In this special episode of the Futurum Tech Podcast Interview Series, Daniel Newman welcomes Automation Anywhere’s Chief Strategy Officer, Stephen DeWitt, to discuss RPA and its emerging evolution to intelligence. Automation Anywhere develops robotic process automation (RPA) software, which uses bots to complete important processes. And as CSO, Stephen’s role is to look further ahead than the here and now. This is especially important because the RPA space is going through a period of growth, as automation drastically changes how companies do things.
During the podcast, Stephen mentioned that Automation Anywhere recently received a massive round of funding, increasing valuation. And that’s important because Automation Anywhere just launched the industry’s first cloud platform for RPA, further putting RPA in the spotlight right now. As he pointed out, AI has been around for a while, so the concept isn’t new. In fact, if you’ve done macros in Excel, or worked with scripting languages, you’ve done a basic form of RPA.
But what’s made automation more in vogue now is that technology has gotten a lot easier. Making a smart home now is easier using Alexa than it would have been years ago, when it was much more confusing and less user friendly. Now you’re starting to see democratization of skills to automate, and very impressive ROI for the automation that’s being delivered. Anyone can tackle a process like task automation and have immediate feedback, as RPA gives an instant return. So while automation isn’t new, and RPA isn’t new, the evolution that’s making it more simplistic and accessible is making companies get behind it.
According to Stephen, another big trend for RPA is the intelligence side of the equation. He mentioned that we have unintended automation down now, but the frontier of intelligent automation is outrageous. Futurum Research and Automation Anywhere even worked together to research the state of intelligent process automation and RPA.
When it comes to the overall feel around augmented intelligence and IPA, companies are starting to see the value. In fact, as Dan and Stephen discussed, 67 percent of companies are justifying replacing human workers with automation to improve efficiency, and 63 percent justify it to cut operational costs. Another stat is that 2/3 of organizations surveyed feel that minimizing human replacement and maximizing augmentation is the ideal model. And 1 in 4 businesses wants to replace zero humans and are 100 percent in pursuit of augmentation.
Stephen added that some aspects of automation still seem taboo, but that narrative will mature over the years. We’re not going to regress; we’ll stay on this path of progressing, as we’ve found a better way of doing something. It saves time and money, so it improves efficiency, and that’s good news for everyone.
Of course, there’s the lingering question of what’s the frontier beyond automation? What is the ultimate workflow? Stephen said the ultimate business model is 100% efficient. Fortunately, we’re inching toward that. Automation Anywhere has partnered with Microsoft, which made an announcement that it will be in the automation space with Azure. This has validated what Automation Anywhere is doing since it clearly sees value there and will push the company to be better and innovate more. Stephen mentioned that the company has a cool set of solutions integrated in Excel, to name one example. This will be a good kind of cooperative competition, and Automation Anywhere is one of the companies at the forefront!
Daniel Newman: Welcome to the Futurum Tech Podcast. I’m Daniel Newman, Principal Analyst at Futurum Research and Founder. We are here on another Futurum Tech Podcast Interview Series and I’m excited today to bring Steven DeWitt of Automation Anywhere to talk a little bit about RPA and its emergence and evolution to intelligence.
Before we do that though, I do need to first of all say I want to thank Automation Anywhere for being a partner of this particular episode of the Futurum Tech Podcast. And as a little reminder for everyone out there, I need to let you know this show is for information and entertainment purposes only and while we will be talking about some publicly held companies as well as other companies in the technology space, we are not offering any sort of investment advice on this show. But it will be entertaining, I promise you that. And we are going to talk about something that is near and dear to a lot of tech leaders’ hearts and that is automation, augmentation of the workforce, intelligence, AI cloud and so much more. Stephen DeWitt, welcome to the podcast.
Stephen DeWitt: It’s great to be here. I really appreciate it.
Daniel Newman: So Steven, before I start diving into the questions and putting you on the hot seat, proverbially speaking, tell everybody a little bit about yourself and your role at Automation Anywhere.
Stephen DeWitt: Daniel, I’m the Chief Strategy Officer here at Automation Anywhere. By definition, my role and responsibility here is to look a little bit further ahead than the here and now. The space that we’re in, the RPA space. The intelligent automation space in general is going through a period of extraordinary growth. I had the opportunity in my career to go through similar type dynamics in the past. I was on the executive staff of Cisco systems in the mid ’90s while companies were looking to harness the power of inter-networking. It needed a company like Cisco to bring order to technical chaos that much like Microsoft brought order to the PC arena with platforms like Windows.
