>>Welcome everybody to the cubes live coverage of AWS reinvent 2021 we're in person for a real event to live stages, to remain studios, probably the industry's most important hybrid event of the year. Over 100 guests on the cube at AWS reinvent 2021. All right, so let's get right into it. This is 10 years of re-invent. We've been here for nine 20 plus thousand people. Everybody is coming from every industry, learning from each other, learning from AWS, learning from the things that you're observing as well. Of course, last year during the lockdown reinvent was purely virtual. Obviously the pandemic change the world for everyone. We went from thinking about the future to really just trying to make it through the next few weeks. Everybody was scrambling. What do we do? How do we pivot? How do we survive? Mode Wiley gloves, all a very bad thing, but it actually help accelerate customer journey to cloud. We saw a ton of digital innovation, >>Really looking to data and analytics and machine learning to find new opportunities, >>Some returned to the office, but now they have the tools to be able to stay at home and be more flexible. Pandemic has proven a lot of people that digital works here, but it's suppose, but it doesn't work. Every company has to be a data company. It's actually a mustache. And so is location data. They go >>Typically that data with some point we'll come back into the cloud into S3, but it will be used to do heavy duty training. And then those models get pushed back up to the us >>On the ground of all the grown under the drone. It instances where they either can't move or won't move, but their resources into the cloud. There's no conductivity latency comes up a lot in edge conversations. The value is the immediacy. Understanding that value specific to the moment it's being captured. You know, the edge, these are resorts. That's more DME they've done the full cloud in AWS regions. Cloud is something that's changing the world for a lot of customers. Obviously there's cost reasons. There's MNA reasons, remove complexity from users and make it really easy for new workloads to be added to the system. You can leverage all their AIML tools, IOT edge container, block chain, where the most complete portfolio of any cloud provider when it comes to storage and data virtually infinite resources. Now at your disposal. The last thing we wanted to be is a server huggers. We're ready to accelerate these transformations. We actually had an enterprise migrate one of the largest production applications in just four days. How do we secure our data? When we start having infrastructure in a variety of locations >>And decide who's allowed to see it, what they're allowed to see. And if you want to change your mind, you can do that instantly. And all access can be locked. >>Governance should be an enabler, not an inhibitor. You then have the modern apps. The modern apps to me are inherently iterative and inherently scalable and a amenable to change. It's not just the applications, analytics, it's AI, it's machine learning. Human interpretation is pretty talent, I would say. So that's where he comes in to augment the intelligence that we have in terms of extracting information. Now it's true infrastructure as code. If I'm spinning up servers, that means that's a low level primitive. That should be automated. Right? When we look at how we are to move up the stack and other areas, we just continue to listen to our customers. What is your business strategy and your business vision, and how do we design the technology solutions? Working back from that, using tools like insights in order to give customers advice. If you have found good, you have an idea. >>You know, the thing that he wants to disrupt, and we're letting people do that in different ways, giving control back to the end user, whether that's a consumer or an enterprise, they want to say I like it. And then I get the market is deciding I'm going to go with my software runs the best that's right. I get distribution that create value and runs fast. Our vision is eventually to have a community of about 10 to 20 million of the most extraordinary doers in the world. But really the goal is how can customers get value as quickly as possible for as low cost as possible. Point it out black and white. This is your cost. Now this is what your cost is going to be. And everybody's happy. There's a huge ecosystem of data tools out there. That's right, that you guys have as partners that want to snap together. >>So the trend is things are starting to snap together. We talk about the power of three, which is you bring a JSI partner, you bring an ISV partner, you bring AWS, you create that power of three and you take it to all customers. And you can start for a few pennies scale up, you know, into the petabytes and beyond. They have a better don't think that you wish you were 20. Again, with all this code out there, the next 15 years about opportunity transforming faster decision making your work now is to really drive the data cloud, get adoption of build that Supercloud we call it container first, cloud native first, and then make sure that everybody's kind of on