade, and no one ever heard of them three years ago. So I had covered at Forrester, business process management and some of the business rules engines, and I've always been in process. I just got this sense that there was a way that companies could make progress and digital transformation and overcome the technical debt that they had. A lot of the progress has been tepid in digital transformation because it takes tremendous amount of time and tons of consultants to modernize that core system that really runs the company. So along comes this RPA technology that allows you to build human equivalence that patch up the inefficiencies without touching. I came in on American Airlines and the system that cut my ticket was designed in 1960. It's the same Sabre reservation system. That's the big obstacle that a lot of companies have been struggling to really take advantage of AI in general. A lot of the more moonshot and more sophisticated promises haven't been realized. RPA is a very practical form of automation that companies can get a handle on right now, and move the dial for digital transformation. >> So Guy we heard a vision set forth by Daniel this morning. Basically a chicken in every pot, I call it, a robot for every person. Now what Craig was just saying about essentially cutting the line on technical debt, do you have clear evidence of that in your customer base? Maybe you could give some examples. >> What we're really seeing is that as organizations have to deal with the stresses, what Leslie Wilcox professor at LSE describes as the stresses within organizations and particularly in environments where the demographics are changing. What we're seeing is that organizations have to automate. So the best example of that is in Japan where the Japanese population peaked in 2010. It's now falling as a whole, plus all the baby boomers, people of Craig's and my age are now retiring. So we're now in a position where they measure levels of dangerous overwork as being more that 106 hours a week. That isn't 106 hour a week in total, that's 106 hours a week in addition to the 60 hours a week the Japanese people normally work. And there is a word in Japanese, which is (speaking in foreign language), which means to work oneself to death. So there really is no choice. So what we're seeing happening in Japan will be replicated in Western Europe and certainly in the US over the next few years. So what's driving that is the rise of the ecosystems of technologies of which RPA and AI are part, and that's really what we're seeing within the market. >> Craig, sometimes these big waves particularly in infrastructure, you kind of saw it with virtualization and some other wonky techs, like data reduction. They could be a one-time step function, and not an ongoing business value creator. Where does RPA fit in there? How can organizations make sure that this is a continuous business value generator as opposed to a one time hit? >> Good question. >> Well, I like the concept of RPA as a platform that can lead to more intelligence and more integration with AI components. It allows companies to build an automation center or a center of excellence focused on automation. But the next thing they're going to do after building some simple robots that are doing repetitive tasks, is they're going to say "Oh well wouldn't it be better "if my employee could have a textual chat with a chatbot "that then was interacting with the digital worker "that I built with the bot." Or they're going to say "You know what? I really want to use that machine learning algorithm "for my underwriting process, but I can use these bots "to go out and collect all the data from the core systems "and elsewhere and from the web and feed the algorithms "so that I could make a better decision." So again it goes back to that backing off the moonshot approach that we've been talking about that AI has been taking because of the tremendous amount of money spent by the major players to lay out the promise of AI has really been a little dysfunctional in getting organizations' eye off the ball in terms of what could be done with slightly more intelligent automation. So RPA will be a flash in the pan unless it starts to embed these more learning-capable AI modules. But I think it has a very good chance of doing that particularly now with so much investment coming into the category right. >> Craig, it's really interesting. When I heard you describe that it reminds me of the home automation. The Cortanas and Alexas and consumer side where you're seeing this. You've got the consumer side where you can build skills yourself, you know teenagers people can do that. One of the challenges always on the business side is how do you get the momentum when you don't have the consumer side. How do those interact? >> It's the technical debt issue and it's just like the mobile peak in 2011. Consumers in their hands had much better mobility right away than businesses. It took businesses five, they're still not there in building a great mobile environment. So these Alexa in our kitchen snooping on our conversation and to some extent Netflix that observes our behavior. That's a light form of AI. There is a learning from that behavior that's updating an algorithm autonomously in Netflix to understand what you want to watch. There's no one with a spreadsheet back there right. So this has given us in a sense a false sense of progress with all of AI. The reality is business is just getting started. Business is nowhere with AI. RPA is an initial foray on that path. We're in Miami so I'll call it a gateway drug. >> In fact there's also an element that the Siris, the Cortanas, the Alexas, are very poor at understanding specific ontologies that are required for industry, and that's where the limitation is right now. We're working with an organization called Humly, they're focused on those ontologies for specific industries. So if the robot doesn't understand something, then you could say to the robot Okay sit that in the Wells account, if you're in a bank, and it understands that Wells in that case means Wells