Later in my career, I had the opportunity to build multiple startups. All been category creators at moments when big things happened like the cloud, which fundamentally a virtualization, which fundamentally changed the way enterprises do things. We’re in that same boat now with automation. I joined the team earlier this year and am excited about the prospects.
Daniel Newman: Yeah, automation is an interesting topic because it’s not really new, kind of like AI. It’s been actually around for quite a long time and companies have been attempting it in vast and various different formats. However, it has sort of made a raging comeback into the space. Automation Anywhere just received a massive round of funding. Here’s a little promo for you. Unsolicited promo. Increasing the valuation what to over six? Was it over 6 billion based on this newest funding round?
Stephen DeWitt: We did close series. Actually it’s not technically closed. We did announce $290 million financing as part of our Series B Round. The valuation of the company is just a little under 7 billion.
Daniel Newman: So there you go. So over six under seven. Don’t want to get those billions wrong because that’s a big number. But, so you’re the guy looking into the future. So my first question will ask you to kind of look into the moment and we will start thinking out into the future as we go. But what are the kind of the current trends you are seeing overall in this RPA and IPA space?
Stephen DeWitt: Well, you said early in your comments that the space is hot right now. Well, AI has been around for a while. Process Automation. Heck, if you were doing macros in Excel a number of years ago, you were doing basically a form of RPA at the time if you’ve been in, done scripting languages, et cetera.
I think what’s made automation kind of in vogue right now is a couple of things. One, the technology has gotten a lot easier and the democratization. Think of you as a consumer using things like Alexa. If I had asked you five years ago to start making a smart home …. I remember at Hewlett Packard about 10 years ago, we would take people through our smart home and how naive we were to the impact of automation as consumers, and it’s now become … Our ability to learn the skills and teach technology to do things as consumers has gone through the roof.
So it turned that into our professional lives. We walk into the office, there’s sort of an expectation that why can’t I do the same thing and now it’s starting to happen. We just launched a number a weeks ago, the industry’s first cloud platform for RPA and really not so much the feature and functionality but the how. Literally, you can build bots. I built my first bot May 29 in about 11 minutes.
So you’re seeing the democratization of the skills to automate and you’re seeing outrageous ROI for the automation that’s being delivered. I can tackle a process, whether it’s a simple task automation or basic process or a complex process automation and have immediate feedback. It is very unusual for C-level executives, et cetera, to find in-quarter savings and optimization that impacts EPS in a near term window. RPA is like instant return, and I think that’s kind of one of the big macro trends around RPA right now. But the other big trend, and it’s one I think we’re helping to push is the intelligence side of the equation. I think we’ve got the unintended automation pretty well down now. The frontier around intelligent automation is outrageous.
Daniel Newman: Yeah. I’m going to hit you up on a few more questions on that later on in this podcast here. But I want to talk a little bit. So this year we worked together, Futurum Research and Automation Anywhere, and we did some research on the state of intelligent process automation and RPA. Kind of looking at both of them because like I said, the terms are becoming a bit more interchangeable as certain companies are choosing to overcome the transformation. I hate to use that term because it’s so cliché these days but of the industry because like you said, automation isn’t new, RPA isn’t new. But the evolution of it to what it’s becoming today, the simplicity that is being realized, it’s hitting bottom lines, it’s allowing and enabling companies to use it faster. That’s moving from attended to unintended to intelligent to augmented workforce. Companies are getting behind it.
But one thing I wanted to kind of hit on because I want to come back in a little bit here to some of the specific technologies shifting, but is the sort of feel around augmented intelligence and IPA organizations are, they’re seeing values and companies are … Our studies say 67% of companies are justifying replacing human workers with automation to improve efficiency. 63% justify replacing human workers with automation to cut operational costs.
But there’s another step that actually kind of warmed my heart a little bit. That was that two thirds of the organizations in our survey, that’s over 500 enterprises that we talked to, said they feel that minimizing human replacement and maximizing augmentation is the ideal automation deployment model.
Just to further that, nearly one in four businesses feel that the ideal automation deployment model replaces zero human workers and is 100% in pursuit of human work automation. So you being in this strategy role have to be thinking about that because there’s that one negative connotation that comes with anything automation and AI related and that’s jobs. People are concerned about their jobs. So talk a little bit about your thoughts around that.
Stephen DeWitt: I could spend a long time on this. This is what-
Daniel Newman: Be like three minutes. Give me your best three minutes.
Stephen DeWitt: Live in this. I live in this all day and I have the great privilege and honor and opportunity to work with leading companies around the globe that are dealing with this exact dynamic. When a CEO gets up in front of his company at the All Hands and talks about automation, that’s a relatively scary All Hands for most people because it’s a perception of job loss. The whole narrative around technology augmentation of the human experience, well that’s really fun to talk about and we can all point to things like consumer devices and how they’ve made our lives better. I can also point to the fact that my 16-year-old daughter never takes her eyes off the phone and having a conversation around the dinner table is almost impossible.