that same ship running in the same direction. Five to 15% only of workloads have moved to the cloud. We're at the Dawn of the era of cloud. >>There's plenty of room for a lot of players. They can't hire enough developers. So this is the other thing that's happened during the pandemic. The war for talent is on talent is truly evenly split around the world. But what is not as opportunity in order to enable talent, do you need to educate them? Our skill builder platform provides 500 free training courses in 16 languages press 200 countries. We attract, we retain, we grow. The opportunity for innovation is limitless, and it's all about we're wrapping up four days of coverage. Two sets you go to the events and expect the signal from the noise. Stay tuned because there's always more on the cube. The global leader in live tech coverage. We'll see you next time.

(tubular bells chiming) >> Welcome back to theCUBE's coverage, AWS re:Invent 2021. I'm John Furrier your host of theCUBE. We're here, get all the action wall-to-wall coverage. The keynotes with the new CEO, Adam Leschi just happened. A lot of action wall-to-wall coverage for days, and we'd love cloud computing because it impacts business. We love all that, but when it impact sports, we love it even more because it can relate to it. You can see the two great guests here from the NHL Formula 1. We got David Lehanski the EVP of business development and innovation at the NHL, Rob Smedley, director of data systems at Formula 1. Gentlemen, thanks for joining me today in theCUBE. >> Thanks for having us. >> So obviously formula one we know is very data driven. Pun intended, NHL has a lot of action going on as well with innovation streaming, et cetera. Let's get into it. You're both Amazon customers, right? We'll start with you. Formula 1, big partnership with AWS. What's that about? how you guys look at this cloud as you guys go to the next level? Cause you're under a lot of pressure with the data, from the cars and standards and all that good stuff. What's up. >> What's going on? >> Well, I mean, you know, it started probably four or five years ago with the acquisition of Liberty media and formula 1, and there was a real drive towards data. There was a real drive towards, you know, unearthing all of the data that we've got, you know, formula 1, arguably probably generates the most data, this most sports data of any sport on the planet. You know, we have car telemetry data, timing data, metadata, image data, you know, we own all the video data, and the audio data of driver radio, tire data, weather data, you put all that together. You got to, you know, a real massive data. And it was just about trying to unearth that and, and engage the fans more. And that's where the partnership with AWS come from. >> And the competitiveness in formula one I know is really high. You got a lot of smart people on these teams looking for an edge. And I know it's like, it's a whole new world with data as things get exposed. So I got to ask you, what is your job? Are you there to like to corral the data that kind of set standards? What's your role? >> Well, my role is essentially, to use the data at central league level, if you want, for all the franchises, that's all 20 drivers, within the 10 teams to try to, you know, use that data in whatever way possible, whether it's the new car or whether it's the F1 insights powered by AWS to try to engage the fans more. You know, we've understood that data, is really important to tell the story of Formula 1. And it's really important to reach different demographics as well. The younger demographics, the young, the gen Zedders is, you know, those types of guys, it's really important to get to them, because you can condense and at one hour 45 race down to five minutes, right. Which is what they want. So this has been a really important step for us. And a really important part of that journey has been the enablement. >> And I can see the whole e-sports thing I could see after a race. Okay. Now the fans race amongst themselves, as the technology simulation gets better, only headroom there. So to speak. >> Yeah, yeah, absolutely. I mean, that's what we're, you know, that's probably the next generation of what we want to do with the data is we want to make it much more interactive. We're already giving, you know, through the insights and through, you know, the way that, we're trying to tell stories with the different data assets we're already trying to do that, in a much more proactive way of telling the story. The next level of that. is completely immersive, is interactive. And that's what we call the 21st drivers. So there's 20, formula 1 drivers. Right. But, we want to build systems using the data and gamification where you can embed yourself and immerse yourself in that, in the races, the 21st driver and race against the other guys on a Sunday afternoon. >> Awesome. Dave, let's get to the NHL National Hockey League. You guys are doing a lot of good stuff. You're the EVP of innovation and what's going on over there. How do you see the cloud helping you guys innovate. what's on your agenda and what's your role? >> Wow. I don't know if we