Fargo it doesn't mean a hole in the ground with water at the bottom or a town in Somerset in the UK, 'cause they're all wells. So it's getting that understanding correct. >> I wonder if you guys could comment on this. Stu and I were at Splunk earlier this week and they were talking up NLP and we were saying one of the problems is that NLP is sometimes not that great. And they made a comment that I thought was very interesting. They said frankly a lot of the stuff that we're ingesting is text and it's actually pretty good. I would imagine the same is true for RPA. Is that what you see? >> You were talking about that on stage. With regards to the text analytics. >> Yes. So RPA doesn't handle unstructured content the way that NLP does. So NLP can handle voice, it can handle text. For the bots to work in RPA today you have to have a layer of analytics that understands those documents, understands those emails and creates a nice clean file that the bots can then work with. But what's happening is the text analytics layer is slowly merging with the RPA bots platforms so it's going to be viewed as one solution. But it's more about categories of use cases that deal with forms and documents and emails rather than natural language, which is where it's at. >> So known business processes really is the starting point. >> Known business-- >> One example we've got live is an insurance company in South Africa called Hollard, and they've used a combination of Microsoft Cognitive Toolkit, plus IBM Watson and it's orchestrated doing NLP and orchestrated by UiPath. So that's dealing with utterly unstructured data. That's the 1.5 million emails that that organization gets in a year. They've managed to automate 98% of that, so it never sees a human. And their reduction in cost is 91% cost in reduction per transaction. And that's done by one of our implementation partners, a company called LarcAI down there. It's superb. >> Yeah, so text analytics is hard. Last several years we have that sentiment out of it, but if I understand it correctly Craig, you're saying if you apply it to a known process it actually could have outcomes that can save money. >> Yes, absolutely yes. >> As Guy was just saying. >> I think it's moving from that rules-based activity to more experience-based activity as more of these technologies become merged. >> Will the technology in your view advance to the point, because the known processes. okay, there's probably a lot of work to be done there, but today there's so many unknown processes. It's like this messy, unpredictable thing. Will machine intelligence combined with robotic process automation get to the point, and if so when, that we can actually be more flexible and adapt to some of these unknown processes or is that just decades off? >> No, no, I think we talk at Forrester about the concept of convergence. Meaning the convergence of the physical world and the digital world. So essentially digital's getting embedded in everything physical that we have right. Think of IoT applications and so forth. But essentially that data coming from those physical devices is unstructured data that the machine learning algorithms are going to make sense of, and make decisions about. So we're very close to seeing that in factory environments. We're seeing that in self-driving cars. The fleet managers that are now understanding where things are based on the signals coming from them. So there's a lot of opportunity that's right here on the horizon. >> Craig, a lot of the technologies you mentioned, we may have had a lot of the technical issues sorted out, but it's the people interactions some things like autonomous vehicles, there's government policies going to be one of the biggest inhibitors out there. When you look at the RPA space, what should workers how do they prepare for this? How do companies, make sure that they can embrace this and be better for it? >> That's a really tough and thoughtful question. The RPA category really attacks what we call the cubicle population. And there are we're estimating four million cubicles will be emptied out in five years by RPA technology specifically. That's how we built the market forecast 'cause each one of the digital workers replacing a cubicle worker will cost $11,000 or what. That's how we built up the market forecast. They're going to be automation deficits. It's not all going to be relocating people. We think that there's going to be a lot of disruption in the outsource community first. So companies are going to look at contractors. They're going to look at the BPO contract. Then they're going to look at their internal staff. Our numbers are pretty clear. We think they're going to be four million automation deficits in five years due to RPA technology specifically. Now there will be better jobs for those that are remaining. But I think it's a big change management issue. When you first talk about robots to employees you can tell them that their jobs are going to get better, they're going to be more human. They're going to have a much more exhilarating experience. And their response to you is, What they're thinking is, "Damn robot's going to take my job." That's what they're thinking. So you have to walk them up the mountain and really understand what their career path is and move them into this motion of adaptive and continual learning and what we call constructive ambition. Which is another whole subject. But there are employees that have a higher level of curiosity and are more willing to adapt to get on the other side of the digital divide. Yep. >> You mentioned the market. You guys did a market forecast. I've seen, read stats, a little over a billion today. I don't know if that's consistent with your numbers? >> Yeah that's about right. >> Is this a 10X market? When does it get to 10 billion? Is it five, seven, 10 years? >> So we go out five years and have it be close to three billion. I think the numbers I presented on stage were 3.2 billion in five years. Now that's just software licenses and it's not the services community that surround that. >> You'd probably triple