Introduction to Robotic Process Automation

Robotic process automation (RPA) is the world's fastest growing enterprise software segment, according to Gartner. Business leaders across all geographies and industries view RPA as a key tool in their quest for digital transformation. In addition, COVID-19 has brought additional organizational pressure to cut costs and digitize paper-based, routine human processes.

This report provides a broad overview of RPA. We define RPA, explain how it works, establish RPA's total addressable market (TAM), and share profiles of the three leading RPA vendors.

Table of Contents

• What is Robotic Process Automation?
• How Does RPA Software Work?
• What Problem Does RPA Solve?
• How Much Does Robotic Process Automation Software Cost?
• How Large is the RPA Market?
• Who Are the RPA Leaders?
  • UiPath
  • Automation Anywhere
  • Blue Prism

What is Robotic Process Automation?

Robotic process automation (RPA) is the use of software robots to automate repetitive, rules-based processes that are currently executed by humans across one or more existing applications. These processes typically involve many disparate software applications that cannot be integrated using an application programming interface (API). Examples of processes automated by RPA include employee onboarding, order processing, revenue recognition, and database maintenance. Individual tasks within these processes that are automated include opening applications, selecting an onscreen item, copying and pasting data, typing text or numbers into an application, and sending an email.

RPA is often confused with low-code and no-code software. While all of these software types can be used to automate processes, they are distinct. The primary difference is that RPA runs at the user interface (UI) level, while low-code and no-code automations typically run at the API level. This makes RPA uniquely able to automate processes across applications that do not have an API – a quality most often found in legacy software.

How Does RPA Software Work?

To keep things simple, you can think of RPA software having two steps – programming the software robots, and then deploying the software robots.

There are a handful of ways that software robots can be programmed. They can be programmed through software coding, a visual editor, or by recording a series of tasks that employees complete on their computers. Today, most robots are created through software programming. Here's an example of UiPath Studio, a canvas on which RPA robots can be created:

Once the software robots are programmed, they are deployed and managed using a control center. These control center applications are particularly critical for large enterprises that manage thousands of robots. Control centers give RPA customers the ability to provision, deploy, monitor, measure and secure the robots inside of their organizations.

As mentioned above, RPA software typically executes at the user interface (UI) level. Robots can be one of three types:

What Problem Does RPA Solve?

The primary problem that RPA addresses is the large amount of human time spent executing simple, repetitive processes. Large enterprises spend billions of dollars to pay employees to carry out routine tasks that don't add much value. This is especially true in back-office processes in industries such as healthcare, financial services, banking, insurance, utilities, and telecommunications.

Specific examples of problems that RPA has solved include:

How Much Does Robotic Process Automation Software Cost?

The average customer of robotic process automation software pays about $50,000 per year. Members of the Global 2,000 spend an average of $12 million per year on RPA, according to ETR. Pricing typically depends on a number of factors including:

How Large is the RPA Market?

The RPA market is large and growing quickly. Gartner forecasts that RPA revenue will grow at double-digit rates through 2024. In 2019, worldwide RPA software revenue was $1.4 billion, and will grow to $1.9 billion by 2021.

Based on a bottoms-up analysis using revenue data from RPA software vendors and market share data from ETR, we estimate the current total addressable market (TAM) for robotic process automation to be $3.5 billion. This TAM for robotic process automation software can grow to as much as $50 billion by 2030. An aggressive estimate from Forrester predicts that Intelligent Automation (RPA plus artificial intelligence) will release $134 Billion in labor value as early as 2022.

However, reaching a TAM of $50 billion, roughly the same size as CRM software today, will require that RPA software overcomes challenging obstacles. Specifically, this will require RPA software to expand into customers' front offices, and integrate with technologies like AI, ML & process mining to automate more complex processes. In addition, RPA must remain relevant after legacy enterprise software solutions that lack APIs are replaced by software solutions that can interface directly.

Who Are the RPA Leaders?

There are over 45 RPA software vendors in total. The top three players in the robotic process automation industry are UiPath, Automation Anywhere and Blue Prism. These three companies are all in Gartner's Magic Quadrant. They also lead the market in terms of market share and revenue growth according to ETR.

UiPath

UiPath is the largest and fastest growing player in the RPA market. In July 2020, the company raised $225 million at a valuation of $10.2 billion, and disclosed that annual recurring revenue (ARR) had grown from $100 million to $400 million in just two years. According to Everest Group, the company has over 2,000 employees and is based in New York City.

UiPath has over 6,500 customers, including 65% of the Fortune 500. Notable customers include Amazon, Bank of America, Google, Toyota, US Navy, Verizon and Walmart. As you can see below, the company has a balanced mix of customers ranging from SMBs to large enterprises. UiPath has also won more technology customers than its top competitors.

Automation Anywhere

Automation Anywhere is the second largest and fastest growing player in the RPA market. The company has raised $840 million in funding, including a $290 million investment round led by Salesforce Ventures in November, 2019. According to Everest Group, Automation Anywhere has over 2,000 employees and is based in San Jose, California.

In 2019, Automation Anywhere grew its customer base by 111% to almost 4,000 in total. Notable customers include the City of San Diego, Coca Cola, Dell, Key Bank, Salesforce and Sprint. As you can see below, the company has a balanced mix of customers ranging from SMBs to large enterprises. It has also won customers across a diversified range of industries.

Blue Prism

Blue Prism is a leading player in the RPA market. In March 2016, the company went public on the London Stock Exchange with a market capitalization of £48.5 million. Today it has a market capitalization of $1.5 billion. According to Everest Group, the company has over 900 employees and is based in London, England.

Blue Prism has over 1,700 customers. Notable customers include Jaguar Land Rover, Metlife, and Lloyds of London. As you can see below, the company has a high concentration of enterprise customers, and a focus on the banking & capital markets vertical.