And that was created through this automation tool. So, look, there are some aspects of automation that are going to be kind of taboo dynamics, et cetera. That narrative is going to mature as a society over the next handful of years. But bring it back to the early point of how customers get on this journey. First off, they have to. The genie isn’t going back in the bottle. We’re not going to regress to DOS. Go back to the pre-technology world. So, we’re on a path.
I would actually argue that in history when we look back on it, the keyboard era, and I’ll just refer to it as this moment of time when humanity had to interact with technology through keyboards because it was the only envisioned instruction set because we had typewriters before this. There wasn’t a vision around the replacement of a typewriter being your sentiment or the way your eyes look or what your pulses at or things that were truly human factors. It was a better way of doing something from the past.
When you look at ultimately where automation is going, if I use RPA to automate a process that I did, and that makes a worker 20% more effective, that’s great. And I can bank that savings both in the dollar savings and in the productivity of that individual and the ability to re-skill them into things that are more aligned to my competitiveness. There’s all of that goodness. But there’s also the lingering question of, okay, I just automated something that needed to be automated. What’s the frontier beyond that automation? If I take a cash conversion cycle that used to be 20 days down to four through automation and now I don’t need 20 people, I only need eight people’s worth of comparable work. Hey, that’s all fine and dandy, but what is the ultimate workflow? What does a cash conversion cycle in its ultimate look like?
I was on the executive team of Hewlett Packard. We were running a $130 billion company. We used to build companies to get bigger, higher share of wallet. And then you realize fundamentally certain aspects of your business are non-competitive with the current operating model. How you do things. And remember every business, all businesses, whether it’s a one person shop or a 500,000 person company, are ultimately measured against the payback on the money that they spend to do what it is they do. And if you think of virtualization, why did VMware get huge? Because the value proposition was compute, networking and storage. What I spend is there’s no friction. There’s no limit of capability. When you look at the dollar that you spend in cost of goods or payroll, the things that allow you to do your business, is that 100% efficient?
The ultimate business model will be, and that’s your destination for automation. So between now and then you’ve got all of the reimagination of what you do and the reimagination of what your workforce, human, bot, autonomous, supply chain built, the Uberized model, whatever labor does your work ultimately becomes the recipe for that success.
Daniel Newman: Absolutely. And I tell you, I can sense your passion on the topic. By the way, I’ll take 5 Nines efficiency in my business. So just 5 Nines. I mean, that’s all I’m asking for. Make a bot, make it happen, Stephen.
Stephen DeWitt: Well, you brought up at the beginning, look at industries like manufacturing. Why is manufacturing so high on the RPA curve out of the shoe? Yes, it’s a human productivity but it’s also about less errors, less mistakes, less … Six Sigma, which is something we all grew up with, now can be in its modern incarnate, automated into the way you do things.
Daniel Newman: Yeah. And that’s a big thing and we will continue to see automation take center stage. I want to keep the show on track here and I want to take the last seven or so minutes that we have here to talk a little bit about what Automation Anywhere is doing and the technologies that are the focus. So you’re moving sort of on from traditional RPA. It doesn’t mean you’re not still going to support what you’ve been selling and doing, but the focus of the announcements over the past several months that have gone with this increased valuation have been around AI cloud and new consumption models.
So I’m going to take a couple of questions I had and I’m going to tie them into one question. I’m going to give you the floor and I’d like you to talk to those three areas. But AI is going to have a big impact on RPA. The cloud is going to play a pretty significant role. And then the way people procure and consume RPA is going to change. That’s at least something that Automation Anywhere is betting on big. So talk a little bit about that technology stack and the evolution as Automation Anywhere sees it so that people can better understand what the future of RPA and API may look like for their enterprise.
Stephen DeWitt: Yeah, I’m actually going to go from the consumption model backup the staff.
Daniel Newman: That’s fine. You can pick the order. You get the floor.
Stephen DeWitt: Well, no, I think you’ve hit something that’s really important and speaks to the current state of the union. RPA has been around for a number of years. I think the pricing and licensing models are maturing very rapidly. I think the reason why consumption models were put in place was because of the unknown in terms of consumption. How quickly can you generate meaningful bots? How quickly can they scale across an enterprise? What’s the relative value of that? How do you assign value?