it if you add in services. >> I think two to three times service license ratio. There's always an issue at this point in emerging markets. Some of the valuations that are there, that market three billion has to be a bit bigger than that in eight or nine years to justify those valuations. That's always the fascinating capital structure questions we create with these sorts of things. >> So you describe this sort of one for one replacement. I'm presuming there's other potential use cases, or maybe not, that you forecast. Is that right? >> Oh no for the cubicles? >> Yes, it's not just cubicle replacement in that three billion right? It's other uplifts. >> No there are use cases that help in factory automation, in supply chain, in guys carrying around clipboards in warehouses. There are a tremendous number of use cases, but the primary focus are back office workers that tend to be in cubicles and contact center employees who are always in cubicles. >> And then we'll see if the non-obvious ones emerge. >> I think ultimately what's going to happen is the number of people doing back office corporate functions, so that's both finance and accounting procurement, HR type roles and indeed the industry specific roles. So claims processing insurance will diminish over time. But I think what we're going to see is an increase in the number of people doing customer experience, because it's the customer intimacy that is really going to differentiate organizations going forward. >> The market's moving very fast. Reading your report, it's like you were saying yesterday's features are now table steaks. Everybody's watching everybody else. You heard Daniel today saying, "Hey our competitors are watching. "We're open they're going to steal from us so be it." The rising tide lifts all boats. What do you advise clients in terms of where they should start, how they should get started? Obviously pick some quick wins. But what do you tell people? >> I always same pretty much the same advice you give almost on any emerging technology. Start with a good solution provider that you trust. Focus on a proof of concept, POC and a pilot. Start small and grow incrementally, and walk people up the mountain as you do that. That's the solution. I also have this report I call The Rule of Fives, that there are certain tasks that are perfect for RPA and they should meet these three rules of five. A relatively small number of decisions, relatively small number of applications involved, and a relatively small number of clicks in the click stream. 500 clicks, five apps, five decisions. Look for those in high volume that have high transaction volume and you'll hit RPA goal. You'll be able to offset 2 1/2 to four FTE's for one bot. And if you follow those rules, follow the proof of concept, good solution partner everyone's winning. >> You have practical advice to get started and actually get to an outcome. Anything you'd add to that? >> In most organizations what they're now doing, is picking one, two, or three different technologies to actually play with to start. And that's a really good way. So we recommend that organizations pick three, four, five processes and do a hackathon and very quickly they work out which organizations they want to work with. It's not necessarily just the technology and in a lot of cases UiPath isn't the right answer. But that is a very good way for them to realize what they want to do and the speed with which they'll want to do it. >> Great, well guys thanks for coming on theCUBE, sharing your knowledge. >> Thank you. >> Pleasure. >> Appreciate your time. >> Thanks very much indeed. >> Alright keep it right there everybody. Stu and I will be back from UiPathForward Americas. This is theCUBE. Be right back. (upbeat music)

>> We wanted to compete against the last >> Announcer: Live from Boston, Massachusetts, it's theCUBE, covering Red Hat Summit 2017, brought to you by Red Hat. >> Welcome back to theCUBE's coverage of the Red Hat Summit. I'm your host Rebecca Knight along with my cohost, Stu Miniman. We are here today with Joe Fitzgerald. He is the Vice President of Management at Red Hat. Thanks so much for joining us, Joe. >> Thanks for having me. >> So, I want to talk to you about automating the enterprise. This is really right in your wheelhouse. You came out with a few new product announcements this morning. Tell us more about those. >> So, as all these technologies change, it really puts a lot of pressure on enterprising to try and figure out how to manage all this stuff. IF you think about the complexity and the rate of change, it's a lot harder to follow that around with management and security in automation. So we have this vision around enterprise automation, which I'm really excited to talk about. >> So tell us more. How does it help reduce the workload or at least automate the workload, maybe? >> Well, so automation, if you think of what's going on in other sectors like self-driving cars or home automation, what's happening is you have these silos of automation that are now being sort of composed into systems of automation. One of the challenges that enterprises have faced for years is they've got lots of tools, sometimes dozens of tools that each tool is good at automating one little thing. So it's kind of like your cruise control on your car or your nav system or something like that but they don't talk to each other. So what we announced to day is we have this vision, and it's going to take time for people to get there, but they need to move towards enterprise automation. And there's some fundamentally new technology over the past coupla years that we're leveraging called Ansible, which will allow us to automate across many domains and tie things together. >> Rebecca: So that's the vision. >> Right. >> How will it work? >> Well, we actually announced some products today that are huge delivery and part of that vision, which is we announced CloudForms 4.5, which has Ansible inside. Ansible is this incredibly popular open-source technology that's sort of taken the world by storm. It's a couple years old, but it's gotten