have enough time, but at the highest level, you know, we're trying to expand and enhance the way we produce and present our game to the world. You know, our sport, we have some similarities, but there's a lot of differences based on the uniqueness of the sport. Statistics, hadn't really been a big part of the National Hockey League in the way people consume the game. I always say, you know, goaltenders have two statistics that have been used to evaluate them. And they were the same ones that were used to evaluate them back in 1917. So almost again a hundred years where it hasn't really evolved that much, but we think there's so much there that can really enrich and transform the game. So we're trying to partner with AWS and the best technology companies in the world to figure out how we can start to capture that data and turn it into meaningful content and experiences that allow fans to go a little bit deeper and a little bit broader. >> Yeah, I can see the data being used for also seeing what the NFL is doing a lot with the safety. Hits are getting harder and faster in the NHL. I mean, the collisions, the equipment, everyone is going faster. That's a big safety issue too. Isn't it? >> There is a safety component too. And it, look, that is one of the unique things about our sports. Both of us are speed involved. The speed though, for us, it's not just on the ice, it's also the pace of play, right? So when you have a stoppage, it's typically 10 or 15 seconds long. So there's not a lot of time to integrate data, to tell stories, to build and graphics and visualizations. So the first phase for us was to build the tracking system that could capture the positional, the positions of the puck and the players throughout the course of every game. And that's generating a massive amount of new data. Now we're trying to add video to that data so we could start to use it to create entirely new experiences. >> What are you guys thinking about from a fan experience as you look at the analytics. Are they interested in more like the, where the puck is, how fast people are going, what are some of the analytics sharing? >> So it depends, Right? So from a fan standpoint, you know, avid fans really want to, they want to go deep and they want understand controlled zone entries and like, you know, things that are really inherent to, you know, the core factors for determining outcome. Casual fans, they like just on knowing speed, right? How fast is the puck moving? How fast are the players moving. Before we had the system, we weren't able to produce it. Before we had AWS, you won't be able to produce that in real time and overlay it onto a game. So we could go even deeper when it comes to players and coaches and media partners, but the ability to build a solution that works in real time to give them the data and the video that they can use to tell those stories is born from AWS. >> And that brings up a great point. I'd love to ask both of you, if you can answer this question about the fan expectations. One of the big trends coming out of this re-invent this year as cloud is creating more capabilities, but the users and the consumers have new expectations. They want it on mobile, they want the highlights, they want everything. They want the data, there are data junkies. They want everything, cause they're immersing, into the experience with multiple touchpoints. TV, app. Whatever. >> I think that's right. And I think that it's up to, you know, as David's just saying that the two sports here with a lot of similarities and you can see that we're both on the same journey and that's because it's been driven in the end by the consumers, it's been driven by our customers. And, I think that now we're on, you know, what I would call the data flywheel, where there's a lot of inertia and it's just getting stronger and stronger and stronger. And this was, if we go back say three, four years when we started the partnership with AWS and we started to get really deep into the data and understand, you know, what the objectives of this whole exercise were, we always knew that there'd be a point where it started to build a lot of momentum and have a lot of inertia and that's, what's happening now. There's a real thirst for it, right? And it's not just, you know, even the naysayers, you know, even the people that kind of looked at it and went, well, why are you filling my screen with data exactly the same as what Dave says, you know, since you know, the goaltender since 1917, you've used the same two stats to evaluate that particular player. In formula 1 it's been exactly the same. So we started to introduce stuff which had been the same state as core for 70 years. And they say, well, what's all this about. Now, those people can't live without that. Right? It's become, a key part of the broadcast. >> And it creates new products, like things like Netflix, who would've thought a series would be on Formula 1, a soap opera for formula 1 in behind the scenes, driving to survive has been quite an acceleration for fan base. I mean, techies in Silicon valley and all around the world have told us like, hey, you know what? That exposes the nerdiness