About three months after UiPath’s initial public offering netted the automation software company $692.4 million in April, its global channel chief tells CRN that he has big plans to grow UiPath’s channel this year through investing in global system integrators, large distributors and smaller breadth partners with more technical resources, more joint business development and other incentives.
And UiPath isn’t too worried about competition from tech giants such as Microsoft that are investing in their automation offerings, said Eddie O’Brien, senior vice president of partners at New York-based UiPath.
“Post the IPO, we obviously have some cash, so it is a good time to invest,” O’Brien said. “I’ve been very aggressive in asking for incremental investment. And (CEO) Daniel (Dines) has been super supportive.”
O’Brien is the company’s top channel executive who answers directly to Chief Revenue Officer Thomas Hansen. O’Brien’s resume includes chief channel officer at UiPath competitor Automation Anywhere, global channel chief at cloud storage company Dropbox and more than 15 years with tech giant Microsoft. He joined UiPath in June 2020.
O’Brien said that UiPath has more than 4,400 partners in its ecosystem at this point, with about 3,000 of them transacting through distribution giant Ingram Micro. But UiPath has its eyes on a much larger channel. Drawing on his Microsoft days, O’Brien wants a channel more comparable to the tech giant’s large partner ecosystem, he said.
“Let me quote Microsoft: 400,000 partners,” O’Brien said. “I ran the OEM (original equipment manufacturers) channel when I was there. I know what it’s like to have a world-class channel and the importance of it if you really want to be a global, corner-to-corner software and enterprise software company.”
Competition From Microsoft, ServiceNow, Salesforce
Not only are UiPath’s eyes on a Microsoft-sized channel, but the company’s “a robot for every person” slogan that appears on UiPath’s website might bring to mind the old Microsoft early PC-ear mantra from the 1980s attributed to co-founder Bill Gates, “a computer on every desk.”
Microsoft’s investment in automation has led Wall Street analysts to speculate about competition between the tech giant and UiPath. When asked by an analyst about competition with Microsoft on UiPath’s June earnings call, UiPath CEO Dines said UiPath’s technology deploys at scale while Microsoft’s “approach has not tested large scale deployments.” UiPath’s competitive advantage is in deployment in multi-cloud, multi-platform environments and provides a “unique end-to-end horizontal platform,” he said.
“They are like comparing apples to oranges,” Dines said, according to a transcript of the call. “Our approach is extremely difficult to replicate. It requires a huge experience curve that we have built over the last 15 years. Our platform is a combination of UI, API and computer vision AI that is again extremely difficult to replicate. It is our secret sauce.”
When asked about his thoughts on vendors such as Salesforce and ServiceNow building automation into their platforms, Dines said that customers will still demand UiPath’s products and services because UiPath customers “are really afraid of vendor locking.”
“We being independent is really paying the same level of attention to major business application platforms,” Dines said. “This is actually what our customers are requiring from us, many customers are really afraid of vendor locking and this is an additional investment that will basically completely capture within a business platform. When you actually elevate your processes above the business applications, you can achieve much better flexibility in adopting cloud in migrating from one version of the platform to the other.”
In a July report, investment bank KeyBanc called UiPath “a leading software automation platform that is still in the early days of executing against the broader” $33 billion “hyperautomation” total addressable market, with “IT market challenges regarding hiring and retaining skilled talent as leading to increased demand for automation solutions.”
UiPath’s land-and-expand model, broad channel distribution and “automation innovation” differentiate it against other automation software platforms, according to the report. Its products eliminate data silos, centralize data across different systems and increase speed to production, with RPA (robotic process automation) bots taking two-to-four weeks to build as opposed to a six-month deployment of a new application, according to KeyBanc.
“UiPath win-rates remain solid vs. incumbent automation platforms with a broadening partner base helping unearth new opportunities, key to expanding UiPath‘s market presence and capturing share,” according to the report. “While competition vs. Microsoft has become an increasing topic of investor conversation, the Company continues to see Microsoft’s automation solutions as more rudimentary, particularly for larger organizations, and likely more suited to the SMB (small- to medium-sized business) market.”
Tech Giants Invest In Automation
During Microsoft’s own earnings call in July, CEO Satya Nadella said that the company’s Power Platform product “has become the leading business process automation and productivity suite for domain experts across all functions.”
He also highlighted the automation capabilities of collaboration app Teams, calling it “the new front end.”
“It‘s where people meet, chat, call, collaborate and automate business processes all within the flow of work,” he said.
Microsoft CFO Amy Hood told listeners on the call that Power Apps and Power Automate provided “strong momentum” that drove Dynamics 365 revenue to 49 percent growth year over year, “reflecting growing demand for our modern solutions to build apps and automate workflows.”
Gartner’s Magic Quadrant for RPA report published in July called both Microsoft and UiPath leaders in the market. Mcirosoft was not considered a leader in 2020, a reflection of Microsoft growing its influence in automation.
The report highlighted strengths and weaknesses with UiPath’s products. The products had strong brand awareness, the company wants to target a broad range of users and its low-code app builder UiPath Apps should help draw in more users, according to Gartner.
But UiPath still lacks a web-based RPA development environment and faces competitors with automation capabilities “that may surpass or match UiPath’s offering, especially in terms of complex orchestration, decision automation and case management,” according to the report.
“New RPA customers often discover that UiPath’s pricing model is more complex than those of other RPA products they evaluate,” the report continues. “UiPath’s pricing and packaging strategy also changes, as evidenced by its introduction of developer personas and subsequent elimination of them within one year. That said, UiPath has launched simplified starter packs for new customers and is piloting consumption-based pricing options (such as per-minute pricing), which may reduce entry costs for customers.”
As for Microsoft’s Power Automate RPA suite, strengths included using all of Power Platform for a single, unified, end-to-end platform for automation, integration and low-code application. Microsoft has “15.8 million deployed bots driving 1.5 million actions daily. Its Azure-based RPA offering is accessible to 1 billion people. Power Automate provides rich integration with Microsoft’s ecosystem of widely used apps,” according to the report.
Microsoft offers a free version of Power Automate Desktop to Windows 10 users. Power Automate’s sales ecosystem includes more than 400 partners, according to Gartner..
On the negative side, Microsoft’s RPA offerings depend on Windows, has a complex pricing model and a “confusing” navigation among Teams, Power Automate Desktop and Power Automate service on the cloud, according to the report.
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