Most enterprise software goes through a couple year period where it’s value kind of gets its steady state. We’re not there yet because in the RPA world, it’s kind of like, if I go back to what I said about Windows and what it brought to the PC era in its day, RPA is now bringing that to the process world. People are not deploying. People are savvy to the fact that this is a journey. This isn’t a one-stop, hey, I have a big bang investment in a big bang license agreement, and I’m done. It’s evolutionary. What you’re going to spend on Day 1. What you’re going to spend on Day 1,050 is going to be more.
So, consumption models are going to continue to evolve. They’re also going to follow much more closely, and this is indicative of the announcement we just made with Salesforce. They’re going to follow much more closely to the automation around the systems of record or the systems of engagement that an enterprise has. I have deployed Salesforce; I’ve deployed Workday; I’ve deployed Service Now. I’ve deployed SAP HANA. Whatever your core platforms are, what you’re seeing now is the maturation of intelligent automation around those ecosystems. We now with Salesforce together with MuleSoft, allow a Salesforce customer, remember that service cloud, MuleSoft and our RPA platform.
Now, inside of a Salesforce environment, you can create hardwired API-based automation for certain sets of applications. You can combine API and RPA level automation. You can leverage low code platforms. You have all of the building blocks of an OS, if you will, around automation that allow for the development of solutions that have very tight ROI stories to them. And that’s going to be a big part of the maturation. In 2020, 2021, you’re going to see the recipe books for automation around these ecosystems. I think, look, that’s going to be a big business opportunity for all of the companies that are in there. It should be a much cleaner consumption roadmap for a large enterprise. Look, we can’t do this alone. We’re doing it through our own efforts, our platform, and the efforts of our partners like Accenture and Deloitte and those kinds of folks.
Daniel Newman: Yeah. The company no doubt has addressed a number of areas in growth concerns. In my opinion as an analyst, I really wanted to see Automation Anywhere take that leap. Clearly, the company’s partnered with Microsoft and has done a lot and has made some announcements around Ignite. Yet Microsoft has also made a fairly strong market position by saying they’re going to be in the automation space with Azure and with Flow. Now they changed to Automate, right? The company is very focused on being a resource to its partners, but also having solutions within its own ranks that people can deliver. That’s going to press on companies who have been a partner a long time with Microsoft to innovate themselves to make sure they stay relevant.
So a lot of your innovations, I felt, I thought that announcement really did two things, Stephen. It validated what Automation Anywhere was doing because Microsoft has been so successful. They’re not really getting into business areas that aren’t, they don’t see value in, that the company doesn’t see value in right now. So I thought that was strong validation. But I think it’s going to push the company as Automation Anywhere to have to innovate and do better and be faster and more nimble to make sure that people bring you along on their Microsoft journeys as they have in the past.
Stephen DeWitt: Oh, no doubt. If we’re not a PhD, MBA, Cum Laude, the ultimate expertise in the world of intelligent automation, we’re missing our role. And so we’re excited about what Microsoft’s doing. We don’t fear the competition. It’s significantly higher validation than anything. We’ve got a very cool set of solutions with them integrated in platforms like Excel right now. We have a big roadmap with them around dynamics. So it’s a good kind of coopetition without something we fear. We know our role.
Daniel Newman: Yeah, absolutely. Well, Stephen, this is some great insights. This is just a teaser as the total story of what’s going on with the state of automation, the state of intelligent process, augmented intelligence and Automation Anywhere is definitely one of the companies at the forefront. The valuation that it’s been given through the continued investments in capital raised. The attention in the market, the new products launched. A lot to be said there and we really appreciate here at Futurum the partnership and doing the research together. Then of course having you join me here on this podcast to talk to our community. So thanks for coming on, Stephen.
Stephen DeWitt: My pleasure, Daniel. I enjoyed it.
Daniel Newman: For everyone out there that was listening in, I’ll go ahead and put in the show notes a link. The report is free. We did a very significant study on the state of intelligent process automation and robotic process automation in partnership with Automation Anywhere. I assure you a ton of media insights in there. So please click on it, download it, read it, check it out. Stay with this if automation, AI cloud, if these are topics of interest to you, and I’m pretty sure if you’re listening to this show they are. You’re going to want to check out this report.
For the Futurum Tech Podcast, I’m Daniel Newman. Appreciate you tuning in. Click that subscribe button. Stick with us. Join us each week for our regular additions of the Futurum Tech Podcast. Hear all the latest news on the high tech industry. For now I’m out of here. But we look forward to seeing you again very soon.
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Disclaimer: The Futurum Tech Podcast is for information and entertainment purposes only. Over the course of this podcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.
Thank you to Automation Anywhere for sponsoring this edition of Futurum Tech Podcast.