of Formula 1. Kind of cool. So who would have thought, I mean, there's going to be shows on this whole other level. >> I think, another point to add it is about increasing your distribution points and getting your content out to as many people as possible through as many platforms as possible. But I think in addition to that, it's really about, Rob started to touch on this personalization and customization. What can you do within those platforms to give fans the ability to sort of create their own experience? Right? So data highlights, huge, huge, huge level of importance. >> I think community is going to be a big part of this too. As you start to see the data creates more interactions and more progression, if you will. Community, I'm a Bruins fan in California. There's not a lot of Bruins fans, mostly sharks fans, but I got to get online. Where am I? Where's my tribe. I want to hang, that's not just on Twitter. >> Yeah >> So there's a whole another level coming. How do you guys see community developing in your sports? >> I think the community is the biggest factor in all of this. Right? And it's kind of bringing together. It's a global sports community, first and foremost, but then you've got these pockets. So you've got NHL, NFL, you've got formula 1 and they're all gaining popularity, but it's all through really everybody being on this same journey. Everybody's on this same journey of involving tech in the sport of revolutionizing their particular sport. And it's building this global community. I mean, In formula 1, we've got a billion fans worldwide, but that's growing, it's growing every single year, but it's only growing because we're starting now to get to that younger demographic, formerly one could never get to the demographic, you know, formula 1 fans looked like us, but now it's starting to really improve our system. >> The virtualization of this hybrid world we're living in opens up the doors for more access. >> Absolutely. Yeah. And I think that's the key point here. And again, they've touched on it. It's the personalization. It's using data and platforms and packages to personalize somebody's engagement with their particular sport. >> I got a couple of questions from the fan base, I knew you guys were coming on. I want to get to you , first, Rob, how has F1 been using Amazon and the cloud to develop the new 2022 race car? >> Well, I mean, it, I would say it's no exaggeration to say Amazon technology enabled, was the key enabler in as being able to design that 2022 car, you know, we designed it in a virtual environment called computational fluid dynamics. You know, the simulations, when we were first running design iterations, were taking something like 40 hours with when we started running it on the EC2, you know, spinning up 7,000 calls, something like that. We got that down to seven hours, manageable. We designed the whole new car. >> Awesome. On the NHL, the question here for you, is that okay, how is the young generation coming into the game? What's changed with the innovation that's impacting, how the games played and how the young guns are coming up? Is there any in technology enabling that? >> Sure. You know, so we're looking at the type of content that younger fans are gravitating to, obviously highlights and dance games, but we talked about it before the ability to see what they want to see with regard to that. So, you know, where we're trying to get to is where you could watch a game and ultimately decide whether or not you want to turn on a right rail of real-time statistics for your favorite player, for your favorite team, for a specific event, whether or not you want to turn on the ability to network with your friends across social platforms, whether or not you want to turn on the betting functionality, whether or not you want to turn on the game functionality. Right? So this is how the younger generation really wants to consume the data, like sort of, they want to see what they want to see, when and how they want to see it. So we're working on that. And then there's everything that goes beyond that. The world of NFTs and VR and AR and alternate forms of content distribution, none of that would be capable or available if not for the ability to capture process and distribute data and video in an aggregate in real time. >> You know, I really think we're onto something so new here. And if you guys are really kind of illustrating the whole point of how being in person, the old model of physical, I don't have to go into arena to watch hockey or go watch formula 1, and hopefully it's on TV. Maybe it's got coverage here and there, but now with hybrid, you can integrate the experiences from the physical in-person where the asset is. >> Absolutely. >> And to virtual and just open up completely new hybrid use cases. I mean, this is brand new. There's no standards. >> Not, exactly. And that's something that we're really starting to look at, which is the event of the future. You know? So how would you bring, how do you mismatch? How would you bring that whole data experience and that whole broadcast experience to the actual event, the live event, and how would you bring the live event