this incredible open-source community adoption, which Red Hat is certainly familiar with. We acquired this company about a year and a half ago and under Red Hat's nurturing, because we're really good at open-source, this things has really exploded in terms of the interest in the community. At the same time, we're seeing enterprises now adopt it in incredible rates. So they're telling us, "Look, we want this technology. "And it can help us automate everything "from our network to our compute and our storage. "We can use it in clouds. "We can use it on our physical stuff. "We can automate some of our old things "which are dragging us down, "as well as some of these really cool differentiating "new applications they're trying to get out." >> Joe, the headline in the press release says that this is analytics-driven automation, so talk about the operational impact here. Do I need to get a data scientist on my team now to manage all my things? Where does this fit with what they're doing today and how do they take advantage of it? >> That's a great question. So the second product announcement that we made, it's around an offering we have called Red Hat Insights, and it's a predictive analytics capability. So if you think about Red Hat's experience, we have tens of thousands of customers worldwide. We've dealt with millions of cases, we've got really smart engineers working in all these different technologies. In collecting data from our customers, we use big data, machine learning to derive insights into what's going on. Now we can analyze systems for our customers and tell them what's wrong. As the name implies, it gives them insights into what's going on. They don't have to hire data scientists, we have really smart people. But by basically getting insights into those system, we could tell you, "Hey the system's not secure "or it has some performance problems." But you would have to then go make changes to fix it. With this announcement today, we've tied together Ansible technology around automation so that we can say, "Here's what you need to change. "Would you like us to change it?" And we then dynamically generate the changes necessary. >> Joe, this resonates for me so much. I lived back a dozen years ago, I worked in an interoperability lab for a large storage company that's a partner of yours and we were like, "Well, we have a little bit of data "about what the customer's doing, "we know exactly how stuff should be configured," but matching that patches and early on in the API cycle, trying to figure that out, make sure that we could remediate or hey, is there a security issue or some patch that they should know about? Getting that flow of information just didn't exist 10, 12 years ago. So, why now? How can we make it better? You know, what's the impact going to be for the customers? >> So a coupla things. First of all, there's new technology. So this Ansible technology I described is fundamentally different. We believe that that can help us across a lot of different domains to automate. I think the other thing is that automation tools have been very, very difficult for people to use, and you hear about continuous development, continuous integration. You probably haven't heard much about continuous management or continuous automation or continuous security. Those things need to be automated. If you're going to be changing at the rate businesses would like to change, you're going to need some really new tools to be able to automate those things at the speed of business. >> Absolutely. I think that the joke I've had is, "Hey, what version of AWS are you running on? "Or what version of Azure you're running on?" They take care of that. The enterprise, there's some stuff that they're going to do internal, there's some stuff that they're going to do in the public cloud, but they need to be able to get to that newer version. My friends that are in security are always like, "The biggest challenge is right. "I haven't gotten that latest update "or there's some vulnerability that I need to do "so I need to have more that CICD mentality "in some of the other spaces." >> If you think the rate of change right now between multi-clouds, containers, new processes like DevOps, I mean there's just an incredible amount of technology changing. And a lot of the tools enterprises have, some of them are 10, 15 years old. They didn't even have these things around when those tools were created so they can't really deal with the physics of these new environments and how to do it. Now you can get a tool from each vendor or each cloud or each platform to manage it, but now you're the person who's got this arsenal of tools with teams that have to learn 27 tools. And then, your security example is a great one. How do I know everything's secure? Do I go to each of those 27 teams and go, "How's the network? How's my storage? "How's my compute? How's the app? "Oh, and by the way, it changed at noon today, "are we good?" That's really complicated. >> So the benefit of automation is that it does free up people's time to do other things in their jobs. So do you see that we will see more innovation coming out of these teams when they aren't having to check the network, check the network, and make sure that the patch is working. How do you see this changing the way people do their jobs? >> We see two ends of the spectrum that people automate. They automate some of the traditional stuff they have, which puts drag on them from a resource and a cost point of view. So they can modernize and optimize their old stuff, automate that, now they can focus on their new services, and really focus on the automation of what's going to change their business and help them compete in this world. So by optimizing the old, they can take some of those resources and put it into the new business services. >> Joe, you said Ansible was acquired about 18 months ago, and the announcement you went through looked like it's really weaving into the fabric of a lot of other products. Can you walk us through a little bit about that, about where Ansible's gone and maybe a little