to somebody's front room? It's the hybrid model, right? And this is definitely next generation of how we're using the data. We're working with AWS. We're calling it event of the future. It's really, really exciting. I mean, you can imagine going there, to a formula 1 race, you're sat in the stands. You're no longer, you know, watching a car pass every few seconds and wondering what's going on. You've now got AR, VR that you can kind of put up and lay-up across what's going on the track. >> Well, a lot of people would love to get you guys' reaction to this comment online. Cause this is big, I see a lot of naysayers out there because they're so locked into the business model of the physical location. There's a lot of investment in events like this, wants me to buy tickets and show up. So they call it a one-way door here in the industry, they don't want to go through that one way door, but I'm saying that door has already been passed. It's like you're in this hybrid world is here. If you don't get out in front of it, you're going to be toast. So the question is, how do you guys think about this when you talk about the business model of experience? Cause you have to get in there and it's not super great right now on virtual. It could be better. It has to get better. So it's a balance. How do you guys talk about that in your respective fields to educate the potential? I won't say naysayers, but yeah. >> Yeah no, no, no. So we believe it wholeheartedly. You know, when you think about the inner arena experience, there's a lot of infrastructure that needs to be in place to be able to deliver those types of experiences to fans, while they're in the building, we wholeheartedly believe that the people who are paying the most to see our games should get the best possible experience. So there should be no replay, they don't get, there should be no game that they can't access, no application that they couldn't have on their phone, but you need to have, you know, fairly advanced wireless in the arena infrastructures in place. You need to have a lot of cloud infrastructure and services there. So, you know, that's why we're leveraging Kinesis and SageMaker and AWS elemental services to get all of it condensed, operating in the cloud and distributed. So if you're a fan at a game, they're 18,000 other people, like you trying to access a mobile phone to place a bet on a real-time event that just happened, you can actually do it, but a lot needs to go into that. >> Yeah, that's really good insight because what you're pointing out is is that the physical location is the first party asset. That's the key. You build on that, invest in that and then feed it out into the next world and then figure that out. Do you agree with that. >> Absolutely. 100 percent correct. Well, 100 percent agree with everything that David just said. And we've got probably, you know, an even bigger challenge because we've got these 20 sites where we lift and shift 20, 23 races, you know, all round the world where we lift and shift every couple of weeks, and they're not arenas either. They're, you know, these are huge sites. These are you know, five, six kilometer by five, six kilometer square sites. So trying to do everything that David just said in that space, we can open it. >> Yeah, we just turn the lights off, it's over, he's got to pack it all up. >> The private 5G is going to totally help. You can run drones and have full blanket coverage over the location. That's good. That's good stuff. Final question for you guys on data, because I think this is something that we've been kind of talking about on theCUBE over the past year, we see open source software has become a huge success. Do you guys see opening up the data to your fan base and seeing e-sports races in formula 1, is just going crazy. Everyone loves it. It's not there yet but the equipment having your own car in your living room, but it's close, pretty close, it's there. Opening up the data, how do you see that potential? Because there are people who want to maybe code on top of it. How do you guys view that? >> Well, I think it, has to, I mean, Dave, again, touched on this earlier when he talked about, you know, the difference between the casual and the avid. The avid, you'll never, ever satisfy the average thirst for data, right. They want to do what I did and sit on a pit wall and manage a grand Prix team. And that's great, you know, it shouldn't just be for a privilege, you know, 10, 20 people in the world to do that. We should be able to give everybody that experience because we have the technology and the ability and the know how to be able to do that. And that's where, you know, again, partnership with AWS, where we're talking about something called the virtual pit wall. So, you know, the pit stands where it's kind of like the mission control. We want to be able to bring that to the average. And it's just getting deeper and deeper layers where you can set up your bespoke environment. You can set it up just as if you were a race engineer or a team strategist, one of those guys, and you can just get deeper and deeper. And then you start to lay over that. You start to build your own models. We bring in simulation into that whole area. And, you know, it's exactly the same as what you have in the teams. You just go deeper and deeper and deeper. >> What's it like to be on the pit wall there, managing teams. what's it. (men laughing) >> Hmm scary sometimes >> Nerve wrecking. >> Nerve-wracking, I mean, I talked about, you know, the gen Zedders who want the, you know, a two hour race to pass in five minutes, it passes in five minutes. Cause there's so much going on. You know, it's kind of like being the coach or the, you know, the football manager, you know, you're under a lot of pressure. You've got to make the right decisions. You've got to, you know, you've got to make decisions in split seconds. Everybody's an expert 10 seconds after the decision has been made. It's that type of thing, but it's great fun, you know. >> I can see virtual Formula 1 being a hot total hit because with all the data and now autonomous vehicles, you can almost have a collective kind of team approach, like swapping out AI in the cars in real time from the virtual pit. >> Yeah. And again, you know, I'm just going to name check deep racer because you know, AWS deep racer, you know, we formula 1, and AWS deep racer. We did an activation about a year back in the first lockdown, in the first COVID lockdown. So we took a couple of formula 1 drivers, Daniel Ricardo being one of them. And then we built out this deep racer platform and we're trying to look at how we can bring that more, you know, more together. So you've got this virtual, sorry, this AI car, this autonomous car, and you've got formula 1. And how do we merge those two worlds together? And again, that's just trying to immerse people more in the experience. >> Alright, final question. What's the coolest thing you got going on in each of your respective innovation fields with AWS? What would you highlight your favorite innovation or coolest thing you're doing? >> Well, I can't tell you about the coolest, right. That's for sure. Look, I just think what we're doing with AWS with regard to AIML around data and statistics analytics, based on what I said earlier, the evolution of statistics and analytics and hockey really hasn't taken hold, we're there now. The ability to really take a game that's has so much volatility, and we're the only professional teams sport that has personnel changes occurring in life play. So you never really know who's on the ice and the ability now to deliver real-time graphics and visualizations in the broadcast based on movements that had just played within milliseconds. And, we're starting to do that today with shot and save analytics with AWS. So where that can go in the future is really, what's probably the most exciting because it'll totally transform the way fans consumer our game. >> The NHS has always been on the cutting edge on the tech. Been following you guys for years, congratulations. Rob, the coolest thing you're working on, from Amazon, that's cool, and in formula 1 that's in your plate right now. >> Do you know what, I mean, there's so much going on at the minute. It's really difficult to choose any one thing. I think the whole partnership it's everything that we wanted it to be that, you know, the whole way that we're moving data forward and where we're revolutionizing this sport in a lot of ways, you know, sport has sat still for a long time. And to go through that digital transformation, you know, with Amazon and you know, in all the various areas that we're working on, I just think it's all, you know, it's all really, really cool. I mean, it's just moving forward at such a pace. Now. >> If you don't mind me asking why I got you here on the whole data thing, I'm just thinking about if I was on a team, I'd be like, okay, there's a whole new wild west. It's this arbitrage of data, we'll get over on the other team. Do you have to watch out, do you guys talk about like watching teams actually, I mean, it's actually innovative that they can get an edge, but an unfair advantage if they actually had used the data, is there like discussion around, like who can use the data, which teams? >> Of course. I mean, you know, when you get down to the franchises, each team can only use its individual data. You know, that's where we have key insight up at the league level because we've got, you know, a subset of all of the teams data. So we can kind of see everything that's going on. >> And watch out for the hackers coming in and get that data. >> Oh, well, alright, we've got pretty good security. >> Guys, thanks for coming on. I love the sports angle on this. It's really awesome. I think this is a great example of how cloud and digital lifestyle is coming together. The tech integration with the fan experience and the business models are super compelling, and I think that's illustration to just every other business. Thanks for coming on theCUBE. Appreciate it. >> Awesome. >> Thank you. >> Okay so theCUBE's coverage here at AWS re:Invent. I'm John furrier, your host in theCUBE. You're watching the leader in event tech covers theCUBE. Thanks for watching. (soul music)

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]