bit of vision toward where else it will end up in the portfolio? >> Sure. So we've leveraged it in our management portfolio with the announcements you see today, but we're also leveraging it in the rest of Red Hat's portfolio. If you look at Red Hat OpenStack or OpenShift, our Red Hat virtualization, and in the future, our Red Hat Enterprise Linux, will all have bits and pieces of Ansible technology in, because those things help customers consume that, to install it, configure it, manage it, and automate at a higher level. So we're trying to make the best automated products we can deliver. And then on the management side, whether you're using Red Hat products or you're managing a hybrid environment with other products, which is a lot of the case, then you're going to have a set of tools that's going to be able to automate that even further. So we're being good citizens by providing products that are inherently manageable and automatable when you get them from us and then we're providing tools that allow you to manage these very complex, multi-cloud environments. >> One of the big things we are talking about is the workplace culture, and Jim Whitehurst has done such an incredible job of really creating this open culture at Red Hat. How does it play out on a microscale in terms of how do IT leaders and managers give their employees, their teams time to innovate as well as the opportunity to take risks and to try things? >> Well, it's interesting because open-source has sort of changed over the years from sort of a commodity play where I can get something cheaper because it's the open-source version of something, let's say Linux. Now we've gone to the other end of the spectrum, where a lot of the new innovations, in this case management, is happening in an open-source community. So businesses can go and try that technology without contacting a vendor. They can sample it, they can follow it, they can see the rate of adoption. Everything's done in the open so they can see how transparent things are going. And basically, they can leverage that technology. A lot of them have no choice. If they don't leverage open-source innovations, their competitors will and they're going to be, basically at a disadvantage from a technology stack or management tool, whether it's containers in OpenShift or running in different platforms or storage, they really need to leverage the open-source communities. So we're seeing mandates. Some companies that, years ago, were fearful of open-source are now making investments and coming up with company policies for how to contribute to open-source. And we're seeing a lot more open-source consumption. >> Is that driven out of fear, as you said, if we don't do it our competitors will? Or has there been a real shift in mindset? >> No, I think it's more carrot than stick. I think that they see the innovation, whether it's big data or artificial intelligence, in my area, in automation in management, that that's where a lot of the innovation is going. So if they want the best technology to be able to bring to bear on their business and their IT needs, they're going to look in open-source because that's where it's happening. >> Let's look into the future a little bit, and think about where we will be 5, 10 years from now. What are your predictions? >> Well, I think there's just a huge trend towards automation. You're going to see it, we're seeing it in the consumer life. You're going to see it in business life. So automation across all different areas. And I think as things become more instrumentable and automatable, think about internet of things where you're going to have hundreds of devices in your house, you would like them to talk to each other. You'd like your smoke detector to talk to your camera to talk to your phone to talk to your light switch, etc. Those are examples of automation that people are going to tie these things together to try and make systems of automation. You're seeing it around personal digital assistants, the Alexas and the Siris and the different systems like that. >> Rebecca: Cortanas. >> Self-driving cars, we've gone from not having any of them to there's a bunch of vendors that are all vying for that. I think you're going to see those kind of system-wide automation in a lot of different industries. >> Joe, Red Hat really isn't a services business, it's very much a subscription model, but how much do you have to help companies to fix their processes before they automate because we all know it's like I can't just say, "Oh, let's take my existing process and automate it." Because many times you don't want to automate what's not working well. You want to fix the process a little bit first and then automate it. How does Red Hat get involved or what partners do you use for that? >> That's a great question. So, a number of things. First of all, we have a lot of partners. Red Hat is a trusted advisor. So we can tell customers what's working, especially on the new technologies because we're building a lot of them. When it comes to containers or object storage or different things, we're building them. You know, Ansible, we have a lot of developers working and pushing that, so we're a trusted advisor. We also work with a lot of partners, system integrators, service providers, VARs, people who are steeped in the technology and in the case of the open-source technologies, they can get involved. They're contributing code. They're providing a training. In the case of management, we have SIs now providing automation practices. So if you said, "Gee, I need help automating my old stuff," you could get one of the big SIs to come in who's got, you know, in some cases, they've got a thousand people trained up in Ansible to come in and help you automate your processes, whether they're the old ones or the shiny, new ones you're trying to deploy. >> Joe, thanks so much for joining us. We really appreciate your time. >> Joe: Thanks for having me. Appreciate it. >> I'm Rebecca Knight, for Stu Miniman, we'll return with more of theCUBE's coverage of the Red Hat Summit after this. (electronic music)